Canadian families are spending a larger share of their income on taxes than on some of the most basic household necessities, according to a new Fraser Institute study examining the tax burden over more than six decades.
The 2026 edition of the Canadian Consumer Tax Index estimates that the average Canadian family earned $121,111 in 2025 and paid $50,721 in total taxes. That represents 41.9 per cent of household income.
By comparison, the study estimates that housing, food and clothing together accounted for 36 per cent of the average family’s income.
The Fraser Institute’s calculation includes considerably more than personal income tax. Its measure incorporates federal, provincial and municipal taxes, including payroll, sales, property, fuel, vehicle, import and other taxes.
The report says the shift is particularly striking when compared with 1961.
At that time, the average Canadian family earned $5,000 and paid $1,675 in taxes, equivalent to 33.5 per cent of income. Basic necessities, meanwhile, consumed 56.5 per cent of family income.
Since then, the institute calculates that the average family’s total tax bill has increased by 2,928 per cent. Shelter costs increased 2,349 per cent over the same period, while food costs rose 952 per cent and clothing costs increased 526 per cent. The Consumer Price Index increased 946 per cent.
The findings come as affordability remains a major concern for Canadian households. Statistics Canada reported that the median after-tax income for Canadian families reached $108,900 in 2024, while 24 per cent of Canadians lived in households that experienced some form of food insecurity that year.
Questions About Ottawa’s Investment Plans
The tax findings also come amid debate over the federal government’s plans to invest billions of dollars in the economy through the new Canada Strong Fund.
Prime Minister Mark Carney announced the fund in April as Canada’s first national sovereign wealth fund. Ottawa plans to provide an initial $25 billion and have the fund invest alongside private-sector investors in areas including energy, critical minerals, agriculture, infrastructure and other strategic industries.
The government says the fund will operate at arm’s length from Ottawa and be managed by a professional board and chief executive. It also intends to create a retail investment product allowing Canadians to invest directly in the fund.
Critics, however, have raised concerns about the fund’s structure and the use of borrowed money.
A report from the Montreal Economic Institute argues that the Canada Strong Fund bears similarities to the United Kingdom’s National Wealth Fund, an initiative with which Carney was involved before becoming Canada’s prime minister.
According to the report, the British fund has recorded a cumulative return of minus 24.9 per cent over its first two years of operation and reported losses of £152.2 million in the most recent year cited. The report also says it has fallen short of its target for attracting private investment.
The analysis argues that government-backed investment funds can face risks when political priorities influence investment decisions rather than conventional profit-and-loss considerations.
The federal government maintains that the Canada Strong Fund is designed to operate on a commercial basis and generate market-rate returns for Canadians.
For Canadian households, the combination of rising tax obligations, housing costs and other living expenses leaves a broader question about how much of each additional dollar earned is available for everyday spending.
The Fraser Institute study’s central finding is that the balance between taxation and basic household necessities has changed dramatically since the 1960s, with taxes now representing the largest of the two categories for the average Canadian family.
