00:03:18.460I mean, ultimately, that decision is up to each person.
00:03:20.940They can weigh how much they get in services and the quality of services versus how much they're actually paying.
00:03:25.880But what we do see is, you know, just because you're spending a whole bunch of money doesn't necessarily mean that it's the most effective, efficient way to do that.
00:03:33.520There is plenty of potential for government waste.
00:03:36.200I mean, there can be handouts to corporations at the expense of taxpayers.
00:03:39.840What we're seeing, you know, health care spending has increased a lot over time, but we're not necessarily seeing wait times come down.
00:03:45.460In fact, Canada actually performs quite poorly compared to other universal health care countries around the world on wait times and on number of doctors and hospital beds and other categories like that.
00:03:55.720So just because you're spending a whole bunch of money doesn't necessarily mean you're getting best results.
00:04:00.660But ultimately, it is up to people to decide if they're getting good value for those tax dollars.
00:04:05.680I know you mentioned the comparison between Canada and other OECD countries.
00:04:09.740How has the track been in Canada historically?
00:04:12.560Is this number staying relatively constant?
00:04:14.360Are we seeing it going up or, dare I say, even down?
00:04:18.100Yeah, so for the tax rates for Canada, so we go back all the way to 1961 in our report.
00:04:23.860That's when the data was first available from Statistics Canada.
00:04:27.660And what we saw at that time is that the tax rate was at about 33.5% for the average family back in 1961.
00:04:34.640And basic necessities actually amounted to over half of your income for the average family.
00:04:39.940But that's remarkably shift over time now.
00:04:42.640So now we see basic necessities taking up about a third of your income at about 36%, whereas the tax rate now is at about 42.6% for average families.
00:04:52.860So the tax rate has generally been increasing over time.
00:04:56.000So that has been a remarkable shift that we've seen.
00:04:59.100Particularly in recent years, we've seen things like payroll taxes and the elimination of certain tax credits.
00:05:04.100And that's certainly increased the tax rate for average Canadian families.
00:05:08.120And that's something that we'll keep our eye on moving forward as well.
00:05:12.580These credits are historically factored into these numbers, because I know that can make it, in many cases, even more complicated to try to calculate.
00:05:19.600Yeah, tax rates, tax credits, things like that, they're all incorporated into our calculation.
00:05:27.260Like I said, you know, we have a whole bunch of different categories, like income tax rates, corporate income tax rates, property taxes, and so on.
00:05:34.440So we do calculate, you know, various things into those calculations every year.
00:05:38.900I know there have been a number of policies in the last few years that have forced there to be more transparency on credit card bills, on phone bills, on hydro bills.
00:05:47.440A part of me thinks, when I look at this, that Canadians could benefit from a breakdown of exactly how much they're spending in taxes every time they do something.
00:05:54.260Because certainly it seems like, just given the total sum here, the individual places where people are being taxed would probably shock a lot of people.
00:06:02.380Yeah, and that's ultimately what this report aims to do.
00:06:05.380I mean, when we look at housing costs, for example, we look at that in the study, you know, amounts to about $20,000 per year, or about 22% of your annual income for the average family.
00:06:16.540But when you actually consider how much taxes amount to, it's nearly double what actually is in housing.
00:06:21.860So, you know, as a lot of Canadians are concerned about paying their rent, or paying their mortgage right now, they should also consider, you know, how much they're actually paying in taxes.
00:06:29.280It's the single largest expense for Canadian families right now, and that's certainly a big consideration for them when they're considering their budgets every year.
00:06:38.140What are the areas, if any, where people might not realize they're getting taxed, or where the number might be higher?
00:06:45.360Because I know that I mentioned at the top of the interview here, your personal income tax, your sales tax.
00:06:50.980I mean, these are things that people see a lot more.
00:06:52.880You must be factoring some numbers here that people might not realize are there, or might not realize are as high as they are.
00:07:10.340But what we actually see with corporate income taxes and payroll taxes is that a lot of this, the burden is actually passed on to employees in the form of lower wages.
00:07:19.080So it's not necessarily something that people will think of.
00:07:22.100They think it's kind of just a burden on the employer, for example.
00:07:25.880But we do see that there are results for lower wages for employees.
00:07:30.340And it can also have higher unemployment effects as well, because you're increasing the cost for businesses, and they're going to pass on that cost to employees.
00:07:37.960So that's something that we see out in the empirical research, that this can be passed on to employees.
00:07:44.220I know predictions are always tough, especially when you're talking about a study that's really data-focused.
00:07:50.340But when you do this for 2020, you know, looking at some of the changes that we've seen in the economy this year, do you think when you do the next version, looking back, it's going to be a bit more challenging, just given all of the factors that I think Canadian families are dealing with with job losses?
00:08:40.120And I just have to clarify, I think at the beginning I may have messed up the year.
00:08:42.840The study is 2020, the data in the study are from 2019.
00:08:46.760So obviously you're looking back to the data that are available, given this year's aren't in yet.
00:08:50.900So I just wanted to clarify that for those listening.
00:08:53.860And I do think to the point that you just brought up, a lot of the concerns that we may see if people are finding that, yes, their job losses are happening and income's going down,
00:09:03.560that the percentage people are spending on taxes, even if the dollar figure isn't higher, may actually be quite significantly inflated.
00:09:10.300So perhaps there's going to be a bit more awareness when we look at these numbers.
00:09:13.100Yeah, that's certainly an important consideration.
00:09:16.640You know, ultimately, this study is about informing Canadians of how much their tax bill is.
00:09:20.940And, you know, it has increased by over 2,000 percent since 1961.
00:09:25.440Even when we account for inflation, it's about 169 percent increase.
00:09:29.060But ultimately, that percentage of income number is probably the most important one.
00:09:33.660Just seeing that general increase over time, where we were at about 34 percent of income back in the 60s,
00:09:38.900and we're now at about 43 percent of income, and this is likely to increase as well in the future.
00:09:43.580So that's certainly an important number that I think Canadians will be informed of.
00:09:48.100Jake Fuss, economist with the Fraser Institute, joining me on the line now.
00:09:52.560The report, the Canadian Consumer Tax Index 2020.