Federal Budget 2026: What It Could Mean for Your Taxes and Money

What you need to know about tax filing this year

When you’re filing your 2026 return this spring, your deadlines stay the same: April 30 for most people, and June 15 for the self-employed (although any balance owing is still due April 30). In 2028 that deadline will change to May 15.

Also, two of the proposed changes in the budget could apply to your 2026 return, and both involve medical expenses.

• People with celiac disease could claim a flat $1,000 for gluten-free food without keeping receipts.
• Some items, including insulin and CPAP machines, would no longer need a prescription to qualify for the Medical Expense Tax Credit.

Currently, you can only claim the portion of your total medical expenses that exceeds the minimum threshold (3% of your net income or $2,890 for 2026, whichever is lower).

Benefits get a boost

Some significant changes to benefit amounts were tabled in the budget to help Canadians with affordability:

• In spring 2027, eligible families would get a one-time top-up to the Canada Groceries and Essentials Benefit (formerly the GST credit).
• Starting in the 2027 tax year, the Canada Workers Benefit would become the Build Canada Workers Benefit. There would be a minimum earnings threshold at $500 (currently $3000), and the maximum benefit would rise to $1,859 for single people and $3,143 for families. (One catch: the advance payments many people get during the year would shrink to 25% of the benefit in 2027, down from 50%, and end the following year. That means more of the benefit would come when you file your return.)
• Very small benefit payments, such as a monthly Canada Child Benefit amount that is below a certain threshold, would be paid as lump sums, starting after June 2027.

More help for caregivers and medical costs with credits

The budget addresses some enhancements to credits, which may put more money back in your pocket at tax time.

• The Canada Caregiver Credit would become refundable from 2027. In plain English, that means you could get money back even if you owe little or no tax. Currently, it is a non-refundable tax credit.
• Medical costs will become simpler to file. Instead of saving every receipt, you could claim optional flat amounts: $1,000 a year for gluten-free food (2026 tax year), $500 for incontinence products, $2,000 for a service dog, and $1,000 for home accessibility renovations (2027 tax year).
• The adoption expenses tax credit would also offer an optional flat rate of $1,200 per child, also on the way for 2027.
• Volunteer firefighters and search-and-rescue volunteers would see their 2 credits merged into 1.

Simpler deductions

The budget is also creating simpler ways to deduct money for moving and looser rules for some workers.

• Starting in 2027, if you have to relocate for work, then you may be able to claim a flat $1,000 instead of tracking down moving receipts. Tradespeople who relocate for a job may be able to claim a flat $1,500 a year.
• Employed artists may be able to deduct expenses up to the amount they earn from artistic work.
• Commission employees may be able to claim travel and vehicle costs alongside their other expenses.
• People who live in the North would see the cap removed that limits the amount of the deduction based on income, and also removes claims restrictions on employer-provided travel benefits.
• Clergy members could see a flat residence deduction of $1,000 a month, up to $12,000 a year.
• Apprentice vehicle mechanics may be able to deduct the full cost of their tools.

If you own a business or invest

There’s also a proposal to rethink retirement savings by merging RRSPs and RRIFs so you wouldn’t have to convert to a different account at age 71. The government is taking feedback until Jan. 8, 2027.

If you hold property outside Canada, the threshold for reporting it on Form T1135 would double to $200,000, starting with the 2027 tax year.

For business owners:

• Entrepreneurs could get a new capital gains exemption of up to $15 million on the sale of qualifying small business shares issued from Nov. 5.
• The small-business rollover would also be extended, giving you up to 3 years after a sale to reinvest the proceeds.
• Self-employed people who pay tax in instalments would also see changes starting in 2028. The threshold for needing to make instalments would rise from $3,000 to $7,500 ($4,500 in Quebec), and some business owners could make a single payment at year-end instead of quarterly ones.