June 10 is tax freedom day 2015

June 12, 2015 Yosie Saint-Cyr, LL.B. Managing Editor Payroll, Source Deductions and Reporting, Wages and Compensation

Image: http://opinion.financialpost.com

According to the Fraser Institute’s annual calculations Tax Freedom Day for the average Canadian family falls on June 10 this year, one day later than in 2014. This day is when Canadians start working for themselves and not government.

What is tax freedom day?

According to Paul Nightingale, Deputy Director of the Science Policy Research Unit (SPRU) at the University of Sussex, the concept was developed in the United States in 1948 by Dallas Hostetler who showed his entrepreneurial skill by trademarking the phrase. His yearly calculations were transferred to the Tax Foundation in 1971, and since then they have calculated it each year, gradually expanding its application to individual US States and now other nations.

In relation to Canada, Tax Freedom Day measures the total tax burden imposed on Canadian families by the federal, provincial and local governments, including income taxes, payroll taxes, health taxes, sales taxes, property taxes, fuel taxes, vehicle taxes, profit taxes, import taxes, ‘sin’ taxes on liquor and tobacco, and more. If you had to pay all your taxes up front, you’d give government each and every dollar you earned before Tax Freedom Day. “The later the Tax Freedom Day, the heavier the tax burden.”

What does the 2015 tax freedom day data mean to the average Canadian?

Here are some findings and conclusions from the Fraser Institute’s annual calculations:

Tax Freedom Day in 2015 arrives one day later than in 2014, 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 (2.1%). Governments across the country are partly to blame since many have raised taxes this year.
In 2015, seven provincial governments expect to run budget deficits. Had Canadian governments increased taxes even more to balance their budgets, the average Canadian family would have worked until June 13 to pay the tax bill. In other words, the Balanced Budget Tax Freedom Day arrives on June 14, four days later than Tax Freedom Day.
In 2015, the average Canadian family will earn $102,874 in income and pay a total of $44,980 in taxes (43.7%).
Tax Freedom Day for each province varies according to the extent of the provincially levied tax burden. The earliest provincial Tax Freedom Day falls on May 19 in Alberta, while the latest falls on June 21 in Newfoundland & Labrador. Compared to last year, Tax Freedom Day comes later in 2015 for all provinces. This means that nearly all Canadians will work more for the government and less for themselves and their families this year.

Provincial 2015 Tax Freedom Days (earliest to latest)

AB: May 19
BC: June 06
SK: June 06
PE: June 08
ON: June 10
MB: June 11
NS: June 13
NB: June 14
QC: June 16
NL: June 21

Canadians can calculate their personal Tax Freedom Day using the Fraser Institute’s Personal Tax Freedom Day Calculator at www.fraserinstitute.org.

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Yosie Saint-Cyr, LL.B. Managing Editor

Managing Editor at First Reference Inc.

Yosie Saint-Cyr, LL.B., is a trained lawyer called to the Quebec bar in 1988 and is still a member in good standing. She practiced business, employment and labour law until 1999. For over 18 years, Yosie has been the Managing Editor of the following publications, Human Resources Advisor, Human Resources PolicyPro, HRinfodesk and Accessibility Standards PolicyPro from First Reference. Yosie is one of Canada’s best known and most respected HR authors, with an extensive background in employment and labour across the country. Read more