Despite the government’s slogan of “fairness for every generation,” future generations will pay for today’s debt through tax increases, essentially shifting the burden of current budget deficits onto our children.
Article content
The cost of living remains the top issue for Canadians.
Advertisement 2
Article content
This is no surprise considering the rapid increase in food, shelter and gas costs, which pushed inflation to heights unseen since the 1980s. But while the Trudeau government has promised to address Canada’s “affordability” woes by spending billions on housing and child care, it’s ignored the single largest expense for Canadian families — taxes.
According to a new study published by the Fraser Institute, in 2023 the average Canadian family (with a household income of $109,235) paid $46,988 in total taxes (or 43% of its household income) to its federal, provincial and local governments. For context, that same family spent $38,930 (or 35.6% of its income) on food, shelter and clothing. In other words, in 2023, Canadian families paid significantly more of their incomes on taxes (income taxes, sales taxes, property taxes, carbon taxes, etc.) than they spent on basic necessities.
Calgary Sun Headline News
Article content
Advertisement 3
Article content
And yet, while tax reductions could provide some relief for families struggling with increased living costs, don’t expect any tax cuts from Ottawa anytime soon.
Why?
Because the Trudeau government has increased spending significantly in recent years. According to projections, from fiscal year 2019-20 to 2024-25, annual program spending will increase by more than $115 billion. While COVID prompted unprecedented expenses for the 2020-21 fiscal year, instead of returning spending to pre-pandemic levels, the government opted to increase spending over the last few years.
Consequently, the federal government will add a projected $550 billion in nominal net debt (total debt minus financial assets) over the same five-year period, hampering its ability to cut taxes without racking up more debt and debt interest costs. Despite the government’s slogan of “fairness for every generation,” future generations will pay for today’s debt through tax increases, essentially shifting the burden of current budget deficits onto our children.
Advertisement 4
Article content
Clearly, the federal government — and many provinces — have shunned fiscal responsibility, and Canadian families are paying the price. While inflation squeezes our ability to pay for basic needs, the government has continued to borrow and increase taxes to fund its record-high spending. In a recent tweet about the cost of living, Prime Minister Trudeau said “until Canadians can feel that relief in their wallets,” his government’s “job’s not done.” If the prime minister wants to make life more affordable for Canadian families, he should reduce their single largest expense — taxes.
Jake Fuss and Callum MacLeod are analysts at the Fraser Institute.
Article content
