The federal budget didn’t follow through on some election promises to retirees.Adrian Wyld/The Canadian Press
When it comes to seniors, what was missing from Prime Minister Mark Carney’s first federal budget was just as easy to spot as what was in it.
On taxes and benefits, the budget was all about marginal tweaks. It reined in a few tax breaks and rolled back some financial assistance here and there, while modestly increasing support elsewhere, mostly through measures that help low-income and other vulnerable Canadians.
Federal budget basics
Here are the highlights of the Carney government’s plan, and how they might affect your personal finances.
This approach also means the government didn’t follow through on some election promises to retirees that would have deepened the hole in federal coffers.
Here are some of the key measures that could affect older Canadians’ bottom lines:
No tweaks to RRIF withdrawal minimums or boost to the GIS
During the election campaign, the Carney Liberals had promised to reduce the minimum amount that retirees must withdraw from a Registered Retirement Income Fund (RRIF) by 25 per cent for one year.
They also pledged to boost the Guaranteed Income Supplement by 5 per cent for a year, an increase that would have provided up to $652 more to low-income seniors.
Both those measures, though, were conspicuously absent from the budget.
The lack of changes on RRIF withdrawal minimums, in particular, was “disappointing,” said Jamie Golombek, managing director of tax and estate planning at CIBC.
“The one thing retirees were looking for was not there,” he said.
Opinion: Ottawa’s RRIF rules are forcing seniors to run out of savings
The temporary reduction was meant to shield retirees from the volatility that seized financial markets after the onset of U.S. President Donald Trump’s trade war. The idea was to reduce the amount they would have to withdraw in a down market.
The market has staged a strong rebound since then, but the government missed an opportunity to permanently give seniors more flexibility over their RRIF withdrawals, Mr. Golombek said.
The current rules, which force retirees to withdraw increasingly large percentages of their holdings as they age – up to 20 per cent a year for people aged 95 and older – are out of sync with today’s rising life expectancies, he added.
Often, seniors are forced to take money out before they need to.
A financial parachute for older public servants
While there were no major tax increases or benefits reductions in the budget, the Carney government made it clear it’s getting ready for significant cuts to the federal public service.
The budget aims for the public service to shed roughly 30,000 net jobs by the 2028-29 fiscal year. But the government is providing a financial parachute for older public-sector workers.
Eligible employees will be able to retire with full benefits as young as 50 (for those who joined the service before 2013), or starting at age 55 (for those who joined after Jan. 1, 2013) and with fewer years of employment compared with the current requirements.
The early retirement package will be available for one year starting on Jan. 15, 2026, or when legislation introducing the measure receives royal assent.
No more fees to transfer investment accounts
Transferring investment and registered accounts – such as a tax-free saving account or a registered retirement savings plan – from one financial institution to another can be a lengthy affair that typically costs Canadians $150 in fees per account.
In the budget, the government has pledged to introduce draft regulations by next spring to prohibit such fees and require timely transfers.
A small curb to tax claims for home accessibility retrofits
Canadians aged 65 and over, along with people eligible for the Disability Tax Credit, can claim up to $20,000 in eligible renovations to make their homes more accessible through a non-refundable tax credit known as the Home Accessibility Tax Credit.
But some of those costs might also be eligible for the Medical Expense Tax Credit, another non-refundable tax credit that Canadians can claim on the certain medical and disability-related expenses that exceed specific thresholds.
Up to now, Canadians have been able to claim the same eligible expense through both tax credits. The government proposed to end that double-dipping.
Starting in the 2026 tax year, Canadians will no longer be able to claim expenses they’ve already claimed under the medical tax credit on the Home Accessibility Tax Credit.
