Glossary

Plain-language definitions of Canadian personal finance terms. 20 entries, each linked to a relevant calculator and reference articles.

A

1. AFNI: Adjusted Family Net Income

   AFNI is family net income (line 23600 of both spouses' tax returns) minus UCCB and RDSP income received, plus UCCB and RDSP repayments. Used to calculate CCB, GST/HST credit, and other federal benefits.

B

1. BPA: Basic Personal Amount

   The Basic Personal Amount is the income each Canadian can earn tax-free at the federal level. The 2026 federal BPA is $16,452, generating a non-refundable tax credit worth $2,303 at the 14% lowest federal rate.

C

1. Capital Gains Inclusion Rate

   The capital gains inclusion rate is the portion of a capital gain added to taxable income. For 2026: 50% on the first $250,000 of personal annual gains; 66.67% on amounts above.

2. CCB: Canada Child Benefit

   CCB is a tax-free monthly payment to families with children under 18. Maximum 2025-2026: $7,997/year per child under 6, $6,748/year per child 6-17, paid in full to families with AFNI under $37,487.

3. CMHC Mortgage Insurance

   CMHC mortgage default insurance is required on mortgages with less than 20% down payment. Premium ranges from 0.6% at 65% LTV up to 4.0% at 95% LTV. Premium is added to the mortgage principal.

D

1. DTC: Disability Tax Credit

   The DTC is a non-refundable federal tax credit for individuals with severe and prolonged impairments. The 2026 federal base amount is $10,138, generating $1,521 in federal tax reduction.

E

1. EI MIE: Maximum Insurable Earnings

   MIE is the annual earnings ceiling for Employment Insurance contributions. 2026 MIE: $68,900. Earnings above this are not insurable. 2026 employee EI rate: 1.63% outside Quebec, 1.30% in Quebec.

F

1. FHSA: First Home Savings Account

   The FHSA lets first-time home buyers contribute up to $8,000/year (lifetime $40,000) with tax-deductible contributions and tax-free withdrawals for a qualifying home purchase.

G

1. GIS: Guaranteed Income Supplement

   GIS is a tax-free monthly benefit for low-income seniors 65+ who receive OAS. Q1 2026 maximum: $1,108.74/month (single). Reduced approximately $0.50 per dollar of income above zero. Income cutoff $22,488 for singles.

H

1. HBP: Home Buyers’ Plan

   The HBP allows a first-time home buyer to withdraw up to $60,000 from RRSPs tax-free toward a qualifying home purchase. Withdrawn amounts must be repaid into an RRSP over 15 years.

L

1. Land Transfer Tax (LTT)

   Land transfer tax is a provincial tax paid by the buyer at closing on the purchase of real estate. Rates and brackets vary by province. Toronto adds a municipal LTT on top.

2. LIRA: Locked-In Retirement Account

   A LIRA holds pension funds transferred out of an employer's plan. Funds are locked in for retirement income; cannot be withdrawn as a lump sum. Must be converted to a LIF or annuity by age 71.

M

1. Mortgage Stress Test

   The OSFI B-20 stress test requires Canadian mortgage borrowers to qualify at the higher of contract rate plus 2 percentage points or 5.25%. Determines maximum mortgage size; does not change actual rate paid.

N

1. Net Income (Line 23600)

   Net income on line 23600 of the T1 return is total income minus deductions (RRSP, union dues, child care, etc.). Used to determine OAS clawback, AFNI for benefits, and most credit phase-outs.

O

1. OAS: Old Age Security

   OAS is a monthly federal pension paid to most Canadians 65+ based on years of Canadian residency. Q2 2026 maximum: $743.05/month at age 65-74 and $817.36/month at age 75+. Income-tested with 15% clawback above $95,323 (2026 income year).

P

1. PA: Pension Adjustment

   The Pension Adjustment is the deemed value of pension benefits earned in a year, reported on T4 box 52. It reduces next year's RRSP contribution room dollar-for-dollar.

R

1. RDSP: Registered Disability Savings Plan

   The RDSP is a tax-deferred savings plan for people approved for the Disability Tax Credit. The federal government matches contributions up to $3,500/year (Canada Disability Savings Grant) and adds up to $1,000/year for low-income beneficiaries (Canada Disability Savings Bond).

2. RRIF: Registered Retirement Income Fund

   A RRIF is a tax-deferred retirement account that an RRSP must be converted to by December 31 of the year you turn 71. RRIFs require minimum withdrawals each year starting the year after conversion.

Y

1. YAMPE: Year’s Additional Maximum Pensionable Earnings

   YAMPE is the second-tier earnings ceiling for CPP2 contributions, set at $85,000 for 2026. Earnings between YMPE and YAMPE are subject to CPP2 of 4% employee.

2. YMPE: Year’s Maximum Pensionable Earnings

   YMPE is the annual earnings ceiling for base CPP contributions, set at $74,600 for 2026 by the federal government and indexed each year to wage growth.