Should the Canada Employment Credit Reflect the True Cost of Going to Work?

With the rising cost of transportation, meals, clothing, and other work-related expenses, many Canadians are questioning whether the Canada Employment Credit, set at $1,501 for 2026, still reflects the real cost of earning employment income. Tax professionals, employers, and taxpayers continue to debate whether the credit should be increased, restructured, or replaced altogether. When our poll asked if the Canada Employment Credit should be increased, 87% said yes. Below are perspectives shared by tax and financial professionals across the country.

Here Are The Comments on the No side:

“No, it should not be increased. You already receive a tax break simply for being employed. Even those who work from home can claim the credit without incurring transportation costs. High-income earners—including CEOs earning $500,000 or more—can still claim it, even with employer-paid vehicles. The credit has lost its original purpose.”
— Dan Smith

“Why not simplify the tax system by eliminating credits like this and increasing the Basic Personal Amount instead? Governments often increase complexity and bureaucracy rather than reducing it.”
— Derek T

“Like many government programs, this credit was introduced without long-term thinking. While I don’t believe in handing out credits indiscriminately, those that exist should be updated periodically to reflect economic reality.”
— Robert Litschel

For the Yes side:

“The Federal Government supports most residents who earn a low to modest income with up to 100% of benefits and credits. In many cases, this results in little or no taxable income being reported to receive maximum benefits. As income earners operating within a tiered tax system, the Canada Employment Credit provides only 15% of the non-refundable tax credit amount, prorated based on income earned. As income rises, we pay more tax, receive fewer benefits, and require fewer government resources. Yet the employment credit does not function as an incentive that reflects the real cost of going to work each year, nor does it recognize higher marginal tax rates.

— Ann-Margaret Laurin

“Yes. The cost of living in Canada has increased significantly, and recent tax rate reductions are insufficient. For taxpayers required to work outside the home, the additional cost of employment should be recognized. An employment tax credit of at least $2,500 would not be unreasonable in the current inflationary environment.”
— Gaetan Ladouceur

“Yes, the credit should be adjusted. While the transit tax credit benefits urban workers, rural workers without access to public transit rely more heavily on the Canada Employment Credit.”
— Lorraine Keating

“Yes, the credit should be tied to the annual inflation rate.”
— Robert D’Alessandro, December 4, 2025

Thanks for all who participated in last month’s poll question: This month, tell us your thoughts on this question….“The automobile deduction limits have been raised.  The CCA ceiling for passenger vehicles to $39,000 plus tax for 2026. In your opinion, is that high enough?”

Learn the Fundamentals Behind Credits Like These

Understanding how employment credits, non-refundable tax credits, and income thresholds work is essential—especially for those new to tax preparation or supporting clients during filing season.

CE Summit: Rookie Tax Training on February 4 provides a clear, practical foundation in personal tax concepts, including:

• How non-refundable tax credits work
• Who benefits from employment-related credits—and why
• Common client misconceptions
• How credits interact with income levels and benefits

Whether you’re new to tax preparation or looking to strengthen your confidence before the busy season, this session delivers essential, real-world knowledge you can apply immediately.

Join Rookie Tax Training – February 4 and build your personal tax expertise from the ground up.

Or – take the full series to earn your Income Tax Preparer Certificate, featuring the following events this February:

• February 11 – Calculating Capital Gains
• February 18 – Families & Their Real Estate
• February 26 – Focus on Small Business