Canada Will Celebrate Tax Freedom Day On June 28

by Mike Godfrey, Tax-News.com, Washington

23 June 2004

Tax Freedom Day will finally arrive in Canada on June 28 this year, according to the calculations of the economic and social think-tank The Fraser Institute.

Tax Freedom Day is now calculated in most industrialised nations, and provides a simple reference point as to the true tax burden placed on citizens by their governments.

In this case, it effectively means that all income earned by Canadian taxpayers prior to June 28 was used to pay the government’s tax demands at all levels: federal, provincial and local.

For the average Canadian, Tax Freedom Day has been steadily slipping over the last four years. According to revised figures from Statistics Canada and government financial information, Tax Freedom Day fell on June 25 in 2001, June 26 in 2002, and June 27 in 2003.

“The fact that Tax Freedom Day has been steadily increasing since 2001 and comes only four days earlier than its peak should be cause for concern. All the talk of tax relief has not resulted in meaningful reductions in the tax burden for Canadian families,” commented Niels Veldhuis, senior research economist at the Institute.

Veldhuis points out that the measure is used simply to assess the price that we as citizens pay for government, rather than as an assessment of the quality of service governments provide.

“Tax Freedom Day is not a reflection of the quality of the product, how much of it each of us receives, or whether we get our money’s worth. It’s up to individual Canadians to decide how much value they receive in return for their tax dollars,” he explained.

According to the Institute, the average Canadian family experienced a $1,327 increase in their total tax bill between 2003 and 2004, more than 40% of which was the result of increases in social security, pension, medical, and hospital taxes.

The figures contrast sharply with those of the United States, where taxes have been generally falling, and Tax Freedom Day fell well over two months earlier than in Canada this year, on April 11.

Compared to the eurozone however, the tax burden would appear to be roughly similar. There, in 2002 (the last available figures), tax freedom day fell on June 28, whilst in the UK this year it arrived on May 30.

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