According to this August 2023 Fraser Institute Research Bulletin, Canadians are faced with a continually higher tax burden on their income each year. The information below applies to our basic necessities, food, clothing and shelter.
• The total tax bill for Canadians, which includes all types of taxes, has increased by 2,778% since 1961, and the tax bill has grown more rapidly than any other single expenditure item.
• Both Provincial and Federal governments should be more accountable for what should be considered “hyper-tax-inflation”.
• From 1961 to 2022 taxes in Canada have grown more rapidly, expenditures on shelter increased 1,880%, clothing by 654%, and food by 970%; CPI has increased 863% during that time period.
• At no other time in history have we needed to be “hyper-tax-vigilant”, we need to find every means possible of tax avoidance (tax evasion could end you up in jail).
• When we think about our savings pre- and post-retirement, here are couple of safe ways other than RRSPs and RRIFs to dramatically reduce taxable income associated with your savings.
1. Tax Free Savings Accounts (TFSAs) for most is the first consideration, if you are saving for your children’s education, use a Registered Education Savings Plans (RESPs) where the government will give you grants along with tax efficiency.
2. Then, in most other accounts, ensure income earned on your savings get tax preferred treatment. Generating interest income is the least tax efficient. Dividends and option income can be meaningfully more tax efficient.
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