Rights & Money

Canadians Are Paying Less Tax These Days

You probably didn’t notice, but your tax burden has gone down a bit


By Jennifer Hughes


The old cliché is that we Canadians pay a lot of taxes in return for a lot of services. In fact, while we do get a lot for our money, Canada’s total tax revenue is moderate compared to that of other countries. According to a 2017 analysis by the Organization for Economic Cooperation and Development (OECD) of the tax burden of its 35 member countries, Canada’s tax revenue as a percentage of GDP is only slightly higher than average ($14,693 US per capita versus an average of $12,911 US) and 24 of 35 countries paid more in taxes. Canadians have even paid less than US citizens—in both 2000 and 2014.

And now a September 2019 report from Statistics Canada shows that Canadians paid less in taxes in 2017 than they did the year before: an average of 11.4% of their earnings went to income taxes, the Canadian or Québec Pension Plan, and Employment Insurance in 2017, down from 11.8% in 2016 and the second-lowest rate in 26 years.

Drops in provincial income taxes and federal EI contributions are some of the main reasons for the tax decrease. Meanwhile, Quebec cut its lowest income tax bracket and increased its basic personal exception, which might helps to explain why its tax rate dropped from 5.5% in 2016 to 4% in 2017. Quebec saw the largest decline.

The Statistics Canada report also revealed that while Canadians’ average income rose by 2.5%, the top 1% of earners saw an 8.5% increase. The report also discovered that while more and more women are joining the top 1%, there is still a large discrepancy in income.





Photo: iStock/payphoto.