Canadians Celebrate Tax Freedom Day

by Jason Gorringe, Tax-News.com, London

02 July 2001

Canada celebrated Tax Freedom Day on Friday, five days earlier than it did last year, according to a report released by The Fraser Institute, an independent public policy organisation based in Vancouver. The think tank releases an annual report on the day on which Canadians finish paying their federal, provincial, and local taxes, and start earning money for themselves.

The Institute's director of fiscal studies, Jason Clemens, believes that the day is a useful benchmark for Canadian taxpayers: 'It is all but impossible for an ordinary citizen to have a clear idea of the tax demands imposed on them by the various taxing efforts of the government,' he explained. 'Tax Freedom Day provides Canadians with clarity about the size of their tax burden.'

The total tax bill that is added up to compute Tax Freedom Day includes income taxes, sales taxes, property taxes, profit taxes, health, social security and employment taxes, import duties, and a whole host of other levies. Despite the fact that this year's freedom day falls one working week earlier than last year, the Institute says that this is not necessarily cause for celebration, pointing out than in 1961, the first year that the calculation was made, Canadians began earning money for themselves on May 3rd. 'While recent tax freedom days show a levelling off of the tax burden and 2001 a break from the ramping up of taxes, it is nevertheless the fact that Tax Freedom Day this year is 57 days later than it was 40 years ago,' said Mr Clemens.

Although as a whole, Canada celebrated freedom from taxes on the 29th, provincially, differing tax burdens result in varying Tax Freedom Days. The earliest provincial Tax Freedom Day fell on May 30th in Newfoundland, and the latest freedom day will be in Quebec, on July 4th. This is because Quebec exerts its tax pressure against families in a more aggressive fashion than other provinces, despite the fact that it receives a significant fraction of its revenue from other provinces through the federal government.

The Fraser Institute said that it hoped the 'high water mark' for Canadian Tax Freedom Day had been reached, and stated that there was considerable evidence to suggest that either 1999 or 2000 would have the dubious distinction of being remembered as the latest Tax Freedom Days in Canadian history.

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