By Jake Fuss

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Opinion: More than 70 per cent of Canadians feel the average family is over-taxed Back to video

Canadian families pay a lot of taxes to their federal, provincial and local governments — income taxes, sales taxes, fuel taxes and many others. A 2022 study published by the Fraser Institute found that in total the average Canadian family paid 45 per cent of its income in taxes.

But how do Canadians feel about this tax burden? According to a new poll, 74 per cent feel the average family is over-taxed. Commissioned by the Fraser Institute and conducted by Leger, the poll surveyed 1,554 respondents spanning all age groups and income levels across Canada. (It was administered January 20-22 and is considered accurate 19 times out of 20).

And yet lower taxes seem not to rank high on the agenda of most governments across the country as we enter budget season.

In 2015, the Trudeau government did reduce the second-lowest income tax rate from 22 per cent to 20.5 per cent. But the vast majority of families targeted for this tax relief now pay higher federal income taxes than before because the government has also eliminated a series of tax credits — for income splitting for couples with children, for children’s fitness and art, for public transit, for education and for textbooks. For most families, the value of the eliminated tax credits exceeds the gains from the tax rate reduction, resulting in a net increase in their personal income taxes.

But regardless of their personal situation most Canadians want tax reform. The same Leger poll found that fully 80 per cent of Canadians believe the average family should pay 40 per cent or less of its income in total taxes. And the majority of respondents (52 per cent) believe the average family should pay 25 per cent or less of its income in total taxes. That’s fully 20 percentage points less than the 45 per cent the average Canadian family currently pays.

There’s clearly a huge gap between what the average family does pay in total taxes and what Canadians believe the average family should pay.

The other important question, of course, is whether we get value for all the taxes we pay. After all, it’s one thing to pay high taxes and get high value from the services provided but quite another to pay high taxes for poor services. According to the poll, nearly half (44 per cent) of Canadians feel they receive poor or very poor value for the services they receive from government, such as health care, education, policing, roads and national defence. In contrast, only 16 per cent of Canadians believe they receive good or great value from government services, while fewer than three in 10 (just 28 per cent) believe they receive satisfactory value. Respondents in Atlantic Canada, Alberta and British Columbia were most likely to say they received poor value for their tax dollars. Respondents in Ontario reported the highest rate of satisfaction with the value they receive for their tax dollars.

Canadians are not thrilled with the quality of services provided by governments, and there’s clearly a desire for tax reductions. Governments across the country should pay close attention as they prepare to release their 2023 budgets.

Jake Fuss is associate director of fiscal studies at the Fraser Institute.