With the new year just around the corner, here’s my tax wish list for 2026. While I’m not holding my breath for these measures to actually get passed any time soon, it’s my hope that the government continues to study these ideas for tax reform.

Lower the tax rate

While the lowest tax bracket will be dropping come January 1, 2026, to 14 per cent from 14.5 per cent, this rate only applies to income up to $58,523 in 2026. The other four federal income tax brackets, while indexed to inflation

using the two per cent rate

for 2026, won’t be dropping. That means for 2026, income above $58,523 to $117,045 is taxed at 20.5 per cent, from $117,045 to $181,440 at 26 per cent, above $181,440 to $258,482 at 29 per cent, and anything above that taxed at 33 per cent. Each province also has its own set of provincial tax brackets, which adds another layer of tax on top of the federal rate.

In 2026, eight out of 10 provinces will have top marginal rates that exceed 50 per cent, meaning that Canada’s highest income earners will continue to contribute a disproportionate percentage of the total

personal income tax

to be collected. As I’ve stated numerous times before, once your tax rate goes above 50 per cent there is a disincentive to earn more money since you know you aren’t going to be able to keep even half of it.

A fall 2025 CPA Ontario report entitled

Tax Reform for Growth in Canada

contained 20 recommendations for tax reform. Chief among them was one calling on the federal and provincial governments to work together to reduce the combined top marginal rate to ensure no province exceeds the 50 per cent threshold, and then aim to align Canada’s rates with the United States and its Organisation for Economic Co-operation and Development peers.

Of course lowering the rate alone is only part of the problem. The other issue is that our rates kick in way too early. For example, our top rate, 33 per cent, kicks in at income over $258,482 for 2026. Contrast that with the top federal rate in the U.S. of 37 per cent, which only starts to apply with income over US$640,600, equivalent to about $880,000 in Canadian dollars. In states such as Florida, which do not have state personal income tax, 37 per cent is your full top rate of tax.

Reduce RRIF minimums

Readers will recall that in the run-up to the election, the Liberals promised to “protect retirement savings” by reducing the minimum amount that must be withdrawn from a registered retirement income fund (

RRIF

) by 25 per cent for one year. This measure was designed to “allow Canadian seniors more flexibility in choosing when to draw from their retirement savings.” The measure has since been abandoned, but should be revisited.

A RRIF is the most common successor of a registered retirement savings plan (RRSP), the other being the purchase of a registered annuity. A RRIF allows you to keep the same investments as you had in your RRSP and continue to defer taxes on the invested funds, with the notable exception that you must withdraw at least a required minimum amount annually, starting in the year after you set up the RRIF. You must close out your RRSP by the end of the year in which you turn 71.

The requirement to withdraw a minimum annual amount, whether you need those funds or not, is one of the biggest concerns expressed by seniors who lament that it effectively forces them to pay tax on their retirement assets before they need to spend them. The minimum required amount is based on a percentage factor (the “RRIF factor”), multiplied by the fair market value of your RRIF assets on Jan. 1 each year.

The RRIF rules haven’t kept up with recent demographic and economic trends, something that was the subject of a 2023

C.D. Howe Institute report

. That report noted that longer lives and lower returns increase the likelihood that current mandatory minimum withdrawals “will leave seniors with negligible income from their tax-deferred saving in their later years.”

Some concepts floated for RRIF reform include: reducing annual minimum RRIF factors; abolishing age limits and minimum withdrawals altogether and bumping up the age of mandatory RRSP conversion to 73 from 71.

Improve Canada Revenue Agency service

In September 2025, the government announced a 100-day plan to improve the performance of the

Canada Revenue Agency

(CRA) when it comes to the taxpayer experience. Early this month, the CRA announced that it has made “considerable and marked progress” in reducing client wait times, improving service standards and scaling up new technologies into its processes.

The service plan was introduced in response to overwhelming service pressures, focusing on four priority areas: improving call response; expanding digital self-service tools; addressing the root causes of service issues and accelerating service modernization.

The recent CRA update noted that call wait times have decreased. Specifically, the number of unique calls answered more than doubled – from 35 per cent to more than 70 per cent, with peaks of 92 per cent.

With the 2026 tax season approaching, and call volumes expected to rise significantly to nearly 300,000 calls per day at its peak, the CRA is extending term contracts, and additional contact centre staff are being hired, to be supported by enhanced training focused on accuracy and completeness.

Let’s hope that 2026 brings a better customer experience should you need to contact the CRA.

Simplify the Income Tax Act

Finally, our tax law is simply too complex. With the

Income Tax Act

now more than 2,800 pages, it is virtually incomprehensible to the average taxpayer, and even to some tax practitioners. The CPA Ontario report called for tax reform that prioritizes simplification. The current tax complexity leads to high compliance costs, especially for lower-income households and small businesses. It also increases administration costs for government bodies, which often have to deal with the overly complex and nitpicky rules to determine whether an individual is eligible for a specific tax credit or deduction.

One major step toward tax simplification would be to immediately eliminate the myriad boutique tax credits that are costly to administer and the benefits of which could be redistributed either with a larger basic personal exemption or a further reduction of personal tax rates.

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Jamie Golombek,
FCPA, FCA, CFP, CLU, TEP, is the managing director, Tax & Estate Planning with CIBC Private Wealth in Toronto.
Jamie.Golombek@cibc.com

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