Enjoy the Decline

People actually voted for this:

This Sunday, June 8, marks Tax Freedom Day for Canadians, meaning they begin earning for themselves rather than the government, according to a Fraser Institute study.

“If Canadians paid all their taxes up front, they would work the first 158 days of this year before bringing any money home for themselves and their families,” said Jake Fuss, director of fiscal studies at the Fraser Institute.

Meanwhile, Canada's forecasted $90 billion in federal and provincial deficits will have substantial tax implications in future years.

Tax Freedom Day, which measures the total annual tax burden imposed on Canadian families by all levels of government, happened earlier this year. 

In 2025, Canadian families will pay $68,266 in taxes, representing 43.1% of their typical $158,533 income. This tax amount has risen, though it constitutes a slightly smaller percentage of total income than in previous years. 

It reflects income, payroll, health, sales, property, fuel, and "sin" taxes.

In 2025, Canadians will face significant tax changes, including increased CPP and EI premiums and a 2% alcohol tax hike, according to the Canadian Taxpayers Federation (CTF). Additionally, Ottawa's digital services and online streaming taxes, introduced last year, will cost taxpayers $1.2 billion and $200 million respectively.

“Tax hikes will give Canadians a hangover in the new year,” CTF federal director, Franco Terrazzano, earlier told Rebel News. “Canadians can't afford gas or groceries,” he added, a finding backed by Statistics Canada.

In 2023, StatsCan reported that wage growth lagged behind rising prices, especially for food and housing, leading to decreased purchasing power. Family car costs increased by 13.4%, food prices by 14.8%, and mortgage interest by 18%.

Recent RBC polling reveals 48% of Canadians struggle to maintain living standards due to rising costs.

The Fraser Institute says governments across the country should take note, and immediately cut taxes, the largest expense for families. 

“Canadians need to decide for themselves whether they are getting their money’s worth when it comes to how governments are spending their tax dollars,” Fuss said.

A 2023 Leger poll revealed that over half of Canadians think families should pay 25% or less of their income to the government, and four out of five support paying less than 40%.

“Canadians pay too much tax because politicians waste too much money. The government needs to provide relief by trimming the fat and cutting taxes,” said Terrazzano.

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Housing costs will average 52 percent of household income this year, says a federal memo. The figure in 2015 was 38 percent. “Canada is facing a housing crisis,” said the housing department document: “The cost to construct a residential building in Canada has increased by 58 percent since 2020.”

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The Liberals will also rebate all GST paid on newly built homes priced up to $1 million, purchased by first-time buyers, with a scale of rebates of new homes priced between $1 million and $1.5 million, 

But, according to a new Abacus Data poll, the majority of Canadians know nothing about Build Canada Homes nor the GST rebates. 

(Sidebar: I put that blame squarely on Canadians who vote without thinking.) 

The poll asked 2,200 Canadians what they thought of the Liberals' plans and found only 40% have heard of them, while only 14% who knew about them think the government should follow through with them. 

Abacus also found that when it comes to housing, Canadians want affordability. More than anything else however, they want financing tools that reflect their real financial situations and they have an appetite for innovation. This is especially so among younger Canadians. 

Prime Minister Carney is correct to focus on first-time home buyers. However, rebating the GST is not what this group needs to get into home ownership.  

Long before any paperwork can be done on rebates, first-time buyers scramble for years to save enough for the down-payments needed to qualify for mortgages.  

According to real estate portal Zoocasa, based on the average price in each market, to save up for a 20% downpayment would take 17 years, three months in Vancouver. In Toronto, it’s fourteen years, seven months and in Calgary it would take nine years, six months. 

Some first-timers use the Bank of Mom and Dad, but the majority don’t have that luxury and it is that majority the government should be helping, by fronting downpayments. 

The Liberals' plan focusses on housing supply and means to eventually build 500,000 new homes — every year! — through Build Canada Homes. (There’s a better chance of me becoming the starting quarterback for the Calgary Stampeders than there is to adding 500,000 new homes each year.)

Whether supply should still be the focus of the government’s spending could be answered in the May housing statistics released by real estate boards in Canada’s three most active markets: Calgary, Greater Vancouver and Greater Toronto. They show that if the housing crisis isn’t over, it’s certainly on pause. 

Housing supply in the three markets increased to levels not seen in the last three years. 

In Toronto, new listings increased 46.5% year-over-year. In Vancouver active listings were up 25.7%, year-over-year and 45.9% above the 10-year average. 

In Calgary, active listings increased a remarkable 98% year-over-year. 

Referencing the Abacus poll, Canadians want financing tools reflecting their financial situations and they have an appetite for innovation.