Overview of Bill C-4: Making Life More Affordable Act
In March 2026, the Canadian government passed Bill C-4, which includes major affordability-focused tax changes: cutting the federal lowest personal income tax rate and expanding GST exempt/rebate rules for first-time home buyers on new housing. (canada.ca)
What’s Changing:
| Measure | What it did | Effective Date | Who benefits |
|---|---|---|---|
| Reduced first marginal income tax rate | Federal rate dropped from 15% to 14% on first income tax bracket | July 1, 2025 | ~22 million Canadians; up to ~$420/year individual, ~$840 for two-income families (canada.ca) |
| GST relief for first-time home buyers (new homes) | GST eliminated on new homes ≤ $1 million; reduced for homes between $1-1.5 million | agreements entered on or after March 20, 2025, and before 2031 | First-time buyers of new properties; potential savings up to $50,000 (canada.ca) |
| Other: removal of consumer fuel charge, permanent GST/HST benefit changes | Fuel charge permanently removed; Canada Groceries & Essentials Benefit introduced; etc. | Fuel charge removal effective April 1, 2025; bill Royal Assent in March 2026 etc. | Consumers, particularly those paying fuel; low-/middle-income households (canada.ca) |
How To Leverage These Changes
- Middle-income earners should update withholding if payroll deductions haven’t adjusted marginal rate change.
- Prospective home buyers of new builds should verify agreement dates (after March 20, 2025) to qualify for GST relief. Document carefully.
- Low / moderate income households: ensure tax return claims for the Canada Groceries and Essentials Benefit; watching for automatic filing/pre-filled return opportunities being expanded. (canada.ca)
Examples
- Casual worker on minimum wage, previously 15% on first bracket, now pays 14% on first ~$58,523 of taxable income. Could save $100-$400 depending on income.
- Young couple buying a new condo for $1.3 million: eligible for partially reduced GST, saving options compared to full GST.
Things to Monitor / Be Aware Of
- GST relief only applies to new homes, not resale.
- Income tax change is federal; provincial tax still adds separate tax due.
- Timing of purchase agreements, closings, and federal/provincial HST rules may differ.
- Ensure liquidity and proof of first-time buyer status, maybe under CRA verification.