Cost Estimate of Increasing the Basic Personal Amount Tax Credit

In December 2019, the government announced its intention to increase the Basic Personal Amount (BPA) beginning in 2020. The BPA is an indexed non-refundable tax credit available to all residents of Canada. Individuals can also claim an equivalent amount if they have a dependent or partner, net of their dependents’ and partner’s net income. PBO estimates the net cost of this policy change to be $783 million in 2019-2020, rising to $6.9 billion in 2023-2024 once the increased BPA is fully implemented.