In the past three decades, especially between 2019 and 2023, the average Canadian family’s tax bill has grown significantly more than what they’ve paid for shelter, food, or clothing.

Between 1992 and 2023, the average tax bill for the average Canadian family rose by $29,376 (166 percent) to $46,998, according to a recent research paper entitled “The Canadian Consumer Tax Index,” published by the Fraser Institute.

Between 2019 and 2023 alone, the average Canadian family's cumulative taxes rose $7,606. For comparison, between 1992 and 2020, families' tax bills grew by a four-year average of $2,896.

The think tank’s measurement of the average annual tax bill includes personal income taxes as well as payroll taxes, sales taxes, and taxes on property, profits, imports, natural resources, vehicles, and tobacco. The study also attributes corporate income taxes to households because the costs are passed on through higher prices and lower salaries.

During the four-year period between 2019 and 2023, payroll taxes and personal income taxes were the key drivers behind the rise in the cumulative tax bill, according to the Fraser Institute's calculations.

"The bulk of the increase in the tax bill is occurring at the federal level. There’s been a 28.1 percent nominal increase in federal taxes paid by the average family between 2019 and 2023," Jake Fuss, director of fiscal studies for the Fraser Institute told The Hub in an email. During the same years, provincial taxes rose 14.4 percent.

In 2020, declining tax revenues and an increase in family incomes caused the average tax bill to drop temporarily. The years following saw the tax bill increase and exceed pre-COVID levels, as the economy recovered and government revenues rebounded, wrote the author of the Fraser bulletin.

While it's difficult to discern the precise policy changes behind the rising tax burden, Fuss said the recent increases in payroll tax rates by the federal government are likely a contributing factor. He added that between 2015 and 2022, the federal government's decision to lower the second-lowest personal income tax rate along with their removal of several tax credits, caused 86 percent of middle income families to pay more income taxes.  This "does help explain why income tax bills have generally risen over the last eight years or so," he said.

From 1992 to 2023, food and shelter saw increases of 109 and 147 percent, respectively, while the discretionary spend on clothing rose by just 13 percent.

The average Canadian family currently spends 43 percent of their $109,235 income on taxes and 21 percent on shelter, both of which are well within the historical average back to 1992, according to the most recent data of the report. Between 1992 and 2023, their average expense on food as a share of income fell from nearly 14 percent to 11 percent. Clothing fell from five percent to two percent.

As of 2019, Canada experienced a remarkable increase in the average family’s spending on taxes and necessities. After that year, discretionary spending on clothing was the only expense that fell.

Between 2019 and 2023 the average shelter cost rose $3,988 and food costs rose $1,911. Looking back to 1992, the average four-year increase for shelter and food was $1,508 and $703. This means that shelter and food costs are rising at a greater pace than the historic average, likewise with taxes but not by nearly as much, in dollar amounts.

In the past five years the average Canadian family’s spending on clothing, meanwhile, fell by $800. That’s a substantial shift (a decline of over 600 percent) from 1992 to 2020’s average four-year spending increase of $148. Clothing, being discretionary, represents spending that can be made only after necessities are met.

Between the numerous tax jurisdictions of Canada and the United States, Canada’s top marginal tax rates are the highest across the board according to previous Hub reporting.

Today The Hub is proud to announce that ten finalists have been selected for the second annual Hunter Prize for Public Policy, along with their groundbreaking ideas to fundamentally fix Canada’s housing affordability crisis.

This year’s competition features a diverse group of finalists targeting areas including zoning rules, infrastructure financing, and regulatory and tax reform, to find a policy solution that would begin to alleviate Canada’s severe housing pains.

“Housing availability and affordability are enormous problems in the Canadian economy and they’re getting worse,” said Derrick Hunter, a trustee at the Hunter Family Foundation, which funds the prize, in an interview with The Hub. “We need to have novel solutions to tackle this problem, which stems from multiple causes. We’re excited to see the reaction of so many creative people willing to take the time to put ideas forward, to help to address the challenges. Clearly, we are touching a nerve.”

The finalists were picked from nearly 300 entries, a hundred more than last year’s competition garnered. The winner will be chosen by an esteemed panel of judges, including former Toronto chief city planner Jennifer Keesmaat,  journalist Amanda Lang, economist and housing expert Mike Moffatt, former Canada Mortgage and Housing Corporation CEO Evan Sidall, and real estate analytics specialist and entrepreneur Ben Rabidoux.

The Hub will publish 10 opinion editorials written by the finalists that will explain their high-impact policy reform to improve housing affordability for renters or buyers. The winner will be unveiled in October.

The finalists are vying for $50,000 in cash prizes, including $25,000 for the winner to help translate their idea into actionable public policy. The runner-up will receive a $5,000 prize. Those placing third through 10th will receive prizes of $2,500.

The 10 finalists, in no particular order, are as follows.

• Ben Dachis, a vice president of research and policy, for a proposal to utilise a different model of infrastructure financing to lower housing costs
• Chinonso Obeta, a policy analyst, for a proposal to tackle the financialization of housing
• Davis Kyle, a procurement and contract specialist, for a proposal to reform zoning regulations at the provincial level
• Frazier Fathers, a non-profit consultant, for a proposal to reform Committees of Adjustment
• Kristina Kulikow, a financial analyst, for a proposal to increase housing supply through land value tax reform
• Luhan Yao, a recent university graduate, for a proposal to encourage below-market rental options through tax incentives
• Phillippe Fournier, an architect, for a proposal to upend municipal zoning rules
• Rielly Young, a software engineer, for a proposal to develop a commercial-to-residential incentive
• Rui Tang, a graduate student at the University of Toronto, along with co-author Kexin Cui, for a proposal to transform single-family homes into multi-unit properties
• Stephanie Cantlay, an urban planner, along with co-author Nicholas Kuhl, for a proposal to reform municipal financing mechanisms to allow for more affordable housing

The Hunter Prize for Public Policy, funded by the Hunter Family Foundation, aims to shake up Canadian policymaking by promoting fresh ideas to take on a “wicked problem” and improve the economic and social well-being of Canadians.