Canadians Make Over $1.1 Trillion

According to a recent Stats Canada National Household Survey, Canadians are very industrious: collectively, 27.3 million of us earned $1.1 trillion, and two thirds of Canadians pay taxes. 

With Financial Literacy Month fast approaching in November, these new earnings statistics underscore the need for tax and financial literacy at home, at work and in the financial services marketplace. That’s because we also start very young.

According to the survey[1],  95% of Canadians age 15 years and older have some form of income. Two-thirds of us pay income taxes and on average we fork over 16.4% of total income. Fully 70% of that income came from employment income.

Because tax is over-deducted at source by employers—which means the government gets a good share of the first dollars earned—the vast majority of us must file a tax return to a get a refund. The tax refund amounts owing as a result of over-deductions at source can be large—an average refund of just under $1700 is payable to Canadians.

There are other important reasons to file a tax return:

• 70% of Canadians receive government transfers, which represent 12.5% of their total income. 
• For just under 13% of Canadians, government transfers are their only source of income. This include the Canada Pension Plan (CPP/QPP), Old Age Security (OAS), Guaranteed Income Supplement (GIS), Employment Insurance (EI), Child Benefit Programs and various forms of social assistance, worker’s compensation, and numerous refundable tax credits from both federal and provincial governments.

However, accurate tax filing begins with this reality: in most cases, the CRA already knows what a taxpayer’s income is because they will have a copy of all the slips. What they don’t know about is the legitimate deductions and credits taxpayers may be eligible for.

That’s why making sure you have filed the best tax returns for your family in 2013 begins with some year-end tax planning, including applying for any missed provisions on previously filed returns over the past decade.   

Getting organized now will in turn help Canadians save more of that $1.1 trillion dollars in earnings so that individuals throughout the country can build more wealth for the future.