The Fraser Institute just announced that June 10 is Happy Tax Freedom Day 2018 (although the date varies depending on where you live in Canada). According to the Fraser Institute calculations, from that day onward, employees are finally working for themselves and their family. Moreover, if you had to pay all your taxes up front to different levels of government, you are now in the clear to keep the rest of your earnings until a new year begins.
The average Canadian family works almost half a year to pay taxes in 2018.
Since governments impose a litany of taxes—some of which are visible but many are hidden—it’s very difficult for the average Canadian to get a clear sense of all the taxes they pay. That’s why, every year, the Fraser Institute calculates Tax Freedom Day, a handy measure of the total tax burden imposed on Canadian families by the federal, provincial and local governments. (Fraser Institute)
Below is a summary of the Fraser Institutes findings:
- In 2018, the average Canadian family will earn $115,724 in income and pay a total of $50,464 in taxes (43.6%). If the average Canadian family had to pay its total tax bill of $50,464 up front, it would have worked until June 9 to pay the total tax bill imposed on them by all three levels of government (federal, provincial, and local).
- This means that in 2018, the average Canadian family will celebrate Tax Freedom Day on June 10. Tax Freedom Day in 2018 arrives around the same day as in 2017, when it fell on June 9, because the average Canadian family’s total tax bill is expected to increase at a faster rate this year (3.1%) than the growth in income (3.3%).
- The Balanced Budget Tax Freedom Day for Canada arrives on June 17. Put differently, if governments had to increase taxes to balance their budgets instead of financing expenditures with deficits, Tax Freedom Day would arrive 7 days later.
Tax Freedom Day 2018 by Jurisdictions
Tax Freedom Day for Canada and each province varies according to the extent of the provincially levied tax burden. The earliest provincial Tax Freedom Day falls on May 22 in Alberta, while the latest falls on June 26 in Newfoundland & Labrador.
In some jurisdictions, Tax Freedom Day occurs in 2018:
In Alberta on May 22
In Saskatchewan on June 1
In Prince Edward Island on June 2
In Manitoba on June 3
In British Columbia on June 5
In Ontario on June 9
In Canada on June 10
In New Brunswick on June 10
In Nova Scotia on June 15
In Quebec on June 21
In Newfoundland and Labrador on June 26
The full Fraser Institute Tax Freedom Day report can be accessed here.