Happy tax freedom day
On June 9 you stopped working for the government.
VANCOUVER — Break out the bubbly. June 9 is tax freedom day for the average Canadian, according to the Fraser Institute’s annual calculations.
Tax Freedom Day measures the total tax burden imposed on Canadian families by the federal, provincial and local governments based on paying everything up front. The later the Tax Freedom Day, the heavier the burden.
After accounting for all taxes, the average Canadian family (with two or more people) in 2014 will pay $43,435, or 43.5% of their annual income.
Why does Tax Freedom Day come one day later this year?
Because the average Canadian family’s total tax bill will increase at a faster rate than income. Specifically, total taxes will increase by 3.2% (or $1,355) over last year while income will increase by 2.1% (or $2,072).
“The delay in Tax Freedom Day this year continues a trend of delays since 2009 when it fell on June 3. And governments across the country are partly to blame since many have raised taxes after the recent recession to make up for big spending increases and deficits,” said Charles Lammam, resident scholar in economic policy at the Fraser Institute and co-author of Canadians Celebrate Tax Freedom Day on June 9, 2014.
The $1,355 increase in the average Canadian family’s total tax bill includes increases in income taxes ($589), payroll and health taxes ($364), sales taxes ($191) and property taxes ($47). No category of taxes decreased between 2013 and 2014.
Lammam notes the tax burden doesn’t stop there. When governments borrow, they incur deficits, which are essentially deferred taxes. This year, the federal government and seven provincial governments are planning deficits totalling $18.8 billion, with Ottawa expecting a $2.9 billion deficit while the provinces expect combined deficits of $15.9 billion.
“According to our calculations, Tax Freedom Day would come five days later this year, on June 14, if Canadian governments covered their current spending with even greater tax increases instead of borrowing the shortfall,” Lammam said.
Not all the provinces are free on the same day. Alberta is May 23, PEI June 5, BC June 6, Saskatchewan June 7,Ontraio June 7, New Brunswick June 9, Manitoba June 10, Nova Scotia June 14, Quebec June 14 and Newfoundland June 22 (a day sooner than last year).
Calculate your personal Tax Freedom Day using the Fraser Institute’s online calculator.