Tax Developments for 2026

Each tax season comes with its lot of tax changes. There was no major upheaval for the 2026 tax season, but certain measures could have a tangible impact on your income tax returns. Below is an easily understandable recap of the applicable changes on a federal and provincial level.

Federal tax changes

Lower rate for the first taxable income bracket 

• The lowest federal personal income tax rate is 14%. 

• This applies to income of up to $58,523. 

• In 2026, taxpayers will benefit from this rate cut for the full year for the first time. 

Tangible impact: Most Canadians will pay slightly less federal taxes. 

Enhanced basic personal amount 

• The federal basic personal amount (non-taxable income) has been increased to $16,452. 

• This amount is gradually reduced for taxpayers with high incomes. 

Tangible impact: for most individuals, this translates to a slightly lower tax bill. 

Indexing of income tax brackets 

• The federal tax brackets have been indexed to inflation. 

Tangible impact: You can earn a little more before being taxed at a higher rate. 

RRSP and Canada Pension Plan (CPP) 

• RRSP: The maximum contribution for 2025 (2026 income tax returns) is $33,810. 

• CPP: The maximum pensionable earnings ceiling has increased. 

Tangible impact: Contributions may be slightly higher, but future benefits will be enhanced. 

Capital gains 

• The inclusion rate remains unchanged at 50%. 

• No rate increase for individuals. 

Tangible impact: Good news for investors and property owners. 

Federal tax credits and benefits 

Abolition of the digital news subscription tax credit. 

New temporary refundable tax credit for certain healthcare sector workers (eligible personal support workers in particular):  

• of up to $1,100; 

• applicable for five taxation years, from 2025 to 2030. 

Canada Disability Benefit:  

• In effect since July 2025; 

• Offers financial support to individuals with disabilities aged 18 to 64;  

• The first payments were made in July 2025 and eligible individuals can receive up to $2,400 per year. 

New Canada Groceries and Essentials Benefit:  

• The federal government enhanced the existing GST/HST credit and renamed it as the Canada Groceries and Essentials Benefit. 

This benefit: 

• provides a one-time payment equivalent to 50% of the yearly value of the credit (no later than June 2026);  

• subsequently increases quarterly payments by 25% over five years as of July 2026.  

Please note that: 

This benefit is based on the same eligibility criteria as the GST/HST credit and eligible recipients will receive automatic payments. 

Provincial tax changes

Indexing of the Quebec tax system 

• Income tax brackets are indexed. 

• The basic personal amount is now set at $18,571. 

Foreign property reporting 

• Requirement to report foreign property held outside Canada where the total value exceeds CAN$100,000. 

• A new form TP1079.8.BE – Foreign Property Return must be filed. 

Tax Credit for Career Extension 

• The eligibility age (on December 31 of a given year) has increased from 60 to 65. 

Deduction for foreign specialists 

• As of March 25, 2025, new rules apply to the deduction for foreign researchers, experts and specialists. These new rules do not apply to individuals who already hold a certificate issued before March 25, 2025. Please note that certificates issued before this date are not affected. 

Elimination of certain tax credits 

As of 2026: 

• The tax shield will be abolished; 

• The political contribution tax credit will be eliminated. 

Tangible impact: These changes may impact certain individuals with modest incomes and those who benefit from these credits. 

Any questions?  

Contact us by dialling 1-844-200-IMPO (4676). Our team of professionals is here to help you claim the tax credits and deductions that you might be entitled to and offer peace of mind. 

Making your tax season easy is our priority!