Many Canadians feel stuck between high taxes and paychecks that don’t keep up. Every day, costs keep rising, but wage growth is stagnant, and people, especially the youth, are falling behind. Many Canadians feel weighed down by taxes.
Canadians are cutting back on eating out, travel, and extras just to get by. This stress weighs heavily, making it hard to plan or feel secure. People are seeing their pay go to income tax, sales tax, and property tax.
In 2024, the average family paid 43% of their income to various taxes, including income, sales, and property taxes. That’s about $64,610 a year—more than most families spend on housing, food, and clothing combined.
Taxes have risen sharply since 1961, up more than 2,700%, according to the Fraser Institute. Wealthier families carry a large share, paying over 61% of income taxes, but middle-income households feel the burden too. Nova Scotia tops the charts with a tax rate of 54%, while Ontario and Quebec are close behind. These high rates can discourage people from working more or saving for the future.
Canada’s tax system is complex. Wealthy individuals often find ways to pay less, using deductions or business write-offs. Some high earners pay very little tax, thanks to loopholes and charitable donations. Ordinary workers don’t have the same options and feel the strain. This sense of unfairness is growing.
Wage Stagnation
Paychecks aren’t stretching as far as they used to. In 2023, the median after-tax income was $70,500—a 3.4% drop from the year before. Inflation hit 6.8%, so the cost of living soared while incomes stayed flat. Market income remained the same, and government support dropped after COVID-19 programs ended. The average salary in 2025 sits at $67,282, about $5,600 per month. This isn’t enough in cities where living costs are high.
Low-wage workers are falling behind. In 2021, over 1 in 5 workers with only a high school diploma earned less than two-thirds of the average hourly wage. Young people aged 15-24 earned $18.23 an hour, while older workers averaged $32.39. Part-timers made $24.85 an hour; full-time workers earned $33.22. The gender gap is still there—men averaged $34.26 an hour, women $30.47, all based on 2021 numbers.
Some industries, like mining, pay well with weekly earnings around $2,300. But that’s not the norm. Retail and hospitality jobs usually pay the lowest rates. Even in places like Nunavut, where wages are higher, the high cost of goods and services cancels out much of the benefit. In 2022, the average income in the Northwest Territories was $100,500, but expenses remain steep.
The Affordability Squeeze
The cost of living crisis is hitting hard. About one in seven Canadians uses food banks. In 2023, nearly a quarter of couples with children struggled to afford enough food. Food insecurity rates were lower for seniors, but still troubling overall. Inflation reached 2.3% in 2025, and housing costs have doubled. Two-thirds of young Canadians are putting off starting families because home ownership feels out of reach.
Poverty rates are climbing again. In 2022, 9.9% of Canadians lived below the poverty line, up from 7.4% in 2021. Low-income households are seeing their earnings drop, with the poorest losing almost $400 on average in 2024. The income gap is growing, leaving the bottom 40% worse off, even with government aid.
Unemployment is making things harder. In 2025, the national rate is 6.5%. Youth unemployment is four times higher at 25%. Job scarcity pushes many young people into low-paid, unstable work, trapping them in a cycle of financial hardship. High taxes eat into what little they earn.
Taxes and wages aren’t the same across the country. In 2024, median after-tax income dropped by $5,800 in Nova Scotia, $4,400 in New Brunswick, and $3,400 in Prince Edward Island. Seven provinces reported a decline. The territories and New Brunswick saw some gains, but mostly from sources other than wages. Salaries dropped by $14,000 in the territories.
The wealthiest Canadians, those in the top 1%, averaged $586,900 in 2022, down 5% from the year before. The top 0.1% earned over $2 million, while the bottom half took home just $20,800—a 7.6% decrease. Since 2019, top earners have seen their incomes rise by almost 3%, while the bottom half gained just 2%. The gap is widening.
British Columbia indexes its tax brackets to inflation, giving a slight break as rates rose only 2.8% in 2025. Still, provincial taxes stacked on top of federal rates add up. Quebec’s top rate is 53.3%, while Alberta’s is 39%. All provinces apply heavy income taxes, which slow economic growth.
How This Impacts Canadians
Heavy tax bills and flat wages are hurting people’s mental health. Many families work longer hours but take home less. They have less money to save or spend, and retirement looks less certain. Many seniors survive on $42,000 a year or less, with some getting by on just $17,000.
Young adults are hit hardest. High housing costs delay key life steps, like starting families or buying homes. Student debt adds to financial stress, and some are choosing to leave Canada for better opportunities. High taxes can kill the drive to start businesses or work extra hours, making Canada less competitive. In 2018, Canada ranked seventh in global tax rates, but by 2024, its competitiveness had faded.
Complex tax rules make life harder for most people. The wealthy can afford accountants to reduce their tax bill. Average workers can’t. The alternative minimum tax increased to 20.5% in 2024. It was meant to target high earners but just makes tax filings harder for everyone.
Taxes pay for social programs. Healthcare is funded by the government, so most people pay less out-of-pocket. Middle-income families receive about $41,000 in public services each year, including education and infrastructure. But there are problems—long waits for medical care and varying service quality leave many questioning the value they receive.
Canadians pay a bit more in taxes than Americans. The average top tax rate here is 45.7%, compared to 47.9% in the U.S. But Americans face much higher healthcare costs. Canadians get universal coverage, but high taxes leave less money for daily spending. Many feel the trade-off is unfair.
Canada Needs Change
The current tax and wage situation demands attention. Simplifying the tax code could give workers a break. Lowering marginal tax rates might help boost earnings and savings. Better tax credits and fairer deductions would make a big difference. Raising the minimum wage is key, and payouts should keep pace with inflation. Families need relief now.
Targeted help for low-income Canadians is critical. Expanding government aid could bring poverty rates down. Young people need better job opportunities. Housing needs urgent fixes so more people can afford a home. The system should reward hard work, not punish it.
Closing the income gap is important. Tax rules must be fair, and loopholes for the rich must end. More transparency would help rebuild trust. Many Canadians feel left out and unheard. Their hardship is real, and change can’t wait.
Canadians are under strain. High taxes take nearly half of what families earn. Wages are stuck, while daily costs rise. Many can’t pay for basic needs, and young people see fewer chances for a good future. Inequality is growing quickly.
In 20234, taxes topped housing costs. Poverty increased in 2023, with many young people out of work. Regional differences make the situation worse. Public services help, but not enough. The tax system feels unfair and outdated. Canada needs real solutions—fast. People are strong, but their patience is running out. Change must happen now.
