Canada’s volunteer firefighter tax credit could be combined with the federal search-and-rescue volunteer tax credit starting with the 2027 and subsequent tax years.
The proposal in Budget 2026 would create one 14-per-cent non-refundable credit calculated on $6,000, while allowing eligible hours from both activities to count toward the annual service requirement.
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Volunteer Firefighter Tax Credit: What the proposed combined credit would do
Under the current system, the Volunteer Firefighters Tax Credit and the Search and Rescue Volunteers Tax Credit are separate credits with the same basic value.
Each credit is calculated at 14 per cent of $6,000, which represents a maximum federal tax reduction of $840 for an eligible claimant who has enough tax payable to use the full amount.
Budget 2026 proposes to replace the two credits with a single Volunteer Firefighters and Search and Rescue Volunteers Tax Credit.
The combined credit would still be calculated at 14 per cent of $6,000.
The main change would be that volunteer firefighter service and search-and-rescue service could be added together when determining whether a person reaches the required number of hours.
How the 200-hour rule would change
The existing rules require at least 200 hours of eligible service during the tax year.
At present, a person who performs both types of volunteer work may claim either credit but not both.
The proposal would allow eligible hours from the two activities to be combined for the 200-hour threshold.
For example, a person completing 120 eligible hours as a volunteer firefighter and 80 eligible hours with a search-and-rescue organization could meet the combined requirement if all other conditions are satisfied.
The measure would therefore be most significant for volunteers who split their service between emergency response and search-and-rescue organizations.
When the change would apply
The proposal would apply to the 2027 and subsequent taxation years.
That means it would not change the rules for the 2026 tax year unless the government introduces a different effective date through legislation.
Budget measures are proposals until they are enacted by Parliament, so volunteers should continue to follow the existing credit rules when preparing earlier returns.
What “non-refundable” means
The proposed credit would remain non-refundable.
That means it can reduce federal income tax otherwise owing, but it would not generally create a cash payment for a person who has no tax payable.
The $840 figure is the maximum federal tax reduction before considering a person’s available tax payable and any other credits or adjustments.
Provincial or territorial tax treatment may also differ because the proposal concerns the federal income tax system.
What volunteers should keep track of
People who expect to claim the credit should maintain records of their eligible service hours and confirm that their organization meets the applicable requirements.
Volunteers who serve in both roles may also need records that clearly separate or identify firefighter and search-and-rescue hours before combining them for the proposed threshold.
The Canada Revenue Agency would provide the final administrative details if Parliament approves the measure.
For now, Budget 2026 establishes the proposed direction: two existing 14-per-cent credits would become one credit, with the $6,000 calculation and 200-hour requirement retained.
The proposed direction remains subject to enactment by Parliament.
Frequently Asked Questions
What is the proposed volunteer firefighter and search-and-rescue tax credit?
It would combine the existing federal Volunteer Firefighters Tax Credit and Search and Rescue Volunteers Tax Credit into one 14-per-cent non-refundable credit calculated on $6,000.
How much could the combined credit be worth?
The maximum federal tax reduction would be $840, calculated as 14 per cent of $6,000, provided the claimant has enough tax payable to use the full credit.
Can firefighter and search-and-rescue hours be combined?
Under the proposal, eligible hours from both activities could be combined to meet the 200-hour annual service requirement.
When would the proposed change begin?
The measure is proposed for the 2027 and subsequent taxation years.
Would the credit be refundable?
No. Budget 2026 proposes to keep it non-refundable, meaning it could reduce tax owing but would not generally produce a payment when no tax is payable.
Fact-Checked: The credit amounts, 200-hour requirement, combined-hours proposal and 2027 effective date were checked against the Department of Finance Canada’s Budget 2026 tax-measures document. ([budget.canada.ca](https://www.budget.canada.ca/2026/report-rapport/tm-mf-en.html))
Disclaimer: This article describes a Budget 2026 proposal, and the final rules may change before legislation is enacted.