Canadians spent more on taxes than basic necessities in 2025: Study

'Taxes remain the largest household expense for Canadian families,' Fraser Institute says

Published Aug 13, 2026  •  Last updated 24 minutes ago  •  2 minute read

The average Canadian family last year spent more on paying taxes than for the basic necessities of shelter, food and clothing combined, according to a new study by the Fraser Institute. Photo by ADOBE STOCK

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The average Canadian family last year spent more on paying taxes than for the basic necessities of shelter, food and clothing combined, according to a new study by the Fraser Institute.

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A family with an average income of $112,111, the report by the fiscally conservative think tank says, spent $50,721 or 41.9% of its income on taxes in 2025 compared to $43,657, or 36%, for shelter ($27,686), food ($13,249) and clothing ($2,722).

“At a time when the cost of living is top of mind across the country, taxes remain the largest household expense for Canadian families,” said Jake Fuss, director of fiscal studies for the Fraser Institute and co-author of the report, Taxes Versus the Necessities of Life: The Canadian Consumer Tax Index, 2026.

“While Canadians can decide for themselves whether or not they get good value for their tax dollars, they should understand how much they pay in taxes each year and how much the tax burden has grown relative to other necessary costs they must pay.”

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The total tax bill facing Canadians from the federal, provincial and municipal governments — including income taxes, sales taxes, health taxes, payroll taxes, property taxes, fuel taxes, carbon taxes, vehicle taxes, alcohol, tobacco and import duties and other taxes — has grown far more rapidly than any other expenditure for the average family.

For example in 1961, the first year of available data for the study, the average Canadian family spent most of its income — 56.5% — on shelter, food and clothing, and only 33.5% on taxes — a complete reversal from today.

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Total tax bill has increased by 2,928% since 1961

Since 1961, the total tax bill faced by average Canadian families has increased by 2,928%, compared to a 2,322% rise in income, 2,349% for shelter, 952% for food, 526% for clothing and a 946% increase in the consumer price index.

If today’s combined federal and provincial deficits are factored in because government debt has to be paid back by taxpayers eventually, then the tax bill faced by the average Canadian family has increased by 3,243% since 1961, the study says.

It is true that federal, provincial and municipal governments provide far more services to the public today than in the past.

For example, one of the most expensive — medicare — didn’t exist in 1961 and did not become a national program adopted by all provinces and territories until 1971.

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