In 2026, there will be adjustments to existing tax policies, the discontinuation of some measures, and support for personal support workers. However, the overall impact on individual taxes next year is expected to be minimal.
According to Daniel Rogozynski, an accountant and professor at the University of Waterloo, the changes affecting individuals in 2026 are rather unremarkable, describing them as lackluster. The most noticeable change for Canadians will be the reduction of the lowest marginal tax rate by one percentage point, decreasing it from 15% to 14%.
This reduction, which was part of the election promises and came into effect on July 1, 2025, will now apply to earnings up to $58,523 in 2026. Additionally, a new refundable tax credit for personal support workers has been introduced, providing a 5% credit on eligible earnings, up to a maximum of $1,100 annually.
The measure is temporary and applies from 2026 to 2030, benefiting those earning at least $22,000 per year. Personal support workers must be employed by eligible healthcare establishments to qualify for the credit, which aims to support those providing essential care services.
Furthermore, the lifetime capital gains exemption has been increased to $1.25 million for selling eligible small business shares, farm, or fishing property. This change, retroactive to June 25, 2024, aims to incentivize entrepreneurship and business ownership.
Regarding CPP contributions, the maximum ceilings have been raised for 2026, with the first ceiling set at $74,600 and the second at $85,000. Federal income tax bracket thresholds will also see a 2% increase, while the TFSA contribution limit remains unchanged at $7,000.
Overall, the adjustments to tax measures in 2026 are focused on minor changes that are unlikely to have a significant impact on individuals’ tax burdens.