The average Canadian family can now celebrate Tax Freedom Day.
If Canadians were made to pay all their yearly taxes before paying themselves, Thursday, Jun. 13, would mark the first day that the average family can keep the fruits of their labour.
According to a Fraser Institute report, the average Canadian family earns $147,570 this year and pays 44% of that, an estimated $65,766, in taxes.
If the average Canadian family had to pay all the taxes imposed on them by their federal, provincial, and municipal governments up front, it would take 164 days, ending on June 12.That would be over five months’ worth of income when represented on a calendar.
“Tax Freedom Day helps put the total tax burden in perspective and helps Canadians understand just how much of their money they pay in taxes every year,” Jake Fuss the director of Fiscal Studies at the Fraser Institute said in a news release.
“Canadians need to decide for themselves whether they are getting their money’s worth when it comes to how governments are spending their tax dollars.”
Tax Freedom Day is a day later than in 2023, and four days later than in 2019, before the COVID-19 Pandemic. If 2024 wasn’t a leap year, the day would have landed two days later than it did in 2023.
“This change is due to the expectation that the incomes of Canadians will increase slower than the total tax revenue forecasted by Canadian governments,” the report said.
The study found that the forecasts for Canadians’ personal income growth were lower than the government’s forecasts for payroll and health tax revenue.
Tax Freedom Day is determined by comparing personal growth in the private sector with the revenue forecasts from the provincial and federal governments’ budgets for that year.
The date varies according to the provincial tax burden in each province.Manitoba had the earliest Tax Freedom Day this year, on May 26, while Newfoundland and Labrador had the latest, on June 30. When the final income numbers are updated by Statistics Canada, the Fraser Institute updates its findings to include the actual data.
The latest Tax Freedom Day was June 27, 2000, two months later than it was when the calculation first began in 1961.
“Canadians should be worried about the nearly $70 billion in deficits the federal and provincial governments are forecasting this year because they will have substantial tax implications in future years,” the report said.
The authors calculated a “Balanced Budget Tax Freedom Day,” to determine what day Canadians would start working for themselves if the government forced them to pay for the current deficits.
For this year, Balanced Budget Tax Freedom Day will be June 23, 2024, a week’s worth of work for the average Canadian family.