In the upcoming year, there will be adjustments to current tax policies, discontinuation of certain measures, and assistance for personal support workers. However, the overall impact on individual taxes in 2026 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 it as a “snoozefest,” he noted the absence of significant transformative changes that were anticipated.
The most noticeable change for Canadians is the reduction of the lowest marginal tax rate by one percentage point, dropping it from 15 per cent to 14 per cent. This adjustment, which was part of the election campaign promises, came into effect on July 1, 2025.
Additionally, there is a new refundable tax credit for personal support workers in the 2026 budget, equating to five percent of eligible earnings up to a maximum of $1,100. This credit is temporary and applicable for the tax years 2026 to 2030.
Moreover, the lifetime capital gains exemption has been increased from just over $1 million to $1.25 million for selling eligible small business shares, farm, or fishing property, retroactive to June 25, 2024.
Regarding CPP contributions, the enhanced Canada Pension Plan now has a first ceiling of $74,600 and a second ceiling of $85,000 for 2026, representing an increase from the previous year. Income tax bracket thresholds have also been adjusted upwards by two percent to align with inflation.
The maximum insurable earnings ceiling for employment insurance has risen to $68,900 in 2026, up from $65,700 in 2025. Furthermore, the annual TFSA contribution limit remains at $7,000 for the year.
In summary, while there are some modifications to tax measures and benefits for specific groups, the overall impact on individual taxpayers in 2026 is expected to be marginal.