Budget 2026 tax changes: what actually matters for Canadians

Last updated Nov 10, 2026. Figures below were checked against the federal Budget 2026 tax measures and the CRA's What's new for 2025 page.

The federal budget landed on November 5, 2026. It did not propose new personal income tax rates. A lot of the useful changes are about deadlines, paperwork, and a few credits and benefits. Some are already in effect. Many are still proposals, which means they are not law yet.

This is general information, not tax advice. If a proposal doesn't pass, the current rules can still apply, so confirm the latest terms with the CRA or a qualified advisor before you act.

Want to see how the current rates show up on a return? Try the simple income tax calculator or the more detailed Canadian income tax calculator.

Already in effect: the 14% lowest tax rate

This one is not from Budget 2026. It started earlier, and it is what many people will notice first when they file.

Starting July 1, 2025, the lowest federal personal tax rate was reduced from 15% to 14%. Because that cut arrived halfway through the year, the 2025 return uses a blended lowest rate of 14.5%. From 2026, the lowest federal rate is 14% for the full year.

Most non-refundable tax credits still use the same rate as the lowest bracket. To keep a 15% rate on certain credits claimed on amounts over the first bracket threshold, a top-up tax credit was introduced for 2025. On the return, that is line 34990. The 2025 threshold for this was $57,375.

The federal fuel charge also ended on April 1, 2025. The related farmers' tax credit for the 2024-2025 fuel charge year is the last one available.

One filing deadline: May 15, starting with 2027 returns

Today, most people file by April 30, while self-employed people and their spouses or common-law partners generally have until June 15 (with a different date for any balance owing).

Budget 2026 proposes one date for everyone: May 15 would become both the filing deadline and the balance-due date for all individuals, including the self-employed. This would apply to the 2027 and later tax years, so it would not change the return you file in spring 2027 for the 2026 year.

If this becomes law, it simplifies the calendar. It also means some self-employed filers would have less time than they do now, and anyone who usually files in April would have a little more.

The budget also proposes a clearer window to object to an assessment: the later of one year after the notice of assessment is sent, and two years from that year's filing due date. You would no longer apply for an extension of time to object.

RRSP for life: no conversion at 71, but it's only a consultation

This is the change that will get the most attention, and it is not a done deal.

The government says it wants to merge the core RRSP and RRIF rules into an "RRSP for life." That would remove the need to convert an RRSP to a RRIF at age 71. Minimum withdrawals after 71 would still be required. The idea is also to look at letting a surviving spouse or common-law partner become a successor holder, and to simplify tax-free transfers after death.

Finance Canada is asking for comments by January 8, 2027. Until the rules are actually passed, the current conversion requirement still applies. Don't rush a conversion, or delay one, just because of a consultation. For how the current rules work, see Turning an RRSP into a RRIF.

Higher instalment and T1135 thresholds

If you usually pay tax in instalments, or you file a foreign property form, two proposed changes may cut the paperwork.

Instalments. The budget proposes raising the instalment threshold from $3,000 to $7,500 for people living outside Quebec, and from $1,800 to $4,500 for residents of Quebec. The new thresholds would be indexed to inflation and rounded to the nearest $500. This would apply to tax years beginning on or after January 1, 2028. As now, you would only have to pay instalments if you go over the threshold in the current year and in one of the two previous years.

If your main income is from a business, including professional or commission income, the budget also proposes a single instalment for 2028 and later years: two-thirds of your combined federal-provincial tax owing, due by December 31, with the rest due on the balance-due date. That is similar to the treatment farming and fishing income already gets.

Form T1135. Canadian residents generally have to file this form if they hold specified foreign property with a total cost above a set amount. The budget proposes raising that filing threshold from $100,000 to $200,000, and raising the simplified reporting threshold from less than $250,000 to less than $500,000. These changes would apply to tax years or fiscal periods that end after 2026.

Caregiver credit and the 2027 groceries supplement

Two proposed measures would put more cash in some people's hands.

Canada Caregiver Credit. This credit is currently non-refundable, which means it only helps if you owe tax. Budget 2026 proposes to make it refundable starting in the 2027 tax year, so eligible caregivers could receive the full amount even if they have little or no tax to pay. The design otherwise stays the same. For 2027, the budget lists maximum credit amounts of $9,001 (tax relief of up to $1,260) for many infirm adult dependants, and $2,812 (tax relief of up to $394) for an infirm spouse, an eligible dependant, or an infirm child under 18. The adult amounts are reduced by the dependant's net income above $21,136 in 2027. There is no income test for an infirm child under 18.

Groceries and Essentials supplement. The Canada Groceries and Essentials Benefit, formerly the GST credit, is a non-taxable, income-tested payment. For the July 2026 to June 2027 benefit year, the maximum annual amounts are $445 per adult, $234 per child, and $234 for the single supplement, paid in quarterly instalments. Budget 2026 proposes a one-time supplement in early 2027 equal to half of those maximums: $223 per adult, $117 per child, and $117 for the single supplement, at the maximum.

What to do now, and what can wait

• For your 2025 and 2026 returns: use the new lowest federal rate, and look for the top-up credit on the 2025 return if it applies. The May 15 deadline and the instalment changes do not apply yet.
• Before December 31, 2026: the usual year-end moves still matter, such as donations, tax-loss selling, and FHSA contributions. See our 2026 year-end tax checklist.
• On the RRSP-for-life idea: you can send comments to Finance Canada by January 8, 2027. Don't change a conversion plan only because of the consultation.
• If you care for someone, or you get the groceries benefit: keep your CRA information up to date, and watch for the 2027 changes if they become law.
• If you have foreign property or pay instalments: the higher thresholds are proposed for later years. Keep filing under the current rules until they actually change.

A later Finance Coach series will look at the business-owner measures, including Canadian-controlled private corporations and the proposed Canada Growth Incentive.

Sources and a last word

The rate cut and top-up credit come from the CRA's What's new for 2025 page. The Budget 2026 items come from the government's tax measures supplementary information.

This article is for educational purposes only. It is not tax, financial or legal advice. Budget proposals can change or be delayed, and some may not become law. Confirm current rules with the CRA or a qualified advisor before you make a decision.