Updated Checked by the Tax-Services.ca editorial team How we check
Tax news in Canada worth trusting comes from Department of Finance announcements, laws that receive royal assent and CRA pages that explain how the rules are applied. In 2026 the biggest enacted changes were two laws: one cut the lowest federal tax rate to 14%, and the other ended the underused housing tax. Budget 2026, tabled on November 5, adds proposals only.
What changed in Canadian tax law this year?
The Making Life More Affordable for Canadians Act (Bill C-4) received royal assent on 12 March 2026, according to Finance Canada. It lowers the first federal income tax rate from 15% to 14%, effective 1 July 2025, and Finance says that saves up to $420 per person. It also removes the federal consumer fuel charge for good and adds GST relief on new homes for first-time buyers.
The Budget 2025 Implementation Act (Bill C-15) received royal assent on 26 March 2026, per the CRA. It ended the underused housing tax for 2025 and later years. Returns for 2022 to 2024 still stand.
| Measure | Status on the official page |
|---|---|
| First federal rate 14% | In law, effective 1 July 2025 |
| Consumer fuel charge | Permanently removed by the same law |
| GST on new homes, first-time buyers | Eliminated up to $1 million, reduced from $1 million to $1.5 million, for agreements from 20 March 2025 through 2030 |
| Underused housing tax | No return or tax for 2025 and later; 2022 to 2024 still apply |
What does the lower first rate mean in dollars?
The math is short. The first bracket in our 2026 data runs to $58,523. One percentage point on that slice is $585.23. But the basic personal amount credit also drops, by 1% of $16,452, or $164.52. Net, that’s about $420.71 a year for someone earning over the top of that bracket, which lines up with Finance’s “up to $420”.
Lower earners save less, because the one-point cut only applies to the income they actually have in that bracket. To see what it does to your own year, run your numbers through the income tax calculator, then check the take-home pay calculator for the effect on a paycheque. Because the cut started part-way through 2025, that year’s return used a blend of the old and new rate. For 2026 the lower rate applies all year.
What did Budget 2026 propose?
The federal budget was tabled on November 5, 2026, so everything in it is a proposal until Parliament passes it. These are the personal tax items we confirmed on budget.canada.ca, and our full summary is on Budget 2026: what it means for your taxes.
- A one-time 2027 Canada Groceries and Essentials Benefit supplement in early 2027, equal to a 50% increase in the 2026-27 benefit (CGEB supplement).
- A Build Canada Workers Benefit from the 2027 tax year, with an earnings floor of $500 and maximums of $1,859 for a single person without children and $3,143 for families.
- May 15 as the T1 filing and balance-due date for all individuals from the 2027 tax year (May 15 filing deadline).
- A higher T1135 foreign property threshold, from $100,000 to $200,000, for tax years ending after 2026.
- Fuel excise relief that runs in full from April 20, 2026 to January 31, 2027, then at 50% to March 31, 2027 (fuel excise relief).
None of this changes your 2026 return, which keeps the current dates and rules. To see the 2026 numbers next to what is confirmed for 2027, use Canadian tax numbers: 2026 vs 2027.
Which tax news should you not trust yet?
Anything about the capital gains inclusion rate needs care. The proposed rise to two-thirds was cancelled by the Prime Minister’s release of 21 March 2025. The inclusion rate is 50% for 2026, same as 2025, but confirm it on the CRA site before you sell anything big. The capital gains tax calculator uses 50%.
Also be wary of a headline that says “proposed”. A budget promise is not law until Parliament passes it. Bill C-15 was still described as not having received royal assent while it was before Parliament, then changed status in March.
Where should you check for updates?
Start with the Department of Finance’s tax policy page, which lists recent tax initiatives, legislation and reports. The CRA’s news pages carry announcements and have an RSS feed, so you can follow them without visiting daily.
A rule for reading any of it: look at the date, then at whether it says “proposed” or “royal assent”. If a site doesn’t show either, go to canada.ca and find the source yourself. Do the same for a provincial change, since provinces publish on their own sites.
Does a change apply to the return you’re about to file?
That depends on the effective date, not the date of the headline. A rule effective 1 January 2026 shows up on the return you file in spring 2027. One effective mid-year is usually blended. If you’re unsure, find the sentence that begins “effective” or “for tax years”, because that’s the one that matters. Someone filing a 2025 return in a quiet week in October, for example, needs the 2025 rules, even if the news today is about 2027.
When a change touches your refund, the tax refund calculator is a quick way to test it, and the result is a ballpark, not a promise.
The sources behind this page
The March 12, 2026 law and its measures come from a Department of Finance Canada news release, and the underused housing tax dates come from CRA notices. The Budget 2026 items come from the budget in brief and the tax measures, read in November 2026. The rate and bracket figures in the example come from the CRA 2026 rates page, checked in November 2026. Provincial changes are not listed. This is an independent guide, separate from any government body.
Frequently asked questions
What was the biggest Canadian tax law change of 2026?
Bill C-4, the Making Life More Affordable for Canadians Act, received royal assent on March 12, 2026. It cuts the first federal income tax rate from 15% to 14%, effective July 1, 2025, removes the consumer fuel charge and adds GST relief on new homes for first-time buyers. Bill C-15 followed on March 26, 2026 and ended the underused housing tax.
How much does the lower first rate save?
Finance Canada says up to $420 per person. Our own arithmetic on 2026 data gives about $420.71 for someone above the first bracket: one point on the $58,523 slice is $585.23, less $164.52 because the basic personal amount credit also falls. Lower earners save less, because they have less income in that bracket.
Do I still file an underused housing tax return?
Not for 2025 or later, according to the CRA, because the tax ended with Bill C-15. Returns for 2022 to 2024 still stand and still apply, so a missed older return is still a live issue. If you owed a return for one of those years, check the CRA page for the current rules on late filing.
Is the capital gains inclusion rate going up?
No. The proposed rise to two-thirds was cancelled by the Prime Minister's release of March 21, 2025, and the rate stays at 50% for 2026. We could not find one CRA page that states 50% for 2026 in a single line, so confirm it on the CRA capital gains page before a big sale.
What did Budget 2026 change for 2027?
Nothing is law yet. Budget 2026, tabled on November 5, 2026, proposes a May 15 filing date from the 2027 tax year, a Build Canada Workers Benefit, a one-time benefit supplement in early 2027 and a higher T1135 threshold. A budget promise is not law until Parliament passes it, so check the status on the official page.
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