The average Canadian family is now handing over nearly 42% of its income in taxes, more than it spends on food, housing and clothing combined, according to a new Fraser Institute study.
The think tank’s 2026 edition of its Canadian Consumer Tax Index, released Thursday, estimates the average Canadian family earned $121,111 in 2025 and paid $50,721 in total taxes, equivalent to 41.9% of its income.
By comparison, food, shelter and clothing combined consumed 36% of the average family’s income.
The study includes more than just income taxes in its calculation. It measures the total tax burden imposed on Canadian families, including income, payroll, sales, property, fuel, carbon, alcohol and other taxes paid directly or indirectly.
The Fraser Institute says the tax burden has grown substantially faster than the cost of basic necessities over the past six decades.
Since 1961, the average family’s total tax bill has increased 2,928%, compared with a 2,349% increase in shelter costs, a 952% increase in food costs and a 526% increase in clothing costs.
Taxes have also increased more than three times as quickly as the Consumer Price Index, which rose 946% over the same period.
The contrast with 1961 is particularly stark.
That year, the average Canadian family earned $5,000 and paid $1,675, or 33.5% of its income, in taxes. Basic necessities consumed 56.5% of family income.
Today, those proportions have effectively reversed, with taxes consuming a substantially larger share of family budgets while necessities take a smaller share.
The report comes as Canadian households continue to struggle with affordability, housing costs and debt.
The Fraser Institute’s findings also follow new federal insolvency figures showing 150,505 Canadians and businesses filed for insolvency during the 12 months ending in June 2026, putting filings near levels last experienced around the aftermath of the global financial crisis.
The study was authored by Fraser Institute analysts Grady Munro and Jake Fuss.
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