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Canadians Continue to Have One of the Lowest Tax Burdens

Posted on February 2, 2019

Some of our very first steps as a Government were to lower taxes on middle income Canadians and to redesign a more generous, tax free Canada Child Benefit (CCB) that is income tested to ensure it is focused on those who need it the most.

Today, a typical middle-class family of four receives on average of about $2,000 more each year to help with the cost of raising children, saving for the future and contributing to the economy for the benefit of everyone.

It also means that Canadians continue to have one of the lowest tax burdens in the OECD.

An average two-income household with two children now keeps nearly 85 per cent of their gross income, once the Canada Child Benefit is factored in, the lowest rate among G7 member countries.

For single-parent households with two children, or for families with two children where only one parent is working, the benefits are even more significant with those families keeping more than 98 per cent of what they earn. (https://www.fin.gc.ca/n18/data/18-077_1-eng.asp)

Why then does the opposition continue to repeat the claim that the average middle-class family is paying more in taxes?

As I have pointed out in this column before it is a claim borrowed from a Fraser Institute report that focused on the elimination of certain tax credits but failed to consider benefits like the CCB.

As noted by Rhys Kesselman, Canada Research Chair in Public Finance at Simon Fraser University: “the combination of three provisions in 2015 inherited from the Conservative government (the Family Tax Cut, the child tax credit, and the Universal Child Care Benefit) were all replaced by the Liberal government in 2016 with the Canada Child Benefit, which distributed $2 billion more to families than the provisions that they replaced.”

Additionally, according to the Fraser Institute itself, it was families making over $150,000 who drew the biggest tax advantage under the previous Conservative Government’s “Family Tax Cut,” a tax cut which also yielded no benefits for single parents.

Not only does the CCB benefit all types of families, including single parent families, it is of greatest benefit to households with the lowest household income.

The CCB also ensures more financial support is provided to families up front, so they have the means to cover the costs of raising children, including the costs of fitness and arts programs, and saving for their education.

In our riding, approximately 17,400 children are benefitting from the more generous CCB each month.

As we get closer to the election, dubious claims of higher taxes on average Canadians at the hands of this government will no doubt be repeated.

But taxes remain low and targeted investments are working: the Canadian economy has been operating near capacity for over a year with the lowest debt to GDP ratio in the G7, job growth has been strong, the unemployment rate is at a 42-year low, and wages are rising.

And while reductive political headlines and binary choices might force us to choose sides, they do not reflect the reality that more Canadians are better off now than they were only a few short years ago.

Stephen Fuhr is the Member of Parliament for Kelowna-Lake Country and the Chair of the Standing Committee on National Defence

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