Making Life More Affordable for Canadians Act (S.C. 2026, c. 2)

RECOMMENDATION

Her Excellency the Governor General recommends to the House of Commons the appropriation of public revenue under the circumstances, in the manner and for the purposes set out in a measure entitled “An Act respecting certain affordability measures for Canadians and another measure”.

Short Title

Marginal note:Short title

1 This Act may be cited as the Making Life More Affordable for Canadians Act.

PART 1R.S., c. 1 (5th Supp.)Income Tax Act

• 2 (1) Subsection 117(2) of the Income Tax Act is replaced by the following:

  • Marginal note:Rates for taxation years after 2024

    (2) The tax payable under this Part by an individual on the individual’s taxable income or taxable income earned in Canada, as the case may be (in this Subdivision referred to as the “amount taxable”) for a taxation year is

    • (a) 14.5% of the amount taxable, if the amount taxable is equal to or less than the amount determined for the taxation year in respect of $57,375;

    • (b) if the amount taxable is greater than $57,375, but is equal to or less than $114,750, the maximum amount determinable in respect of the taxation year under paragraph (a), plus 20.5% of the amount by which the amount taxable exceeds $57,375 for the year;

    • (c) if the amount taxable is greater than $114,750, but is equal to or less than $177,882, the maximum amount determinable in respect of the taxation year under paragraph (b), plus 26% of the amount by which the amount taxable exceeds $114,750 for the year;

    • (d) if the amount taxable is greater than $177,882, but is equal to or less than $253,414, the maximum amount determinable in respect of the taxation year under paragraph (c), plus 29% of the amount by which the amount taxable exceeds $177,882 for the year; and

    • (e) if the amount taxable is greater than $253,414, the maximum amount determinable in respect of the taxation year under paragraph (d), plus 33% of the amount by which the amount taxable exceeds $253,414 for the year.

• (2) Paragraph 117(2)(a) of the Act, as enacted by subsection (1), is amended by replacing “14.5%” with “14%”.

• (3) Subsection (1) applies to the 2025 and subsequent taxation years.

• (4) Subsection (2) applies to the 2026 and subsequent taxation years.

Marginal note:Report

• 2.1 (1) The Minister of Finance must prepare a report that outlines the impact of reducing the personal income tax rate provided in paragraph 117(2)(a) of the Income Tax Act on all tax credits that are calculated using the appropriate percentage as defined in that Act.

• Marginal note:Tabling

  (2) The Minister of Finance must cause the report to be tabled in each House of Parliament within 90 days after the day on which this section comes into force or, if the House is not then sitting, on any of the first 15 days of the next sitting of the House.

• Marginal note:Publication

  (3) The Minister of Finance must publish the report on the website of the Department of Finance within 10 days after the day on which the report is tabled in both Houses of Parliament.

PART 2Amendments to the Excise Tax Act and Related Regulations

R.S., c. E-15Excise Tax Act

• 3 (1) Subsection 123(1) of the Excise Tax Act is amended by adding the following in alphabetical order:

  first-time home buyer

  first-time home buyer, at a particular time, means a particular individual in respect of whom the following conditions are met:

  • (a) the particular individual is 18 years of age or older at the particular time,

  • (b) the particular individual is, at the particular time, a Canadian citizen or permanent resident within the meaning of subsection 2(1) of the Immigration and Refugee Protection Act,

  • (c) at no time in the period that begins at the beginning of the fourth preceding calendar year that ended before the particular time and that ends on the day before the day that includes the particular time did the particular individual occupy a residential unit situated in or outside Canada as their primary place of residence while being an owner of

    • (i) the residential complex in which the residential unit is located,

    • (ii) the building, or a part of the building, in which the residential unit is located,

    • (iii) in the case of a residential unit situated in Canada, a share of the capital stock of a cooperative housing corporation which entitles the particular individual to possess the residential unit, or

    • (iv) in the case of a residential unit situated outside Canada, a share of the capital stock of, or an interest in, an entity that is similar to a cooperative housing corporation, which share or interest entitles the particular individual to possess the residential unit, and

  • (d) if another individual is a spouse or common-law partner of the particular individual at the particular time, at no time in the period referred to in paragraph (c) did the particular individual occupy a residential unit situated in or outside Canada as their primary place of residence while the other individual is an owner of

    • (i) the residential complex in which the residential unit is located,

    • (ii) the building, or a part of the building, in which the residential unit is located,

    • (iii) in the case of a residential unit situated in Canada, a share of the capital stock of a cooperative housing corporation which entitles the other individual to possess the residential unit, or

    • (iv) in the case of a residential unit situated outside Canada, a share of the capital stock of, or an interest in, an entity that is similar to a cooperative housing corporation, which share or interest entitles the other individual to possess the residential unit; (acheteur d’une première habitation)

• (2) Subsection (1) is deemed to have come into force on March 20, 2025.

• 4 (1) Subsections 254(2.01) to (2.1) of the Act are replaced by the following:

  • Marginal note:Additional new housing rebate — first-time home buyer

    (2.1) If

    • (a) a particular individual is entitled to claim a rebate under subsection (2) in respect of a residential complex that is a single unit residential complex or a residential condominium unit or would be so entitled if the references in paragraphs (2)(c) and (i) to “$450,000” were read as “$1,500,000”,

    • (b) the agreement of purchase and sale referred to in paragraph (2)(b) is entered into after March 19, 2025 and before 2031,

    • (c) the construction or substantial renovation of the residential complex begins before 2031 and is substantially completed before 2036,

    • (d) ownership of the residential complex is transferred to the particular individual before 2036, and

    • (e) the particular individual

      • (i) at the time the particular individual becomes liable or assumes liability under the agreement of purchase and sale, is acquiring the residential complex for use as their primary place of residence,

      • (ii) is the first individual to occupy the residential complex as a place of residence after the construction or substantial renovation of the residential complex is substantially completed, and

      • (iii) is a first-time home buyer at the particular time at which ownership of the residential complex is transferred to the particular individual,

    the Minister shall, subject to subsection (3), pay a rebate to the particular individual, in addition to the rebate, if any, payable under subsection (2) to the particular individual, equal to

    • (f) if the total consideration, within the meaning of paragraph (2)(c), in respect of the residential complex is not more than $1,000,000, the amount determined by the formula

      A − B

      where

      A

      is the lesser of $50,000 and the total tax paid by the particular individual, within the meaning of paragraph (2)(d), in respect of the residential complex, and

      B

      is the amount of the rebate, if any, under subsection (2) that the particular individual is entitled to claim in respect of the residential complex, and

    • (g) if the total consideration, within the meaning of paragraph (2)(c), in respect of the residential complex is more than $1,000,000 but less than $1,500,000, the amount determined by the formula

      C × [($1,500,000 − D) ÷ $500,000]

      where

      C

      is the lesser of $50,000 and the total tax paid by the particular individual, within the meaning of paragraph (2)(d), in respect of the residential complex, and

      D

      is the total consideration.

• (2) Subsection (1) is deemed to have come into force on March 20, 2025.

• 5 (1) Subsections 254.1(2.01) to (2.1) of the Act are replaced by the following:

  • Marginal note:Additional building-only rebate — first-time home buyer

    (2.1) If

    • (a) a particular individual is entitled to claim a rebate under subsection (2) in respect of a residential complex or would be so entitled if the references in paragraphs (2)(c) and (i) to “$472,500” were read as “$1,575,000”,

    • (b) the agreement referred to in paragraph (2)(a) is entered into after March 19, 2025 and before 2031,

    • (c) the construction or substantial renovation of the residential complex begins before 2031 and is substantially completed before 2036,

    • (d) possession of the residential complex is transferred to the particular individual before 2036, and

    • (e) the particular individual

      • (i) at the time the particular individual becomes liable or assumes liability under the agreement, is acquiring the residential complex for use as their primary place of residence,

      • (ii) is the first individual to occupy the residential complex as a place of residence after the construction or substantial renovation of the residential complex is substantially completed, and

      • (iii) is a first-time home buyer at the particular time at which possession of the residential complex is transferred to the particular individual,

    the Minister shall, subject to subsection (3), pay a rebate to the particular individual, in addition to the rebate, if any, payable under subsection (2) to the particular individual, equal to

    • (f) if the fair market value of the residential complex referred to in paragraph (2)(c) is not more than $1,050,000, the amount determined by the formula

      A − B

      where

      A

      is the lesser of $50,000 and 4.77% of the total consideration, within the meaning of paragraph (2)(h), in respect of the residential complex, and

      B

      is the amount of the rebate, if any, under subsection (2) that the particular individual is entitled to claim in respect of the residential complex, and

    • (g) if the fair market value of the residential complex referred to in paragraph (2)(c) is more than $1,050,000 but less than $1,575,000, the amount determined by the formula

      C × [($1,575,000 − D) ÷ $525,000]

      where

      C

      is the lesser of $50,000 and 4.77% of the total consideration, within the meaning of paragraph (2)(h), in respect of the residential complex, and

      D

      is the fair market value.

• (2) Subsection (1) is deemed to have come into force on March 20, 2025.

• 6 (1) Subsections 255(2.01) to (2.1) of the Act are replaced by the following:

  • Marginal note:Additional cooperative housing rebate — first-time home buyer

    (2.1) If

    • (a) a particular individual is entitled to claim a rebate under subsection (2) in respect of a share of the capital stock of a cooperative housing corporation that entitles the particular individual to the possession of a residential unit in a residential complex or the particular individual would be entitled to claim a rebate under subsection (2) in respect of such a share if the references in paragraphs (2)(d) and (h) to “$472,500” were read as “$1,575,000”,

    • (b) the agreement of purchase and sale referred to in paragraph (2)(c) is entered into after March 19, 2025 and before 2031,

    • (c) the construction or substantial renovation of the residential complex begins before 2031 and is substantially completed before 2036,

    • (d) ownership of the share is transferred to the particular individual before 2036, and

    • (e) the particular individual

      • (i) at the time the particular individual becomes liable or assumes liability under the agreement of purchase and sale, is acquiring the share for the purpose of using the residential unit as their primary place of residence,

      • (ii) is the first individual to occupy the residential unit as a place of residence after possession of the residential unit is transferred to the particular individual, and

      • (iii) is a first-time home buyer at the particular time at which ownership of the share is transferred to the particular individual,

    the Minister shall, subject to subsection (3), pay a rebate to the particular individual, in addition to the rebate, if any, payable under subsection (2) to the particular individual, equal to

    • (f) if the total consideration within the meaning of paragraph (2)(d), in respect of the share and any interest in the cooperative housing corporation or the residential complex, is not more than $1,050,000, the amount determined by the formula

      A − B

      where

      A

      is the lesser of $50,000 and 4.77% of the total consideration, and

      B

      is the amount of the rebate, if any, under subsection (2) that the particular individual is entitled to claim in respect of the share, and

    • (g) if the total consideration within the meaning of paragraph (2)(d), in respect of the share and any interest in the cooperative housing corporation or the residential complex, is more than $1,050,000 but less than $1,575,000, the amount determined by the formula

      C × [($1,575,000 − D) ÷ $525,000]

      where

      C

      is the lesser of $50,000 and 4.77% of the total consideration, and

      D

      is the total consideration.

• (2) Subsection (1) is deemed to have come into force on March 20, 2025.

• 7 (1) Subsections 256(2.01) to (2.1) of the Act are replaced by the following:

  • Marginal note:Additional owner-built home rebate — first-time home buyer

    (2.1) If

    • (a) a particular individual is entitled to claim a rebate under subsection (2) in respect of a residential complex that is a single unit residential complex or a residential condominium unit or would be so entitled if the references in that subsection to “$450,000” were read as “$1,500,000”,

    • (b) the construction or substantial renovation of the residential complex begins after March 19, 2025 and before 2031 and is substantially completed before 2036, and

    • (c) the particular individual

      • (i) is the individual for whom the residential complex is being constructed or substantially renovated for use as their primary place of residence,

      • (ii) is the first individual to occupy the residential complex as a place of residence after the construction or substantial renovation of the residential complex is begun,

      • (iii) first occupies the residential complex as a place of residence before 2036, and

      • (iv) is a first-time home buyer at the particular time that is the earlier of the time at which the residential complex is first occupied by the particular individual as a place of residence and the time at which the construction or substantial renovation of the residential complex is substantially completed,

    the Minister shall, subject to subsection (3), pay a rebate to the particular individual, in addition to the rebate, if any, payable under subsection (2) to the particular individual, equal to the amount determined by the formula

    A × [($1,500,000 − B) ÷ $500,000] − C

    where

    A

    is the lesser of $50,000 and the total tax paid by the particular individual, within the meaning of paragraph (2)(c), in respect of the residential complex before

    • (i) if the fair market value of the residential complex referred to in paragraph (2)(b) is less than $450,000, an application for the rebate under subsection (2) in respect of the residential complex is filed with the Minister in accordance with subsection (3), and

    • (ii) in any other case, an application for the rebate under this subsection in respect of the residential complex is filed with the Minister in accordance with subsection (3),

    B

    is the greater of $1,000,000 and the fair market value of the residential complex referred to in paragraph (2)(b), and

    C

    is the amount of the rebate, if any, under subsection (2) that the particular individual is entitled to claim in respect of the residential complex.

  • Marginal note:Homes occupied before substantial completion

    (2.11) If an individual acquires an improvement in respect of a residential complex that the individual is constructing or substantially renovating and tax in respect of the improvement becomes payable by the individual more than two years after the day the residential complex is first occupied as described in subparagraph (2)(d)(i) or (2.1)(c)(ii), as applicable, that tax shall not be included in determining the total tax paid by the individual within the meaning of paragraph (2)(c).

• (2) Paragraphs 256(2.2)(a) and (b) of the Act are replaced by the following:

  • (a) a particular individual purchases or imports a mobile home or floating home that has never been used or occupied by any individual as a place of residence or lodging and does not file with the Minister, or submit to the supplier, an application for a rebate in respect of the home under any of subsections 254(2) and (2.1) and 254.1(2) and (2.1),

  • (b) the particular individual is acquiring or importing the mobile home or floating home for use as the primary place of residence of the particular individual or of a relation of the particular individual, and

• (3) Subsections (1) and (2) are deemed to have come into force on March 20, 2025.