Ottawa/CMEDIA: Included in the New laws and rules that would reportedly come into effect in Canada in 2026 are a middle-class tax cut, caps on certain bank fees and changes to citizenship eligibility requirements for “Lost Canadians” born abroad.
New citizenship rules for ‘Lost Canadians’
Aiming to undo citizenship law changes made by the federal Conservatives in 2009 that were later deemed unconstitutional by the Ontario Superior Court, The “Lost Canadians” bill expected to be effective in 2026, would facilitate at least 115,000 so-called “Lost Canadians” born outside the country to be eligible for citizenship.
Canadian parents who were born abroad to pass on citizenship to children who were also born or adopted abroad will be eligible for citizenship due to changes introduced under Bill C-3, which received royal assent in November. Such parents are required to pass a “substantial connection test” and prove they spent at least three years in Canada before their child’s birth or adoption.
New immigration cuts and caps
Significant cuts to the number of new permanent residents, international students, temporary foreign workers and refugees that will be admitted into the country are featured in Canada’s latest immigration levels plan.
Announced in November, the 2026-2028 immigration levels plan includes a new cap of 380,000 new permanent residents in 2026, which is a slight drop from the 395,000 accepted in 2025 and a major shift from 2024, when more than 483,000 were welcomed.
The number of new temporary workers is also being capped at 230,000, significantly less from the target of 367,750 in 2025. The target for refugees, protected persons and those admitted on humanitarian grounds is set at 56,200 people in 2026, which is less nearly 12,000 from an earlier target.
The largest cuts are being made to international student admissions. Canada plans to issue only 155,000 new student visas in 2026 and 150,000 in both 2027 and 2028. That’s down significantly from previous caps of 360,000 in 2024 and 437,000 in 2025.
Canada Strong Pass returns
The Canada Strong Pass returns from Dec. 12, 2025 to Jan. 15, 2026 and will be back again for the summer of 2026. Offering free and discounted tickets for national parks, museums, VIA Rail travel and more, the popular pass was launched in 2025 to encourage domestic travel amid frosty relations with the U.S.
Middle-class tax cut
A new “middle-class tax cut” goes into effect for the 2025 tax year. Announced in late June the personal income tax rate for those who make $57,375 per year or less was dropped to 14.5 percent for the 2025 tax year and 14 percent for 2026 and subsequent tax years. It previously stood at 15 percent. Nearly 22 million Canadians are expected to benefit from this measure, which will equal a maximum tax savings of $420 per person or $840 per couple.
Even if your earnings exceed the lowest tax bracket, the lower tax rate will still be applied to the first $57,375 of taxable income you earn. For example, if you make $77,375 in 2025, you will be taxed at 14.5 per cent for the first $57,375 you earn, and 20.5 per cent for the remaining $20,000.
Tax rebates for first-time home buyers
Subject to the passing of the proposed federal legislation, tax rebates for first-time home buyers could come into effect in 2026.
Rebates of the First time home buyers would eliminate GST or the federal portion of the HST for first-time home buyers of newly built or substantially renovated homes valued at up to $1 million, for a maximum rebate of $50,000.
Homes that cost between $1 million and $1.5 million would also be eligible for reduced tax rates. The Ontario government has signalled that subject to the passing of federal legislation. it will also drop the provincial portion of the HST for first-time home buyers.
Automatic tax filing
At the start of 2026 tax season, The Canada Revenue Agency will begin automatically filing taxes /for about one million low-income Canadians to help ensure they receive the federal benefits they qualify for, like the Canada Child Benefit and the GST/HST credit. The deadline to file 2026 taxes will be in April 2027. The system is expected to be updated to include approximately 5.5 million people in the 2028 tax year.
New cap on NSF fees at banks
A cap on non-sufficient funds (NSF) fees is being instituted by the federal government. As of March 12, 2026, Canadian banks will have to cap NSF fees at $10 for personal and joint accounts. Charging NSF fees for accounts that have an overdraft of less than $10 are prohibited by the Banks and they will only be allowed to charge one NSF fee per account within a two business day period. According to the federal government, NSF fees currently range from $45 to $48 and disproportionately harm low-income Canadians. The caps do not apply to corporate or business accounts.
‘Buy Canadian’ policy implemented
With an aim to ensure that federal spending prioritizes Canadian suppliers and materials in order to bolster Canadian jobs and industries, Canada’s “Buy Canadian” policy will be fully implemented by spring 2026. Launched in response to tariffs imposed by U.S. President Donald Trump, the new policy will start with Canadian steel, aluminum and softwood lumber.
Early retirement incentive for federal employees
Federal public service employees would be enabled to apply In 2026 to retire early with a pension that is based on their years of service. Meant to promote federal workforce reductions, the move is expected to be implemented on or after Jan. 15, 2026. Eligibility criteria includes that employees must be at least 50 years old and have at least 10 years of public service employment.
National School Food Program becomes permanent
Launched in 2024, the National School Food Program will become permanent thanks to a new funding commitment. A promise of $216.6 million in annual funding in the latest federal budget for the program beginning in 2029, which will build on the $1 billion commitment the federal government previously made for the program’s first five years. The National School Food Program aims to provide meals for up to 400,000 children.
