New year, new tax measures: What to expect in 2026

The coming year will see some changes to existing tax measures, the abandonment of others  and some help for personal support workers. But overall changes to the taxes individuals pay will be minor in 2026.

Daniel Rogozynski, an accountant and professor at the University of Waterloo, says the changes impacting individuals in 2026 could best be described as "a snoozefest."

"We were waiting for months for something that was going to be; 'wow, that's a big change, that really changes, you know, the game for Canadians versus Americans and the rest of the world in terms of competitiveness," Rojozyski said.

"It just wasn't there."

He says the change Canadians are most likely to notice is the one percentage point reduction to the lowest marginal tax rate — taking it from 15 per cent to 14 per cent.

That measure was promised during the election campaign and first came into effect July 1, 2025, when taxes on the first $57,375 earned were only taxed at 14.5 per cent. (tax measures introduced in the middle of a tax year start at half the rate and then bump up to the full cut the following year).

Each year tax brackets increase to account for inflation, which means that beginning Jan. 1 the rate drops to 14 per cent on the first $58,523 someone earns in 2026. 

When the measure was rolled out, Finance Canada projected maximum tax savings of $840 per couple with two incomes. In June Yves Giroux, the previous parliamentary budget officer, said a two-income couple with a child would only get about $750 in average savings in 2026.

The budget also implements a new refundable tax credit for personal support workers worth five per cent of eligible earnings to a maximum of $1,100, which means anyone earning at least $22,000 annually qualifies for the full amount.

The credit is temporary and, for now at least, will only be available for the 2026 to 2030 tax years. 

To be eligible for the credit, a personal support worker has to be employed by an eligible health-care establishment, which the budget defines as: "hospitals, nursing care facilities, residential care facilities, community care facilities for the elderly, home health-care establishments and other similar regulated health-care establishments."

To qualify as a personal support worker, the budget says the individual must provide one-on-one care in order to "maintain another individual’s health, well-being, safety, autonomy and comfort."

The credit does not apply to people in British Columbia, Newfoundland and Labrador and the Northwest Territories because those provinces have deals with the federal government to increase wages for those workers.

Over the past two years there have been proposals to change capital gains inclusion rates and exemptions in a way that created confusion over what did and did not apply, but those measures were cleared up and simplified in the 2025 federal budget.