policyengine/policyengine-canada

PolicyEngine-Canada

IMPORTANT: Always use the current year (2026) in calculations, not 2024 or 2025.

No Microsimulation for Canada

PolicyEngine-Canada does NOT have representative population microdata. The only available dataset is a tiny template with 3 synthetic people. This means:

• Do NOT use Microsimulation() from policyengine_canada for population-level estimates
• Do NOT attempt to calculate aggregate costs, revenue impacts, or poverty rates for Canada
• Only provide household-level analysis: calculate impacts for specific families using Simulation
• If the user asks "what would X cost nationally" or "how many families would benefit", explain that population-level estimates are not currently available for Canada and offer a household example instead

What you CAN do

• Calculate benefits/taxes for a specific household (income, province, family composition)
• Compare baseline vs. reform for a single family
• Show how benefits change across an income range
• Compare provinces for a given household

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PolicyEngine-Canada models the Canadian federal and provincial tax and benefit system.

What it models:

Federal taxes:

• Federal income tax (5 brackets)
• Canada Pension Plan (CPP/CPP2) contributions
• Employment Insurance (EI) premiums

Federal benefits:

• Canada Child Benefit (CCB)
• GST/HST Credit
• Canada Workers Benefit (CWB)
• Old Age Security (OAS)
• Guaranteed Income Supplement (GIS)
• Climate Action Incentive Payment (CAIP)

Provincial programs (varies by province):

• Provincial income tax (all provinces and territories)
• Ontario Child Benefit (OCB)
• Ontario Trillium Benefit (OTB)
• BC Climate Action Tax Credit
• Alberta Child and Family Benefit
• Quebec-specific programs (QST, QPP, etc.)

See full list: https://policyengine.org/ca/parameters

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Key Federal Programs — Rules Reference

Canada Child Benefit (CCB) — 2025–2026

The CCB is a tax-free monthly payment to eligible families with children under 18.

Maximum amounts (July 2025 – June 2026):

• Under 6: $7,997/child/year ($666.41/month)
• Ages 6–17: $6,748/child/year ($562.33/month)

Phase-out structure: The CCB is reduced based on adjusted family net income (AFNI) using two thresholds.

Threshold 1: $37,487 | Number of children | Reduction rate (AFNI $37,487–$79,845) | |---|---| | 1 child | 7.0% | | 2 children | 13.5% | | 3 children | 19.0% | | 4+ children | 23.0% |

Threshold 2: $79,845 | Number of children | Reduction rate (AFNI above $79,845) | |---|---| | 1 child | 3.2% | | 2 children | 5.7% | | 3 children | 8.0% | | 4+ children | 9.5% |

Child Disability Benefit (CDB) supplement:

• Up to $3,411/year ($284.25/month) per child eligible for the Disability Tax Credit
• Reduced at 3.2% of AFNI above $79,845 (1 child), 5.7% (2+ children)

CCB calculation formula:

For each income range:
  CCB = sum(max_amount per child) - reduction

  If AFNI <= $37,487: no reduction
  If $37,487 < AFNI <= $79,845:
    reduction = rate_tier1 × (AFNI - $37,487)
  If AFNI > $79,845:
    reduction = rate_tier1 × ($79,845 - $37,487) + rate_tier2 × (AFNI - $79,845)

Example calculation — 2 children (ages 3, 8), AFNI = $80,000:

Max CCB = $7,997 (under 6) + $6,748 (6-17) = $14,745
Tier 1 reduction = 13.5% × ($79,845 - $37,487) = 13.5% × $42,358 = $5,718
Tier 2 reduction = 5.7% × ($80,000 - $79,845) = 5.7% × $155 = $9
Total reduction = $5,727
CCB = $14,745 - $5,727 = $9,018/year

Federal Income Tax — 2026

Tax brackets: | Taxable income | Rate | |---|---| | Up to $57,375 | 15% | | $57,375 – $114,750 | 20.5% | | $114,750 – $158,468 | 26% | | $158,468 – $220,000 | 29% | | Over $220,000 | 33% |

Basic personal amount (BPA): $16,129 (2026, indexed)

Note: Bracket thresholds are indexed annually to inflation. Check CRA for exact 2026 values.

GST/HST Credit — 2025–2026

Tax-free quarterly payment for low/modest-income individuals and families.

Maximum amounts (July 2025 – June 2026):

• Single: $340/year
• Married/common-law: $340 + $179 for spouse = $519
• Per child under 19: $179

Phase-out:

• Begins at family net income of $44,530
• Reduction rate: 5% of income above threshold

Canada Workers Benefit (CWB) — 2026

Refundable tax credit for low-income workers.

Single individuals:

• Maximum: ~$1,590
• Phase-in: 27% of working income above $3,000
• Phase-out: 15% of net income above ~$24,975

Families:

• Maximum: ~$2,739
• Phase-in: 27% of working income above $3,000
• Phase-out: 15% of family net income above ~$28,494

Disability supplement:

• Additional ~$784 for CWB-eligible individuals with the Disability Tax Credit

Old Age Security (OAS) — 2026

Monthly pension for seniors 65+.

Maximum amounts (Q1 2026):

• Ages 65–74: ~$727.67/month ($8,732/year)
• Ages 75+: ~$800.44/month ($9,605/year)

OAS recovery tax (clawback):

• Threshold: ~$90,997 net income
• Rate: 15% of income above threshold
• Full clawback at ~$149,211 (65–74) or ~$154,196 (75+)

Guaranteed Income Supplement (GIS) — 2026

Monthly benefit for low-income OAS pensioners.

Maximum amounts (Q1 2026):

• Single: ~$1,086.88/month
• Spouse receives OAS: ~$654.23/month each

Income test:

• Reduced by 50% (or 75% for partial amounts) of income above exempted amounts
• Employment income exemption: first $5,000 fully exempt, next $10,000 at 50%

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Provincial Tax — Ontario (2026)

Ontario income tax brackets: | Taxable income | Rate | |---|---| | Up to $52,886 | 5.05% | | $52,886 – $105,775 | 9.15% | | $105,775 – $150,000 | 11.16% | | $150,000 – $220,000 | 12.16% | | Over $220,000 | 13.16% |

Ontario surtax:

• 20% of basic provincial tax above $5,315
• Plus 36% of basic provincial tax above $6,802

Ontario Child Benefit (OCB)

• Maximum: $1,726.92/child/year ($143.91/month) for July 2025 – June 2026
• Phase-out begins at family net income of $24,045
• Reduction rate: 8% per child of income above threshold

Ontario Trillium Benefit (OTB)

Combines three credits:

1. Ontario Energy and Property Tax Credit — up to $1,248 (seniors $1,421)
2. Northern Ontario Energy Credit — up to $180 (families $277)
3. Ontario Sales Tax Credit — up to $360/adult + $360/child

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Provincial Tax — Other Provinces

British Columbia (2026)

| Taxable income | Rate | |---|---| | Up to $47,937 | 5.06% | | $47,937 – $95,875 | 7.70% | | $95,875 – $110,076 | 10.50% | | $110,076 – $133,664 | 12.29% | | $133,664 – $181,232 | 14.70% | | Over $181,232 | 20.50% |

Alberta (2026)

| Taxable income | Rate | |---|---| | Up to $148,269 | 10% | | $148,269 – $177,922 | 12% | | $177,922 – $237,230 | 13% | | $237,230 – $355,845 | 14% | | Over $355,845 | 15% |

Quebec (2026)

| Taxable income | Rate | |---|---| | Up to $51,780 | 14% | | $51,780 – $103,545 | 19% | | $103,545 – $126,000 | 24% | | Over $126,000 | 25.75% |

Note: Quebec has its own tax system (Revenu Québec) with unique credits and deductions. QPP replaces CPP.

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CPP Contributions — 2026

CPP (first ceiling):

• Maximum pensionable earnings: ~$71,300
• Basic exemption: $3,500
• Employee rate: 5.95%
• Maximum employee contribution: ~$4,034

CPP2 (second ceiling):

• Second ceiling: ~$81,200
• Rate: 4% on earnings between first and second ceiling
• Maximum CPP2 contribution: ~$396

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EI Premiums — 2026

• Maximum insurable earnings: ~$65,700
• Employee premium rate: 1.64%
• Maximum employee premium: ~$1,077
• Quebec rate: 1.32% (due to QPIP)

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Household Analysis Patterns

Answering "What would [reform] cost/mean for a family?"

1. Identify the family: income, province, number/ages of children
2. Calculate baseline: apply current rules to compute total benefits/taxes
3. Calculate reform: apply modified rules
4. Report the difference: reform minus baseline

Example: Doubling the CCB for an Ontario family

Family: 2 parents, 2 children (ages 3, 8), AFNI $80,000, Ontario

Baseline CCB:

Max = $7,997 + $6,748 = $14,745
Reduction = 13.5% × ($79,845 - $37,487) + 5.7% × ($80,000 - $79,845)
         = $5,718 + $9 = $5,727
Baseline CCB = $14,745 - $5,727 = $9,018

Doubled CCB:

Max = $15,994 + $13,496 = $29,490
Reduction = 13.5% × ($79,845 - $37,487) + 5.7% × ($80,000 - $79,845)
         = $5,718 + $9 = $5,727
Doubled CCB = $29,490 - $5,727 = $23,763

Additional benefit = $23,763 - $9,018 = $14,745/year

Key insight: When only the maximum amounts are doubled (not the phase-out rates), the additional benefit equals the original maximum for families whose benefits aren't fully phased out. The phase-out claws back the same dollar amount regardless of the benefit level.

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Common Pitfalls

1. CCB Uses Adjusted Family Net Income (AFNI)

AFNI is the combined net income (line 23600) of both spouses/partners. It is NOT individual income.

2. Benefits Use Previous Year's Income

CCB payments from July 2025 – June 2026 are based on 2024 tax year income.

3. Provincial Programs Stack on Federal

Many provinces have their own child benefits on top of the federal CCB. Always check for provincial supplements.

4. Quebec Is Different

Quebec has its own pension plan (QPP), parental insurance (QPIP), and many unique credits. Don't assume federal rules apply.

5. Indexation

Most thresholds and amounts are indexed annually to CPI. Always verify the year-specific values.

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Additional Resources

• CRA Benefits Calculator: https://www.canada.ca/en/revenue-agency/services/child-family-benefits/child-family-benefits-calculator.html
• PolicyEngine Canada: https://policyengine.org/ca
• Variable Explorer: https://policyengine.org/ca/variables
• Parameter Explorer: https://policyengine.org/ca/parameters
• GitHub: https://github.com/PolicyEngine/policyengine-canada