Tax Freedom Day — the day Canadians stop working to pay their taxes and start earning money for themselves — arrives on Tuesday, June 9 this year, according to an annual survey by the Fraser Institute.
“If Canadians paid all their taxes up front, they would work the first 159 days of the year before bringing any money home for themselves and their families,” said Jake Fuss, the Fraser Institute’s director of fiscal studies, noting it arrives one day later this year than in 2025.
The calculation includes taxes imposed by federal, provincial and municipal governments, including income taxes, property taxes, sales taxes, sin taxes, fuel taxes, carbon taxes, import duties and other taxes, levies and fees often hidden from the public or difficult to calculate.
The Fraser Institute says federal taxes account for 56.9% of the total tax bill, provincial taxes 37% and municipal taxes 6.2%.
It says an average Canadian family comprised of two or more people with an annual income of $166,790 will pay $72,539 in total taxes this year, or 43.5% of its income.
In this example, $25,352 of the total tax burden is the result of income taxes; $17,069 payroll and health taxes; $10,519 sales taxes; $4,939 property taxes; $7,819 profit taxes; $2,182 sin taxes; $1,137 fuel, vehicle and carbon taxes and $3,522 in other taxes.
Families and unattached individuals with an annual income of $123,757 will pay $52,220 in total taxes, or 42.2% of their income.
A family of four (two parents and two children) with an annual income of $202,885 will pay $85,315 in total taxes, or 42.1% of their income.
The Fraser Institute provides a Tax Freedom Day calculator at fraserinstitute.org/tax-freedom-day-calculator through which families and individuals can determine their own approximate total tax bill by answering a few simple questions.
Precise Tax Freedom Days depend on where people live in Canada because of provincially-imposed taxes.
This year the earliest Tax Freedom Day fell on May 20 in Saskatchewan, while the latest will be in Quebec on June 27.
For the other provinces, Tax Freedom Day arrived on May 25 in Alberta; May 28 in Manitoba; June 4 in B.C.; June 5 in P.E.I.; June 6 in New Brunswick; June 8 in Ontario and will arrive on June 9 in Nova Scotia; and June 19 in Newfoundland and Labrador.
If the combined deficits of the federal and provincial governments this year — over $113 billion — are included in the calculations, because deficits eventually have to be paid by taxpayers, what the Fraser Institute calls Balanced Budget Tax Freedom Day would arrive on June 25 nationally and in the provinces on June 1 in Saskatchewan; June 8 in Manitoba; June 13 in Alberta; June 22 in Ontario; June 26 in Nova Scotia; June 27 in New Brunswick and B.C.; June 30 in P.E.I.; July 7 in Newfoundland and Labrador and July 8 in Quebec.
Taxes pay for public services including health care, public education, social and economic programs, defence, policing, the justice system, firefighting, public infrastructure, waste collection and fund entitlement programs such as employment insurance, Canada Pension Plan and Old Age Security.
“Tax Freedom Day is not intended to measure the benefits Canadians receive from government in return for their taxes,” the report says, adding whether Canadians believe they are getting value for money, “are questions only each of us can answer for ourselves.”
Fuss said the value of the Fraser Institute’s annual Tax Freedom Day survey is that it recognizes there is only one taxpayer and helps Canadians understand the total tax burden they face.
Critics say the Fraser Institute’s numbers are incorrect and misleading. They argue it uses average family incomes instead of median incomes, which inflates what average Canadians actually pay in taxes; includes taxes paid by businesses as if they were paid by families and fails to factor in the benefits Canadians receive from paying taxes. An accurate calculation of Tax Freedom Day, they say, would be weeks or months earlier than what the Fraser Institute claims.
