Making Child Care More Affordable for Canadian Families Act

This bill, also called the Making Child Care More Affordable for Canadian Families Act, changes how much parents can deduct from their income taxes for child care expenses. Right now, the child care expense deduction allows up to $11,000 for a child eligible for the disability tax credit, up to $8,000 for a child under 7, and up to $5,000 for other children. The bill raises these amounts starting in the 2027 tax year to $16,345, $12,855, and $7,529 respectively.

Beyond this one-time increase, the bill also sets up automatic yearly adjustments. From 2027 onward, these dollar limits will be indexed to inflation using the Consumer Price Index, the same way other amounts in the Income Tax Act (like tax brackets) already are. This means the deduction limits will rise gradually each year to keep pace with the cost of living, rather than staying fixed until Parliament decides to change them again.

In short, the practical effect for families is a higher tax deduction for child care costs beginning in 2027, with that deduction amount automatically increasing in future years to reflect inflation, instead of losing value over time as prices rise.

This bill changes the dollar amounts of the child care expense deduction under the Income Tax Act and adds those amounts to the list of figures that are automatically adjusted for inflation each year.

• New deduction amounts — for the 2027 taxation year and later, the child care expense deduction rises to $16,345 for a child eligible for the disability amount, $12,855 for a child under 7, and $7,529 for other children, up from the current $11,000, $8,000, and $5,000 figures that applied before 2027.
• Automatic indexation — these 2027 amounts become the baseline figures added to subsection 117.1(2) of the Income Tax Act, the existing mechanism that adjusts certain tax figures annually to the Consumer Price Index, so the deduction amounts will change each year without further legislation.
• No new body or discretionary power — the bill does not create any new office, agency, or minister's discretion; the amounts and the indexation formula are set directly in the text of the Act.
• No future regulation required — the indexing mechanism relies on the Consumer Price Index calculation already used elsewhere in section 117.1, rather than leaving the method to be defined later.
• Oversight — there is no review period, reporting requirement, or sunset clause specified; the amended amounts and indexation apply indefinitely once in force.