The REAL Reason Canadians Pay So Much in Taxes

It's no secret that Canadians pay a lot in taxes. But have you ever stopped to wonder why? The answer may surprise you.

In a recent video, tax expert Peter Fabry breaks down the complex evolution of Canadian and Ontario taxation. He compares it to a "tax lasagna" – with multiple layers that have been added over time.

The first layer of this "tax lasagna" is municipal property tax, which dates back to the 18th and 19th centuries. This tax is levied by your local government based on the value of your property. It's the oldest tax in Canada and is used to fund local services such as schools, roads, and garbage collection.

The second layer is the provincial sales tax (PST/HST). This tax was first introduced in Ontario in 1936 and is applied to most goods and services purchased in the province. It is currently set at 8% in Ontario, but this rate has fluctuated over the years.

The third layer is the federal Goods and Services Tax (GST). This tax was introduced in 1991 at a rate of 7%. However, it was later reduced to 5% in an effort to stimulate the economy.

The fourth and final layer is income tax, both federal and provincial. Federal income tax was first introduced in 1917 as a temporary measure during World War I. It was later made a permanent tax, and Ontario followed suit in 1936 with its own provincial income tax.

But the most significant change to Canadian taxation came in 2010 with the introduction of the Harmonized Sales Tax (HST). This tax combined the 5% federal GST with the 8% provincial portion, resulting in a current rate of 13% in Ontario.

While all of these taxes may seem overwhelming, Fabry's goal is to simplify this complex history for a general audience. He believes that understanding the evolution of Canadian taxation is the key to making informed decisions about your finances.

If you're ready to take control of your taxes and learn more about how they affect your financial future, book a call with Peter Fabry today. With his extensive knowledge and expertise, he can help you navigate the world of Canadian taxation and make the best decisions for your financial well-being.

Don't let the "tax lasagna" overwhelm you. Take the first step towards financial freedom by booking a call with Peter Fabry now.