2026 will be bringing tax increases for the average tax payer.

By Tommy Osborne

Taxes

2026 to bring tax increases, what you need to know

Dec 30, 2025 | 10:45 AM

PRINCE GEORGE – 2026 is just days away, and as many of us prepare new years resolutions and plan for a new year ahead, the Canadian Taxpayers Federation says we’ll have to brace ourselves for several changes in 2026.

“Ottawa is cutting the lowest income tax bracket: that’s going to save taxpayers money. According to the Parliamentary Budget Officer, it’ll save most families about $190 in 2026. That’s good, that means more money in your pocket from every paycheck,” said Carson Binda, the B.C. Director for the Canadian Taxpayers Federation.

“At the same time, Prime Minister Mark Carney is hiking payroll taxes, Employment Insurance and the Canada Pension Plan. When you look at these payroll tax hikes next to this income tax cut, your average taxpayer is going to be out about $72 on net. So that’s the bad news for taxpayers, you’re still going to be taking home less money because Ottawa is going to be skimming more off your paycheck every month,” he continued.

That impact will be felt by taxpayers in their immediate circle, and Binda notes many will also notice a 2% Federal Alcohol Tax increase, an increase that the alcohol industry estimates will cost Canadians $41 million next year.

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“It’s important to remember that taxes already account for about half the cost of an alcoholic beverage. That means every time you buy a round of beers with the boys, or crack a bottle of Syrah with your better half, you’re already buying one for the taxman,” Binda said.

While these changes will be noticed by most average taxpayers, Binda notes there are several noteworthy items that will impact corporations and businesses, which will then go on to impact the average Canadian. Among these is the industrial carbon tax, which he says increases the cost of gasoline by 18 cents a litre in B.C.

“Mark Carney made the right decision by cutting the federal consumer carbon tax. B.C. followed suit and cut our provincial consumer carbon tax too. But that’s a job half done when businesses and job creators are still being hammered with this back-end industrial carbon tax on business. We know that Canadian businesses are already being hammered with a whole lot of taxes, whether it’s tariffs, business taxes, sales taxes, the last thing they need is higher taxes through this industrial carbon tax,” Binda said.

“It makes business in B.C. more uncompetitive, and that’s a huge problem. We’ve already seen the result of mill closure after mill closure after mill closure in small towns across our province. Shackling businesses with higher industrial carbon taxes is only going to compound those problems,” he continued.

Binda believes costs on the average taxpayer could be alleviated if the government cuts taxes on businesses, as he believes less costs on a business will directly translate to more money in your pocket.

“We know families are struggling. We know this holiday season saw food banks hitting record breaking demand, and we know that B.C. businesses are closing and struggling because of the bad business environment right now. The best thing government can do is put more money in your pockets through tax cuts, and support our businesses by making life life less expensive for them. The only way a government can do that is by cutting taxes,” he said.

Other changes to your taxes includes the provincial government scrapping the PST exemption on used zero-emission vehicles, as well as increasing the speculation and vacancy tax from 0.5 to 1%.