Canadian families spent a larger share of their income on taxes than on housing, food and clothing combined in 2025.
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The Fraser Institute’s Canadian Consumer Tax Index 2026 Edition estimates that the average Canadian family earned $121,111 last year and paid $50,721 in total taxes. That works out to 41.9 per cent of family income.
By comparison, the study says housing, food and clothing together accounted for 36 per cent.
Credit: Fraser Institute
The tax calculation goes beyond income tax. It includes taxes paid to federal, provincial and local governments, including payroll, sales, property, fuel, carbon and vehicle taxes, along with import, alcohol and tobacco taxes.
“Taxes remain the largest household expense for Canadian families,” said Jake Fuss, director of fiscal studies at the Fraser Institute and a co-author of the report.
Credit: Fraser Institute
The institute says the balance looked very different in 1961. At the time, the average family earned $5,000 and paid $1,675 in taxes, or 33.5 per cent of income. Basic necessities accounted for 56.5 per cent.
Over the period from 1961 to 2025, the study calculates that the average family’s total tax bill increased by 2,928 per cent in nominal terms.
That increase was larger than the rise in shelter costs, which climbed 2,349 per cent. Food expenses increased 952 per cent, while clothing costs rose 526 per cent.
The report also compares the tax increase with the Consumer Price Index, which rose 946 per cent over the same period.
Credit: Fraser Institute
Fuss said the study is intended to give Canadians a clearer picture of how taxes fit into household finances.
“Canadians can decide for themselves whether or not they get good value for their tax dollars,” he said, adding that families should understand how their tax burden has changed relative to other necessary expenses.
More Information – Taxes versus the Necessities of Life: The Canadian Consumer Tax Index, 2026 Edition