Federal Budget 2026: Important Tax and Benefit Updates for Canadians
November 9, 2026
Canada's Federal Budget 2026 includes several tax and benefit updates that could affect individuals, families, and businesses.
Some changes are already in effect, while others are proposals that may apply to the 2026 tax year or later.
Here's what Canadians need to know.
Changes Already in Effect
1. Canada Groceries and Essentials Benefit Increased by 25%
Starting in July 2026, the Canada Groceries and Essentials Benefit, previously known as the GST/HST credit, increased by 25%.
This benefit provides tax-free payments to eligible Canadians with low or modest incomes to help with everyday expenses.
The increase is expected to continue for five years, from 2026 to 2031.
What this means for Canadians:
Eligible individuals and families can receive higher benefit payments to help with the cost of living.
Proposed Tax Changes
The following measures have been announced or proposed by the government. Their implementation remains subject to legislative approval.
2. Productivity Mega Deduction: 100% Write-Off for Eligible Business Investments
The government has proposed allowing businesses to deduct 100% of the cost of certain qualifying investments in the year the assets become ready for use.
Examples may include computers, software, machinery, and business equipment.
The proposal would apply to eligible investments acquired on or after September 15, 2026.
What this means for Canadians:
Qualifying businesses could reduce their taxable income sooner when purchasing eligible equipment and technology.
A 100% tax deduction does not mean a business receives the full purchase price back as a refund.
3. Easier Medical Expense Tax Claims
Budget 2026 proposes simplifying the rules for claiming certain medical expenses.
Under the proposed changes, taxpayers would no longer need prescriptions for some eligible expenses, including:
- Insulin
- Qualifying CPAP machines
- Diabetes infusion pumps
For certain other medical equipment, confirmation of a medical condition from an authorized medical professional could replace the need for individual prescriptions.
Taxpayers would still need to keep the required receipts and meet the eligibility rules.
What this means for Canadians:
Some medical expense claims could require less paperwork when filing taxes.
These changes are proposed to apply to the 2026 tax year, with returns generally filed in 2027.
4. Optional $1,000 Gluten-Free Expense Amount
Budget 2026 proposes a simpler way for individuals with medically confirmed celiac disease to claim eligible gluten-free food expenses.
Instead of calculating the additional cost of gluten-free products, eligible taxpayers could choose a $1,000 expense amount under the Medical Expense Tax Credit.
What this means for Canadians:
Eligible individuals could save time calculating expenses and organizing receipts.
This proposal would apply to the 2026 tax year.
The $1,000 is an amount used to calculate a non-refundable tax credit. It is not a $1,000 refund or payment.
5. Additional Grocery Benefit Payment Proposed for 2027
Budget 2026 also proposes an additional one-time payment under the Canada Groceries and Essentials Benefit in early 2027.
If approved, eligible Canadians could receive:
- Up to $339 for a single individual without children.
- Up to $679 for a couple with two children.
The actual amount would depend on income and family circumstances.
What this means for Canadians:
Eligible households could receive additional financial support to help cover groceries and other essentials.
This is a proposed future payment, not an increase already being delivered.
What Should Canadians Keep in Mind?
The most important distinction is that not every Budget 2026 announcement is already law.
The 25% grocery benefit increase started in July 2026. The other measures discussed above remain proposals, even where the government intends them to apply to the 2026 tax year.
Canadians should continue following existing CRA rules until any proposed changes are officially approved.
More Tax Changes Are Coming in 2027
Federal Budget 2026 also includes several proposed changes for 2027 and beyond, including updates to tax filing deadlines, caregiver credits, workers' benefits, and other tax rules.
Stay connected with TaxTron as we explain these upcoming changes and how they could affect Canadian taxpayers.
At TaxTron, we believe tax information should be simple, clear, and easy to understand.
Stay informed. Stay prepared. File with confidence.
Disclaimer: This article is for general information. Proposed tax measures are subject to legislative approval, and eligibility rules apply.