An Act to amend the Income Tax Act (volunteer firefighting and search and rescue volunteer tax credit)

Summary#

This bill raises the federal non‑refundable tax credit base amounts for volunteer firefighters and search and rescue volunteers from $6,000 to $10,000. It also updates the definition of “eligible volunteer firefighting services” to make clear that being on call counts and that small, nominal pay does not disqualify a volunteer. The changes apply to 2026 and later tax years (filed in 2027 and onward) (Income Tax Act s.118.06(1), s.118.06(2), s.118.07(2); Application).

• Increases the maximum federal tax reduction per eligible volunteer from up to CAD $900 to up to CAD $1,500 at the lowest federal tax rate (15%) (s.118.06(2), s.118.07(2)).
• Keeps the credit non‑refundable (reduces tax owed but does not create a refund) (s.118.06(2), s.118.07(2)).
• Clarifies that “on call” time and non‑emergency duties count for firefighters (s.118.06(1)).
• Allows nominal pay that is not a livable wage without losing eligibility (s.118.06(1)).
• Leaves other existing eligibility rules (such as hours and certifications) unchanged (s.118.06(2) paragraphs (a)–(c) not amended).

What it means for you#

• Households

  • If a family member is an eligible volunteer firefighter or search and rescue volunteer, their federal tax bill could drop by up to CAD $1,500 per year starting with the 2026 tax year, up from up to CAD $900 today (s.118.06(2), s.118.07(2); Application).
  • If they owe less than CAD $1,500 in federal income tax, they can only use the credit up to the amount they owe. Any unused amount does not become a refund (non‑refundable credit) (s.118.06(2), s.118.07(2)).

• Volunteer firefighters

  • The credit base amount rises to $10,000 starting in 2026. At the lowest federal rate (15%), that is worth up to CAD $1,500 off your federal tax, if you meet existing conditions (s.118.06(2); Application).
  • “Being available or on call” and doing non‑emergency duties (such as training or public education) count toward eligible services. Receiving nominal pay that is not a livable wage will not disqualify you (s.118.06(1)).
  • Existing rules on minimum service hours and written certification by your fire department remain in place (s.118.06(2) paragraphs (a)–(c) not amended).

• Search and rescue volunteers

  • The credit base amount rises to $10,000 starting in 2026. At the lowest federal rate (15%), that is worth up to CAD $1,500 off your federal tax, if you meet existing conditions (s.118.07(2); Application).
  • The bill does not change the definition of eligible search and rescue services. Existing eligibility rules, including minimum hours and certification, continue (s.118.07(2) framework unchanged).

• Local governments and volunteer organizations

  • No direct funding changes. However, departments will likely continue to provide written confirmations of eligibility and hours, as under current law (s.118.06(2) paragraphs (a)–(c) not amended).
  • Clarified firefighter service definition may increase the number of members who qualify, depending on how “on call” hours are tracked (s.118.06(1)).

Expenses#

Estimated net cost: Data unavailable.

• No official fiscal note identified.

• Key per‑person amounts under federal law:

  Item	Amount	Frequency	Source
  Maximum federal tax reduction per eligible volunteer (current law)	Up to CAD $900 (15% of $6,000)	Per year	Income Tax Act s.118.06(2), s.118.07(2) (current)
  Maximum federal tax reduction per eligible volunteer (bill)	Up to CAD $1,500 (15% of $10,000)	Per year, starting 2026	s.118.06(2), s.118.07(2); Application
  Incremental per‑person increase	Up to CAD $600	Per year, starting 2026	Derived from above

• Total federal revenue impact depends on the number of eligible claimants who meet the hours and certification rules each year. Data unavailable.

Proponents' View#

• Provides stronger recognition and support to volunteers by raising the maximum federal tax reduction from up to $900 to up to $1,500 starting in 2026 (s.118.06(2), s.118.07(2); Application).
• Clarifies that on‑call availability and non‑emergency duties count for firefighters, which aligns the law with how volunteer departments operate (s.118.06(1)).
• Ensures volunteers are not penalized for receiving small honoraria or stipends, as long as they are not a livable wage (s.118.06(1)).
• Keeps existing guardrails (minimum hours, certification, one credit per year) to focus the benefit on active volunteers (s.118.06(2) paragraphs (a)–(c) unchanged).
• Begins in 2026, giving the Canada Revenue Agency (CRA) and departments time to update forms and guidance (Application).

Opponents' View#

• Reduces federal revenues; no cost estimate is provided, making long‑term budget impact unclear (No fiscal note; Data unavailable).
• Non‑refundable design means volunteers with little or no federal tax owing may see limited or no benefit, while those with higher tax owing receive the full amount (s.118.06(2), s.118.07(2)).
• “Livable wage” is not defined in the Income Tax Act, which could create interpretation disputes and uneven enforcement across jurisdictions (s.118.06(1)).
• Counting “being available or on call” may be hard to verify, increasing administrative burden for departments and CRA and potential for inconsistent record‑keeping (s.118.06(1)).
• The bill expands eligibility for firefighters but not for search and rescue definitions, which could create perceived inequity between volunteer groups (s.118.06(1) amended; s.118.07 definition not addressed).