Tax Freedom Day in Canada: June 17

This year, Tax Freedom Day for Canadians fell on June 17, 2022, which is four days later than last year, and almost a full two months later than the US hit the same milestone on April  18. That means when you add tax and inflation together, Canadians have a more compelling financial issue than our neighbours to the South. For those reasons, working with tax and financial advisors is critical as there are many opportunities to save money on taxes and benefit from generous tax credits here in Canada. Professionals can make sure Canadians don’t miss out in these expensive times.

 This Tax Freedom Day calculation from the Frasier Institute is based on average Canadian family earnings of $140,106 and a total tax bill of $64,610 (46.1%).

According to this data from the Frasier Institute, a later Tax Freedom Day for Canadians this year was anticipated due to the total tax revenue of Canadian governments increasing faster than Canadian income levels.  With inflation presenting a significant challenge to the cashflow of many Canadians, it’s an even more important time for tax and financial professionals to work with their clients to focus on tax-efficient investment opportunities.

When faced with the sheer number of days the average Canadian has to work for the government before working for themselves, it puts the role taxes play in erosion of wealth into perspective.  Utilizing a professional to file your taxes can ensure your Tax Freedom Day comes sooner. However, tax-efficient planning should start long before it’s time to file taxes.