The Fraser Institute, an independent non-partisan Canadian think-tank, released a study on July 9, 2026, showing that Canada's tax system is progressive, with the top 20% of income-earning families paying more than half (58.3%) of all taxes—including personal income, sales, and property taxes—despite common misperceptions to the contrary.
Disproportionate Tax Burden on Top Earners
The study, titled Measuring Progressivity in Canada’s Tax System, 2026, emphasizes that fairness should be assessed by comparing the share of income earned by a group to its share of total taxes paid. By this measure, the top 20% of income-earning families are the only group that pays a disproportionately large share of the total tax burden relative to their income. Specifically, they pay 58.3% of total taxes while earning 49.5% of total family income. On personal income taxes alone, this group contributes nearly two-thirds (65.3%) of all personal income taxes collected.
Bottom 20% Pay Far Less
In contrast, the bottom 20% of income-earning families pay just 1.7% of total taxes while earning 4.3% of total family income. According to Jake Fuss, director of fiscal studies at the Fraser Institute and co-author of the study, “The idea that top earners don’t pay their ‘fair share’ of taxes ignores the evidence that these families pay a disproportionately large share of the total tax bill.”
Consequences of Further Tax Hikes
The study also warns that raising taxes on top earners could lead to unintended economic consequences. Previous research cited in the report indicates that tax increases on high-income individuals often result in behavioural changes—such as tax planning, avoidance, or evasion—that reduce taxable income, causing governments to collect less revenue than anticipated. Additionally, higher taxes on top earners make Canada less attractive for highly skilled professionals like doctors, scientists, managers, and software engineers, potentially harming the country's competitiveness.
Fuss concluded, “The assertion that the top 20 per cent of earners in Canada are not paying their fair share is simply not supported by the evidence. Canadians should be aware that the country’s tax system is already progressive, and calls to raise taxes further on top earners can have unintended economic consequences.”
About the Fraser Institute
The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, Halifax, and Montreal, and connections to a global network of think-tanks in 87 countries. Its mission is to improve the quality of life for Canadians by studying and communicating the effects of government policies, entrepreneurship, and choice. To maintain independence, the Institute does not accept grants from governments or contracts for research.
