[La version française suit le texte anglais.]
MAJORITY OF ONTARIO FAMILIES RECEIVE MORE IN PROVINCIAL SERVICES THAN THEY PAY IN TAXES
TORONTO, April 21, 2022 – Today, the Financial Accountability Office of Ontario (FAO) released a report that analyzes Ontario families’ contributions to provincial government revenues and the benefits they receive from provincial government spending. Using 2019-20 as a representative year, the report estimates how many families were net beneficiaries from provincial government spending and revenue collection, and how many were net contributors.
Families contribute directly to provincial government revenues through various taxes and fees, and indirectly through federal government transfers to the Province, corporate income tax and other revenue sources. Families receive benefits from the provincial government through services and direct payments, such as health care, public education and child care, social services, income and employment supports, and housing and electricity subsidies.
The FAO estimates that in 2019-20, Ontario’s 6.5 million families contributed an average of $23,426 in revenue to the Province and received an average of $24,272 in services or payments, resulting in an average net benefit of $846 per family.
The most important factor in determining the net position of each Ontario family was the family’s income. In total, 60 per cent of Ontario families (earning less than $76,296) were net beneficiaries, 20 per cent of families (earning between $76,926 and $131,473) were in a net neutral position, and 20 per cent of families (earning $131,474 or more) were net contributors.
Finally, the FAO found that the net benefit as a share of income for lower-income families was more significant than the net contribution as a share of income provided by higher-income families. Families with incomes in the bottom 20 per cent received an average net benefit equal to 294 per cent of family income, while families in the top 10 per cent had an average net contribution equal to 17 per cent of family income.
Find our full report on our website, here.
- The FAO estimates that the families with incomes in the lowest 10 per cent contributed an average of $5,169 to provincial revenue in 2019-20, largely through the Harmonized Sales Tax (HST) and service fees, while families with incomes in the top 10 per cent contributed an average of $86,142.
- The FAO estimates that families with incomes in the top 20 per cent received the highest benefits in 2019-20, averaging $28,551 to $34,512, primarily due to their larger average family sizes. Families with incomes in the lowest 10 per cent received the next highest benefits, averaging $26,561, largely from income support programs and social services.
- A web-based illustrator is available here to allow users to interact with the results from the report. The illustrator displays the distribution results for specific government services and revenue sources.
About the FAO
Under the Financial Accountability Officer Act, 2013, the Officer provides independent analysis on the state of the Province's finances, trends in the provincial economy, and related matters important to the Legislative Assembly of Ontario. Visit our website and follow us on Twitter and LinkedIn.