Cost of Living Bill: Royal Assent & What It Means

March 12, 2026 – Ottawa, Ontario – Department of Finance Canada

The global context is changing rapidly, leaving economies, businesses and workers in a climate of uncertainty. As a result, Canada’s new government is focused on what it can control: building a stronger economy to make life more affordable for Canadians.

Bill C-4, entitled Making Life More Affordable for Canadians Acttoday received royal assent. This bill puts into law key affordability measures that will save Canadians hundreds of dollars a year. These measures include:

• The tax cut for the middle class: By reducing the marginal tax rate for the first bracket of personal income from 15% to 14% as of 1^is July 2025, nearly 22 million Canadians will benefit from tax savings of up to $420 per person and $840 for a two-income family this year. The tax relief will largely benefit people with incomes in the bottom two tax brackets (that is, those whose taxable income was less than $117,045 in 2026). Nearly half of them have income that is in the first tax bracket (i.e. a maximum taxable income of $58,523 in 2026). For Canadians whose 2025 income was not subject to withholding taxes, the tax relief will be visible this spring, when they file their 2025 income tax return.
• Reimbursement for first-time home buyers: Canada’s New Government is eliminating the Goods and Services Tax (GST) for first-time buyers of new homes worth up to $1 million and reducing the GST for buyers of first-time new homes worth between $1 million and $1.5 million. Thanks to this tax reduction, Canadians will be able to save up to $50,000, which will allow more young people and families to access the real estate market and realize their dream of becoming a homeowner. The rebate will generally apply to purchase and sale contracts entered into on or after March 20, 2025 and before 2031. Since the bill has received royal assent, the Canada Revenue Agency (CRA) will now be able to begin processing rebate requests.
• The permanent elimination of the federal fuel charge for consumers from the legislation: Canada’s new government has eliminated the fuel charge for consumers, saving them directly on the price at the pump. The government also removed the requirement for provinces and territories to have carbon pricing for consumers as of 1^is April 2025. These measures resulted in a drop in the price of gasoline in most provinces and territories. The reductions reached up to 18¢ per liter compared to 2024-2025 prices, which helped reduce inflation. Bill C-4 will confirm to Canadian consumers and businesses across the country that carbon pricing for consumers is permanently eliminated from federal legislation.