As a Canadian, do you ever feel like the government is taking a disproportionately large slice of your financial pie? If so, you’re not alone. Canada consistently ranks as one of the countries with the highest tax burdens globally. For many, the frustration comes from seeing their hard-earned wealth redistributed through taxes, leaving less for themselves and their families.

Canadians and Taxes: How Do We Compare?

Let’s start with some perspective. According to OECD data, Canada’s overall tax burden—measured as the total taxes collected as a percentage of GDP—is higher than the average of OECD countries. In 2021, Canada ranked in the top third for personal income tax rates among industrialized nations, with some Canadians paying over 50% of their income when combining federal and provincial taxes.

But taxes aren’t just about income. Sales taxes, property taxes, and corporate taxes all add to the load, making the total tax burden feel overwhelming. When you add it all up, it’s clear why many Canadians feel like they’re handing over far too much of their pie.

The Wealth Pie: A Simple Analogy

Think of your wealth as a pie. It’s made up of your income, investments, savings, and everything you’ve worked hard to build. Each slice represents and contributes to your financial commitments—such as housing, retirement income, health related costs and, of course, taxes.

For most Canadians, the government’s slice is one of the largest. While taxes fund essential services like healthcare, infrastructure, and education, many of us feel the size of that slice could be reduced without compromising these benefits. The question is, how can you keep more of your pie for the things that matter most to you?

The Role of a Financial Planner: Helping You Keep More of Your Pie

This is where financial planning comes in. As a financial planner, my role is to help you design a strategy to minimize your tax burden and maximize your wealth. Here’s how we can accomplish that:

1. Strategic Tax Planning: By understanding tax credits, deductions, marginal tax brackets and registered savings plans like RRSPs and TFSAs, we can optimize your financial strategy to reduce taxable income.
2. Smart Investment Choices: Certain investments offer tax advantages. For instance, capital gains are taxed at a lower rate than income, and dividends from Canadian companies come with tax credits.
3. Income Splitting: Families can often reduce taxes by redistributing income among family members, taking advantage of lower tax brackets.
4. Estate and Legacy Planning: Proper estate planning can ensure that more of your wealth is passed to your heirs rather than being eaten up by taxes.
5. Business Structuring: If you’re self-employed or a business owner, incorporating or leveraging business tax rules can significantly reduce your tax liability.

Rebalancing the Pie

By taking a proactive approach to financial planning, you can shift the distribution of your financial pie. Instead of the government taking the biggest slice, you may have the opportunity to reallocate more towards you and your family’s priorities—providing additional retirement income potential or leaving more for your loved ones or charity through your estate.  Don’t let your legacy be one marked by paying more than your fair share of taxes – consider shifting the distribution back to the priorities that matter most to you.

Let’s Work Together to Keep Your Pie Intact

Reducing your tax burden doesn’t mean shirking responsibility—it means being smart about how you allocate your resources. With the right guidance, you can make sure the pie you’ve worked so hard to bake serves you and your loved ones, not just the government.

If you’re ready to take control of your financial pie, let’s talk. Together, we can create a strategy to help you keep more of what’s yours while still contributing to the services that make Canada a great country to live in.