Compliance
Upcoming Tax Amendments: What Canadians Should Understand About the July 2026 Draft Proposals
The Canadian government has released new draft tax legislative proposals in July 2026, aiming to adjust tax credits, clarify rules, and expand clean-growth incentives—here’s what could affect your taxes.
By NomadicTax Research Team • 5-8 min read • July 31, 2026
## Overview of the Draft Tax Proposals (July 23, 2026)
The Department of Finance released proposed amendments intended to:
- Streamline access to the **Disability Tax Credit (DTC)**, including expanding who can certify eligibility. ([canada.ca](https://www.canada.ca/en/department-finance/news/2026/07/government-launches-consultation-on-draft-legislation-for-various-tax-measures.html?utm_source=openai))
- Clarify the **taxable status of the Red Seal Completion Bonus**, a $5,000 bonus for apprentices certified in a Red Seal trade. ([canada.ca](https://www.canada.ca/en/department-finance/news/2026/07/government-launches-consultation-on-draft-legislation-for-various-tax-measures.html?utm_source=openai))
- Expand eligibility for the **Investment Tax Credit for Carbon Capture, Utilization, and Storage (CCUS)**—specifically allowing enhanced oil recovery storage methods at reduced credit rates. ([canada.ca](https://www.canada.ca/en/department-finance/news/2026/07/government-launches-consultation-on-draft-legislation-for-various-tax-measures.html?utm_source=openai))
- Amend GST/HST regulations relating to agricultural property quotas and a printed book rebate for a charity in British Columbia. ([canada.ca](https://www.canada.ca/en/department-finance/news/2026/07/government-launches-consultation-on-draft-legislation-for-various-tax-measures.html?utm_source=openai))
Public feedback is invited by **September 4, 2026**. Submission address: consultation-legislation@fin.gc.ca. ([canada.ca](https://www.canada.ca/en/department-finance/news/2026/07/government-launches-consultation-on-draft-legislation-for-various-tax-measures.html?utm_source=openai))
## What These Proposed Changes Mean in Practice
### Disability Tax Credit (DTC) Simplification
- More medical practitioners may certify long-term medical conditions.
- Shorter or simpler process could help people apply without expensive specialists or delays.
### Red Seal Completion Bonus Taxable Status
- If the bonus remains taxable, apprentices will need to report it as employment income.
- If clarified as non-taxable, it could reduce withholding or payroll taxes for trade workers.
### CCUS Investment Tax Credit (ITC)
- Enhanced oil recovery storage—currently not eligible—will be treated at **half rate** compared to geological storage. Businesses with carbon capture projects need to reassess project design and financing to take advantage. ([canada.ca](https://www.canada.ca/en/department-finance/news/2026/07/government-launches-consultation-on-draft-legislation-for-various-tax-measures.html?utm_source=openai))
### GST/HST Agricultural and Book Rebate Rules
- Agricultural leases/licenses delivering quota via lease/licence could get zero-rating under GST/HST regulations.
- Charities like Wonderful World of Books may finally claim rebated GST on printed books and certain audio recordings. ([canada.ca](https://www.canada.ca/en/department-finance/news/2026/07/government-launches-consultation-on-draft-legislation-for-various-tax-measures.html?utm_source=openai))
## Who Might Be Affected Most
| Group | Potential Effect |
|---|---|
| Individuals with disabilities | Lower barrier to DTC could boost access to benefits and reduce tax burden |
| Trade apprentices | Tax treatment of completion bonuses may affect take-home income |
| Clean-technology firms | Modified CCUS rules could influence investment decisions and project structure |
| Farmers and agricultural lessees | Tax savings if quotas under lease/licence are treated as zero-rated property |
| Literacy/non-profit organizations | Book rebate change could reduce costs of printed materials |
## What You Should Do Now
- **Review your eligibility**: If you rely on DTC or anticipate applying, watch for proposed final version and consult your tax advisor on timing.
- **Document your expenses and conditions**: For DTC or CCUS, ensuring you meet definitions or standards will be vital to benefit when changes take effect.
- **Subscribe for updates** from the Department of Finance and CRA—legislation may change during consultation.
- **Estimate potential gains or risks**: for example, apprentices take-home pay changes, or capital projects adjusting CCUS eligibility.
## Timeline of Key Dates
- **July 23, 2026**: Draft proposals released. ([canada.ca](https://www.canada.ca/en/department-finance/news/2026/07/government-launches-consultation-on-draft-legislation-for-various-tax-measures.html?utm_source=openai))
- **September 4, 2026**: Deadline to submit feedback. ([canada.ca](https://www.canada.ca/en/department-finance/news/2026/07/government-launches-consultation-on-draft-legislation-for-various-tax-measures.html?utm_source=openai))
- **Expected enactment**: some measures follow Budget 2025 law where possible, others await legislation after consultation.
## Conclusion
These draft proposals reflect shifts toward greater fairness, cleaner growth incentives, and tighter technical alignment. Though not yet law, they give guidance on possible future tax liabilities and opportunities. With a few preparatory steps before fall, individuals and businesses can stay ahead.