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Canadians spend more on taxes than bare necessities: study

People wait in line in front of a food truck for poutine during the first annual Montreal Poutine Festival in Montreal, Canada on July 3, 2015.

[OTTAWA] Canadians spend more on taxes than on food, clothing and shelter combined, according to a report released on Thursday, as increases in an average family's tax bill have outpaced the cost of basic necessities in the last five decades.

Last year, the average family made C$79,010 (S$83,390), of which C$33,272 went to taxes and C$28,887 went to food, clothing and shelter, said the study from public policy think tank the Fraser Institute, which calls itself non-partisan.

That means Canadians spent 42.1 per cent of their income on taxes and 36.6 per cent on basic needs. By contrast, 33.5 per cent of an average family's income went to taxes and 56.5 per cent was spent on necessities in 1961. "Over the past five decades, the tax bill for the average Canadian family has ballooned," Charles Lammam, co-author of the study, said in a statement.

Indeed, taxes have taken up a greater percentage of income than basic necessities for most of the years since the early 1980s, according to the report.

The increase in total taxes since 1961 has outstripped rises in the cost of food, shelter and clothing. Accounting for inflation, taxes were still up 149.2 per cent since then, the report said.

The Fraser Institute's tax index reflects both the "visible and hidden" taxes that Canadians pay to all levels of government, including income, property and other taxes.

A recent report from the Organization for Economic Co-operation and Development found the average income tax rate in Canada was 15.6 per cent, in line with the OECD average and slightly lower than the United States' 17.2 per cent.

With an election in Canada less than two months away and an economy that is struggling with the slide in oil prices, the study prompted questions for politicians on the campaign trail. "This is exactly why it is critical in this country we keep a national government dedicated to keeping taxes down,"Conservative Prime Minister Stephen Harper told reporters.

Mr Harper, who is running for a rare fourth consecutive term in office, has maintained Canada should stick with the Conservative plan of balanced budgets and low taxes.


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