Some Canadians will celebrate Tax Freedom Day this weekend, but those in higher-tax provinces will have to wait a little longer to mark the occasion.
The average Canadian can celebrate Tax Freedom Day on June 8 this year, according to a report from the Fraser Institute released Thursday.
The Fraser Institute, a Vancouver-based economic think tank, defines Tax Freedom Day as the point in the year when the average Canadian family has earned enough income to cover its total tax bill after combining federal, provincial, and municipal taxes.
In 2025, the average Canadian family is expected to earn $158,533 and pay $68,266 in total taxes, or about 43.1 per cent of its income, the report says.
“If the average family had to pay all its taxes up front, it would work until June 8 just to meet its tax obligations,” said Milagros Palacios, one of the study’s authors.
Tax Freedom Day falls one day earlier than it did in 2024, when it was marked on June 9.
The Fraser Institute attributes this shift to government tax revenues growing more slowly than Canadians’ incomes.
The date varies significantly across provinces, depending on the local tax burden.
The earliest Tax Freedom Day this year is May 17 in Manitoba, while Quebec faces the latest date on June 21.
The report also draws attention to the impact of chronic government deficits.
Combined federal and provincial deficits are expected to reach $89.4 billion in 2025.
If governments were required to balance their budgets without borrowing money, Tax Freedom Day would be pushed even later to June 21.
The institute argues that Tax Freedom Day provides Canadians with a clear illustration of the overall tax burden, including income taxes, sales taxes, property taxes, payroll taxes, health taxes, fuel taxes, and others.
The earliest recorded Tax Freedom Day was on May 3, 1961, with the latest being June 27 in the year 2000.
The report was co-authored by Milagros Palacios, Jake Fuss and Nathaniel Li.