Estimating the Fiscal Cost of Motion M-24: Three New Federal Personal Income Tax Brackets for High-Income Taxpayers

Sep 24, 2026

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At the request of Member of Parliament Don Davies, the Parliamentary Budget Office (PBO) estimated the fiscal cost of motion M-24, which proposes the introduction of three new federal personal income tax (PIT) brackets for high-income tax filers. This note summarizes the impact of adding these new tax brackets over a five-year period with an implementation date of January 1, 2027. As requested, estimates include a behavioural response as well as any changes to taxes payable associated with Alternative Minimum Tax calculations.

Highlights

PBO estimates that introducing three new federal PIT brackets above the current top bracket, with marginal tax rates increasing by one percentage point at each threshold, will generate $4.5 billion in total net federal revenues over the 2026-27 to 2030-31 projection period after accounting for behavioural responses.

PBO estimates that behavioural adjustments would reduce gross federal revenues from the measure of $8.7 billion by roughly $4.2 billion between 2026-27 to 2030-31, offsetting approximately 48 per cent of the gross revenue gain.

A substantial share of projected revenues is generated from those reporting taxable income above $1 million, reflecting the current income distribution and the progressive structure of the proposal. Consequently, the estimates are sensitive to assumptions regarding behavioural responses and the income distribution within this group.