National
Low and middle income Canadians hit hardest by high marginal effective tax rates

From the Fraser Institute
By Philip Bazel
A new study published by the Fraser Institute today finds that Canadian families and individuals with annual incomes between $30,000 and $60,000 face marginal effective tax rates near or above 50%.
Among the provinces, BC has the lowest tax rates of 38%.
Ontario has a rate of 50% – and high-income families at $300,000+ are taxed lower at 44%.
Families with modest income brackets consistently face disproportionately high marginal effect tax rates, raising questions of fairness and efficiency in the tax and transfer system.
Dig into the numbers and see how your province placed here.
Canadian families and individuals with annual incomes between $30,000 and $60,000 face marginal effective tax rates near or above 50 per cent, finds a new study published by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.
“Canadian families with modest incomes face high marginal effective tax rates, often higher rates than Canadians in top income tax brackets,” said Jake Fuss, director of fiscal studies at the Fraser Institute, which published Marginal Effective Tax Rates for Working Families in Canada by Philip Bazel, an associate at the School of Public Policy at the University of Calgary.
The marginal effective tax rate (METR) measures the personal income taxes paid (federal and provincial) and the reductions in government benefits, resulting from earning an extra dollar. For example, the Canada Child Benefit, a monthly payment, is reduced as family income increases. In other words, the effective tax rate is the combination of taxes you pay and benefits you lose as you make more money.
Crucially, across the provinces, individuals and families with relatively modest incomes face the highest rates. This unfortunately creates a disincentive for earning additional income, as the financial benefits are significantly offset by increased taxes and/or reduced government benefits.
Canadian families with modest incomes, particularly those earning between $30,000 and $60,000, face the highest marginal effective tax rates. For example, families earning a household income of $60,000 are subject to an effective tax rate of 50 per cent or higher in every province. In Quebec, the METR is as high as 67 per cent at this income level.
Among provinces, BC has the lowest rate (38 per cent) averaging across the $30,000 to $60,000 bracket. Ontario’s rate for the $30,000 to $60,000 bracket is 6 percentage points higher (50 per cent) than high-income families at $300,000 or higher (44 per cent).
“Families with modest income brackets consistently face disproportionately high METRs, raising questions of fairness and efficiency in the tax and transfer system,” Bazel said.
“These findings highlight the need to prioritize METR reductions for low-income families.”
Author:
2025 Federal Election
Highly touted policies the Liberal government didn’t actually implement

From The Audit
State capacity is the measure of a government’s ability to get stuff done that benefits its population. There are many ways to quantify state capacity, including GDP per capita spent on health, education, and infrastructure versus outcomes; the tax-to-GDP ratio; judicial independence; enforcement of contracts; and crime rates.
But a government’s ability to actually implement its own policies has got to rank pretty high here, too. All the best intentions are worthless if, as I wrote in the context of the Liberal’s 2023 national action plan to end gender-based violence, your legislation just won’t work in the real world.
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So I thought I’d take a look at some examples of federal legislation from the past ten years that passed through Parliament but, for one reason or another, failed to do its job. We may agree or disagree with goals driving the various initiatives, but government’s failure to get the work done over and over again speaks to a striking lack of state capacity.
The 2018 Cannabis Act (Bill C-45). C-45 legalized recreational cannabis in Canada, with a larger goal of regulating production, distribution, and consumption while reducing illegal markets and protecting public health. However, research has shown that illegal sales persisted post-legalization due to high legal prices and taxation. Studies have also shown continued use among children despite regulations. And there are troubling indicators about the overall impact on public health.
The 2021 Canadian Net-Zero Emissions Accountability Act (Bill C-12). The legislation aimed to ensure Canada achieves net-zero greenhouse gas emissions by 2050 by setting five-year targets and requiring emissions reduction plans. However, critics argue it lacks enforceable mechanisms to guarantee results. A much-delayed progress report highlighted a lack of action and actual emissions reductions lagging far behind projections.
The First Nations Clean Water Act (Bill C-61) was introduced in late 2024 but, as of the recent dissolution of Parliament, not yet passed. This should be seen in the context of the Safe Drinking Water for First Nations Act (2013), which was repealed in 2021 after failing to deliver promised improvements in water quality due to inadequate funding and enforcement. The new bill aimed to address these shortcomings, but a decade and a half of inaction speaks to a special level of public impotence.
The 2019 Impact Assessment Act (Bill C-69). Passed in 2019, this legislation reformed environmental assessment processes for major projects. Many argue it failed to achieve its dual goals of streamlining approvals while enhancing environmental protection. Industry groups claim it created regulatory uncertainty (to put it mildly), while environmental groups argue it hasn’t adequately protected ecosystems. No one seems happy with this one.
The 2019 Firearms Act (Bill C-71). Parts of this firearms legislation were delayed in implementation, particularly the point-of-sale record keeping requirements for non-restricted firearms. Some provisions weren’t fully implemented until years after passage.
The 2013 First Nations Financial Transparency Act. – This legislation, while technically implemented, was not fully enforced after 2015 when the Liberal government stopped penalizing First Nations that didn’t comply with its financial disclosure requirements.
The 2019 National Housing Strategy Act. From the historical perspective of six years of hindsight, the law has manifestly failed to meaningfully address Canada’s housing affordability crisis. Housing prices and homelessness have continued their rise in major urban centers.
The 2019 Indigenous Languages Act (Bill C-91). Many Indigenous advocates have argued the funding and mechanisms have been insufficient to achieve its goal of revitalizing endangered Indigenous languages.
The 2007 Public Servants Disclosure Protection Act (PSDPA). Designed to protect whistleblowers within the federal public service, the PSDPA has been criticized for its ineffectiveness. During its first three years, the Office of the Public Sector Integrity Commissioner (OPSIC) astonishingly reported no findings of wrongdoing or reprisal, despite numerous submissions. A 2017 review by the Standing Committee on Government Operations and Estimates recommended significant reforms, but there’s been no visible progress.
There were, of course, many bills from the past ten years that were fully implemented.¹ But the failure rate is high enough that I’d argue it should be taken into account when measuring our state capacity.
Still, as a friend once noted, there’s a silver lining to all this: the one thing more frightening than an inefficient and ineffective government is an efficient and effective government. So there’s that.
The fact that we’re still living through the tail end of a massive bout of inflation provides clear testimony that Bill C-13 (COVID-19 Emergency Response Act) had an impact.
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Business
B.C. Credit Downgrade Signals Deepening Fiscal Trouble

Dan Knight
Spending is up, debt is exploding, and taxpayers are footing the bill—how David Eby’s reckless economics just pushed British Columbia one step closer to the brink.
So here’s something they’re not going to explain on CBC—British Columbia just got slapped with yet another credit downgrade. Actually, two. On April 2nd, both S&P Global and Moody’s—two of the most powerful financial watchdogs on the planet—downgraded B.C.’s credit rating. And not by accident. This wasn’t a glitch in the system or some market hiccup. This was a direct consequence of political recklessness.
Let’s talk numbers. S&P cut B.C.’s rating from ‘AA-’ to ‘A+’. Moody’s dropped it from ‘aa1’ to ‘aa2’. That’s the fourth downgrade in four years. Four. This is a province that used to hold AAA status—the financial gold standard. That means British Columbia was once considered one of the most fiscally stable jurisdictions not just in Canada, but globally. Not anymore.
Even more alarming? S&P didn’t just hit their long-term rating—they downgraded the short-term rating too, from ‘A-1+’ to ‘A-1’. Why? Because even in the short term, B.C. is starting to look like a risk. A liquidity risk. That means the money might not be there when it’s needed. That’s a red flag for anyone with a calculator and a memory longer than five minutes.
This is not some vague bureaucratic move. This is a direct indictment of the NDP’s economic policies in British Columbia. This is what happens when you treat taxpayers like an ATM machine and the economy like a social experiment. And now, international financial institutions are officially saying what a lot of people have been screaming for years: B.C. is in serious fiscal trouble.
Causes: Spending, Deficits, and Revenue Pressure
The core driver behind the downgrades is the ballooning of operating and capital deficits, coupled with aggressive government spending. According to B.C.’s 2025 budget, unveiled by Finance Minister Brenda Bailey on March 4, the provincial deficit is projected to hit $10.9 billion in 2025–26—up from $9.1 billion the previous year. Moody’s projects an even higher shortfall of $14.3 billion, raising red flags about B.C.’s ability to fund programs without unsustainable borrowing.
S&P cited the impact of reduced immigration levels and ongoing trade uncertainty as key headwinds, limiting economic growth and shrinking the province’s revenue base. Moody’s pointed to persistent budgetary gaps and limited progress on deficit reduction, highlighting the growing gap between revenue and expenditure.
Additionally, spending growth has significantly outpaced both population and inflation. Data from the Fraser Institute shows that between 2019/20 and 2024/25, program spending increased by 51.6%, whereas only 29.2% was needed to keep pace with demographic and price trends. This excess has pushed real per-capita expenditures to historic highs, without a corresponding rise in revenue.
Opposition Blames NDP Mismanagement for Downgrade
But what does that actually mean for real people—not bureaucrats, not lobbyists—but the mom on a fixed income buying groceries? So I reached out to John Rustad, leader of the Official Opposition in B.C., to ask exactly that.
“Two downgrades! Absolute disaster,” he told me. “Under David Eby, we’ve gone from a AAA status to a single A with a negative outlook. This government’s reckless spending and irresponsible management will have a devastating effect—not just today, but for generations to come.”
He’s not exaggerating. According to Rustad, by the end of this fiscal period, B.C.’s debt will have nearly tripled since the NDP took power. Let that sink in—tripled. And no, this isn’t just some abstract macroeconomic trend. This hits you. Directly.
Rustad laid it out. These downgrades mean higher borrowing costs for the province. That’s code for more taxpayer money getting funneled into interest payments instead of hospitals, schools, or—God forbid—tax relief.
“By the end of this fiscal plan, even before the downgrade and before the loss of billions in carbon tax revenue, interest payments were projected to hit $7 billion annually,” Rustad said. “That’s about 30% of personal income tax revenue—just to pay the interest.”
That’s money you send to Victoria every month—just lighting it on fire.
And with the downgrade? Expect to pay another $1 billion more in interest. That’s around $200 per person, per year. Not for roads. Not for services. Just to keep the debt monster fed.
Meanwhile, Premier David Eby—well, he’s had months to plan for replacing the carbon tax, and guess what? Still no plan. Rustad told me he expected Eby to raise industrial taxes to make up the difference, but even that hasn’t happened yet. For now, the hole is just growing—a $2 billion loss in carbon tax revenue on top of an $11 billion deficit.
So What Does This Mean for the Average Mom?
In response to a direct question about what this credit downgrade means for a mother living on a fixed income, Opposition Leader John Rustad laid out the long-term consequences in no uncertain terms:
“The average person will not notice this immediately. But what it does mean is higher borrowing costs, So with the massive deficit and debt, more money will need to be spent on interest payments. By the end of this fiscal, before loss of billions in carbon tax revenue and before the debt downgrades, interest payments would increase to about $7 billion by the end of the fiscal plan. To put that in perspective, that would be the equivalent of 30% or more of personal income taxes just to pay interest.”
He continued:
“The debt downgrades mean the province will have to pay more in interest—likely 1/4 to 1/2% more. On $220+ billion, that could mean $1 billion more in interest. That could be about $200 per man, woman and child annually in more interest by 2027.”
And with no plan to rein in spending, Rustad issued a stark warning:
“The compounding problem is: will this mean service cuts, more taxes, or yet more debt to be paid by our children?”
Final Thoughts
So here’s a question no one on CBC is going to ask: What actually happens when a progressive government can’t manage a budget? I’ll tell you. You get poorer. That’s what happens. You, the person who gets up every day and works a real job, pays the price while the people in charge keep living large off your labour.
Let’s walk through it. First, you pay provincial income tax—a tax just for working. Imagine that. You go out, earn a living, and the government takes a cut just because you dared to be productive. Then there’s the PST—you buy something, anything, and you get taxed again. Why? Because you had the audacity to participate in the economy.
And then there’s the carbon tax, the holy grail of progressive grifts. This wasn’t about saving the planet—it was about propping up the very same government that couldn’t manage a piggy bank, let alone a provincial budget. That tax was floating David Eby’s spending addiction. Now it’s gone, and surprise—there’s no plan to replace it. Just more debt, more interest, and more economic chaos.
But wait—here’s the part that really insults your intelligence. After taxing you into the ground, they turn around and say, “Don’t worry, we’ll give you a rebate.” A rebate? You mean you’re going to give me back a tiny fraction of the money you stole from me and act like you’re doing me a favour? Please. That’s not generosity—it’s gaslighting. It’s economic abuse wrapped in a government cheque.
And that’s why I keep saying it: fiscal responsibility matters. Because I’d rather have that money in my wallet, feeding my kids, paying my bills, building my future—than watching David Eby burn it on pet projects, political theatre, and bloated bureaucracy.
But here’s the thing—there is hope. It’s not all doom and despair. In the last election, something incredible happened. The BC Conservatives, a party written off by the elites and ignored by the media, pulled off a political miracle. They surged from obscurity to contention—why? Because regular people are waking up. Because the voters who pay the bills, raise the kids, and still believe in common sense are done being treated like ATMs for a government that doesn’t even pretend to respect them.
And maybe—just maybe—after a little more pain, after a little more David Eby-style financial recklessness, the voters of this province will finally realize why fiscal responsibility matters. Not because it sounds good in a press release, but because without it, your future vanishes. Your freedom shrinks. And the people in charge? They just keep spending.
So next time, when the ballots are counted and the smoke clears, maybe British Columbia will finally remember who this province belongs to—not to bureaucrats, not to activists, not to the political class in Victoria—but to you.
And that day can’t come soon enough.
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