Executive summary
Budget 2026 proposes to make the Canada Caregiver Credit refundable, providing an estimated $845M in additional support over four years. Yet the reform retains existing eligibility rules that generally exclude people providing qualifying care to close friends or others they consider family.
National research documents unpaid care for friends and neighbours, while Canadian research identifies the importance of chosen-family relationships in some 2SLGBTQI+ communities, including among newcomers. Federal Employment Insurance and Quebec’s caregiver tax credit already recognize certain caregivers outside legally defined family relationships.
Finance Canada should review these restrictions and develop a costed, verifiable approach to recognizing equivalent caregiving responsibilities, while maintaining the eligibility requirements.
A Canadian who regularly helps pay for food and shelter for a sibling with a qualifying disability may receive federal tax relief. Someone who provides the same care to a lifelong friend or chosen family generally cannot. The financial responsibilities may be identical, yet the tax system treats them differently.
Approximately 585,000 caregivers are expected to benefit from the proposal to make the Canada Caregiver Credit refundable, including 180,000 who currently receive nothing. Eligible caregivers could receive up to $1,260 annually.
The reform is a welcome recognition of the financial burden of unpaid care, particularly for Canadians with low incomes. The government’s own analysis estimates that 80% of the additional support will go to families with net incomes below $60,000.
Yet the government has retained the credit’s existing definition of eligible family relationships, leaving people who care for close friends or others they consider family outside its reach.
Care beyond a family tree
In 2022, approximately 13.4 million Canadians provided unpaid care to children or care-dependent adults. Among those caring exclusively for adults, 17.3% reported caring for a friend or neighbour, according to Statistics Canada.
The Canadian Centre for Caregiving Excellence’s 2025 National Caregiving Strategy also found that 2SLGBTQI+ caregivers were more likely to care for a close friend or more distant relative. It goes further by recommending that ‘programs and supports need to be designed to recognize this way of forming community and providing care.’
These findings tell us something about the relationships through which Canadians provide care, even if they do not establish how many people would qualify for an expanded tax credit.
Families are formed and sustained in many different ways. Some relationships are defined by birth or marriage. Others develop through decades of friendship, shared responsibility, or the simple act of consistently showing up for someone when they need care.
Finding family after persecution
For some LGBTQI+ refugees, relationships not defined by birth or marriage carry profound meaning.
To flee persecution sometimes means leaving behind the people, places, and relationships that have defined a person’s entire life. Many leave loving families they may not see again for years. Others escape rejection or violence within their own homes.
For some, arriving in Canada means finally being safe enough to live openly, yet having no family nearby when illness or disability leaves them dependent on others for care, food, or shelter.
In Canada, family may take shape through the relationships formed in that rebuilding and resettlement process. The friend who opens their home, the person who accompanies someone through illness, or the community member who becomes a source of lasting care and stability. These relationships may develop into responsibilities that are every bit as consequential as those traditionally associated with family.
A Canadian study published in October 2026, involving 40 LGBTQIA+ newcomer youth in Calgary, documented the importance of chosen family and queer kinship in establishing belonging and community.
The study did not examine eligibility for disability-related caregiving benefits, but it provides insight into how family relationships can develop beyond biological ties.
An older adult may depend on a neighbour they have known for decades. Someone living with a disability may rely on a close friend who has become their primary source of support. People without surviving or nearby relatives may build relationships of care and responsibility that last a lifetime.
The people we depend on are not always the people to whom we are legally related.
Recognition already exists
Canadian governments have already recognized this reality in other caregiving programs.
Federal Employment Insurance caregiving benefits allow someone to qualify when the person receiving care considers them to be like family, even without a biological or legal relationship. Quebec’s refundable caregiver tax credit also recognizes certain caregivers who support adults outside their legally recognized families
Both programs have defined eligibility and verification requirements. Their purposes differ from the federal Canada Caregiver Credit, but they establish that public benefits can recognize caregiving relationships without relying exclusively on conventional family structures.
Finance Canada should examine why the Canada Caregiver Credit continues to draw a narrower boundary.
Fairness and fiscal responsibility
Expanding eligibility would require careful attention to cost and program integrity. The government’s $845M estimate covers refundability under the existing rules. The additional cost of recognizing caregivers outside those relationships has not been established.
Any expansion should preserve the credit’s substantive requirements, including a qualifying physical or mental infirmity and the applicable financial dependency conditions. Friendship alone would not create an entitlement. Evidence of sustained care, appropriate medical documentation, and confirmation from the person receiving support could form part of a fair verification process.
Recommendations
- Review the definition of eligible family relationships. Finance Canada should examine extending eligibility to people providing comparable, sustained care outside legally recognized family relationships, while retaining the existing medical criteria and income limits for the person receiving care.
- Develop a costed and verifiable reform proposal. Finance Canada should work with the Canada Revenue Agency and Employment and Social Development Canada to develop and cost such a proposal, drawing on the experience of federal EI benefits and Quebec’s caregiver credit.
- Assess the excluded population and consult caregivers. The review should also examine the people who remain outside the current framework. Existing research establishes that Canadians provide substantial unpaid care beyond their legally recognized families. It does not tell us how many of those caregivers would otherwise satisfy the federal credit’s medical and financial requirements, or whether particular communities experience disproportionate exclusion.
These are considerations the government has the capacity to investigate, including through consultation with caregivers, disability organizations, seniors, 2SLGBTQI+ communities, immigrants, and refugee-led organizations.
Conclusion
Canada’s tax system should reflect the responsibilities people actually carry. That requires sound evidence, responsible use of public funds, and eligibility rules that can be administered fairly.
For someone who has fled persecution, finding family again can be part of finding home. For another Canadian, family may be the neighbour who has stood beside them for thirty years, or the friend who devotes years of their life to caring for someone through illness, bearing the costs and responsibilities of family while remaining a stranger in the eyes of the tax system.
Budget 2026 recognizes that Canadians with low incomes deserve greater financial support for the care they provide. The government now has an opportunity to examine whether that recognition should extend to people whose relationships fall outside a traditional family tree.
The people who care for us are not always the people we are related to. Our tax system should be capable of recognizing both.
Thoughts?