The Labour Day holiday weekend in Canada is an end-of-summer rite for Canadian workers to reflect on their achievements of their toil and for their families and friends to come together to discuss what to expect with the resumption of a daily routine. For many Canadians this weekend the discussions around a campfire or on a cottage dock will likely be more of a lament for life’s daily challenges in Canada’s “new normal.” From taxes to food inflation to a growing debt load, there is much, too much for Canadians to consider.
Consider taxes
The Fraser Institute released its annual study recently about Canadians’ tax burden and it factored that the average Canadian family spent 42 per cent of income on taxes – more than what is spent on housing, food, and clothing combined. Canadians pay more to their governments than the necessities of life. In 2025, the average Canadian family earned an income of $121,111 and paid total taxes equaling $50,721. The Fraser Institute also stated that, through six decades, taxes have “grown much more rapidly than any other single expenditure for the average Canadian family.” Since 1961, the average family had an income of $5,000 and paid a total tax bill of $1,675, which is only 33.5 per cent.
Jake Fuss of the Institute stated, “At a time when the cost of living is top of mind across the country, taxes remain the largest household expense for Canadian families. While Canadians can decide for themselves whether or not they get good value for their tax dollars, they should understand how much they pay in taxes each year and how much the tax burden has grown relative to other necessary costs they must pay.”
In another recently published Fraser Institute study, it was factored that, in 2026 in Canada, the top 20 per cent of income-earning families will pay 65.3 per cent of all personal income taxes collected, and they pay 58.3 per cent of total taxes collected (income taxes, sales taxes, property taxes, etc.) by all three levels of government.
On a related note, the prime minister was recently commenting on the federal government’s spending and the need for it to incur larger-than-forecasted deficits to pay for Canada’s trade “war” with the U.S., and Mark Carney said, “In terms of measures on tax and others, we are constantly looking at our tax system, how we can make it as fair as possible, shift the burden to those who are most able to pay and in a way that incentivizes investment and entrepreneurship, right?” Is it possible the prime minister is hinting at new taxes to pay for new government expenditures and its increasing debt load? (Fact: every taxpayer will pay $3,348 this year just to cover interest payments on the federal and provincial debt). Ottawa circles are reviewing new sources of taxation for those “most able to pay”: home equity tax, capital gains on a sale of a house, or calculated on unrealized investment gains, or a wealth tax.
Consider rising food costs
As grocery prices continue to escalate and food bank usage rise to unprecedented levels in Canada, the federal government provided relief this summer by way of a New Groceries and Essential Benefits cheque that replaces the old GST credit cheques – so, a quarterly handout that will total more than $110 per month for a family of four. This “relief” is to help where Canadians suffer from some of the greatest food inflation in the G7 nations. This summer Statistics Canada reported food inflation of more than four per cent, outpacing general inflation. Vegetables are up nine per cent – the price of grapes are up 23 per cent in a year, and tomatoes are up 45 per cent! For most Canadians, the rise in food prices is shocking. CTV News did a piece on a Halifax shopping excursion where $100 bought “barely enough to fill two small grocery bags” with breakfast cereal, berries, pasta, bananas and bread – no meat. On the subject of meat, the Dalhousie University’s Agri-Food Analytics Lab reported in late July that meat and fish prices are increasing at incredible rates this summer – bacon (28 per cent), salmon (25 per cent) and pork (24 per cent).
It is now eighteen months and counting that food inflation is higher than the government’s stated monthly rate of inflation. In the month of September, Canadians will need to brace for even higher grocery prices as the impact of Canada’s retaliatory $27.5 billion worth of counter-tariffs on U.S. selected foods and goods will kick in – which has the potential of raising the cost of tariffed foods by as much as an additional six per cent.
Consider employment
The C.D. Howe Institute combed through available international data to report that Canada ranks near the bottom for income growth in the OECD and G7 nations. For the past two decades, Canadians’ income has grown slower than other advanced countries, and in the past decade Canada ranked dead last in the G7, and 32nd out of the 35 OECD countries. The Institute’s study attributes the country’s poor income growth data to “weaker purchasing power and slower improvements in Canadians’ standard of living.”
As disappointing as the prospect for income growth may be, for Canadians looking for work there is little promise. The trade war with the U.S. is causing great uncertainty in the Canadian marketplace, which in turn places a chill on business investment and hiring. The public sector continues to hire – but not everyone can draw their pay cheques from the government. Statistics Canada is reporting that the country continues to add retail, food services and part-time jobs each month, and the unemployment rate is steady around 6.5 per cent. However, beyond these data the business news source Better Dwelling assesses, “Outside a recession, Canada has never seen annual employment growth this weak.” Canada is in the midst of one of the worst years for job growth on record: “Excluding 2020, one has to go all the way back to 2014 to find weaker annual growth, when the global oil downturn began. The 2009 Global Financial Crisis is the only other June in at least 30 years to report such weak annual growth.”
Consider household budgets
Canadians are drowning in debt, many barely keeping their heads above water. How else do you describe the rash of studies and data points reported in the last six months. Here are a selected few:
-
- The majority of Canadians are having to spend more than they earn and need to dip into savings or household lines of credit or borrow to make ends meet. (Boston Consulting Group).
- Millions of Canadians have “no margin for error” – 53 per cent struggle to keep up with financial commitments, 50 per cent use savings and 33 per cent borrow to cover expenses. Forty percent of Canadians are deeper in debt this year than last year. (Financial Consumer Agency of Canada).
- One in every seven dollars Canadians earned is already spoken for to cover minimum debt payments before any other bill is paid or groceries are bought. Household credit market debt has risen to $3.25 trillion, up 4.4 per cent in a year – and this is the sixth consecutive quarter in which Canadians’ debt outpaced income growth. (Statistics Canada).
- Consumer bankruptcies are up 13.5 per cent in 2026 Q2 over Q1, and 10.3 per cent year-over-year. Insolvencies have more than doubled since 2020 – there has been six straight years of rising levels. (Office of the Superintendent of Bankruptcy).
- Nearly half (45 per cent) of Canadians who have renewed their mortgages this past year now face housing costs of 50 per cent or more of their monthly household budget. (rates.ca mortgage website).
- Canada’s household debt is 103 per cent of GDP, which makes Canadians the most indebted people in the G7 and the second worst in all the world. For every dollar of disposable income, Canadians owe nearly $1.77 in credit market debt. (OECD data).
It is no surprise that the latest survey from United Way Canada revealed that 60 per cent of Canadians report anxiety when thinking about their personal finances.
Consider that sinking feeling of falling behind
This week new data was published that confirms the living standards gap between Canadians and Americans has more than doubled in the past 25 years and, since 2014, Canadians’ prosperity has languished and their standard of living has progressively fallen behind the Americans’ living standards. The Fraser Institute study, “Squandering the Canadian Century,” factors the gap between the two countries has never been wider: U.S.’s GDP per person is $83,286, while Canada’s GDP per person is $59,529. Jake Fuss, co-author of the study, concludes, “It’s abundantly clear Canadian policymakers have failed to create an environment where we can prosper.” This is a sobering indictment of a Canadian economy that has become subpar to the Americans. Further to this point, Swiss bank UBS recently ranked Canada as the 13th wealthiest country in the world, with an average personal wealth of $399,886 USD per adult. Americans rank significantly higher (2nd in the world behind Switzerland) with an average wealth of $696,277 USD per adult.
It has become lamentable for Canadians who have witnessed the stunning deterioration, and even more so for those who are now trying to raise a family, hold down a job, and work through it. There’s a lot to think about this Labour Day. Small wonder how Canadians’ happiness standing in the world has fallen from 6th in 2013 to 25th ranked today – and sadly, Canadians aged 15-24 are ranked 71st. And this weekend, no doubt Canadians will be entering into conversations on their new normal: planning meals without meat and fresh vegetables, budgeting for mortgage payments, taxes, and minimum payments on their credit cards, and planning for family staycations rather than that indulgent Tuscany getaway that was recently in the news.
Chris George is an advocate, government relations advisor, and writer/copy editor. As president of a public relations firm established in 1994, Chris provides discreet counsel, tactical advice and management skills to CEOs/Presidents, Boards of Directors and senior executive teams in executing public and government relations campaigns and managing issues. Prior to this PR/GR career, Chris spent seven years on Parliament Hill on staffs of Cabinet Ministers and MPs. He has served in senior campaign positions for electoral and advocacy campaigns at every level of government. Today, Chris resides in Almonte, Ontario where he and his wife manage www.cgacommunications.com. Contact Chris at chrisg.george@gmail.com.
