Canary Islands 2026 General Budget Law

The Canary Islands government has officially enacted the 2026 General Budget Law amidst a challenging economic landscape marked by international conflicts, global market uncertainties, and delayed Spanish budget details. Despite these hurdles, the budget demonstrates resilience, focusing on strengthening social welfare, healthcare, education, and green transition policies.

Budget Overview

• Allocates over 12.49 billion euros, representing a 6.96% increase from 2025
• Aims to maintain vital public services such as health, education, social aid, and housing
• Incorporates substantial funding from EU recovery funds

Key Highlights

• Focus on careful budget execution strategy prioritizing fiscal discipline
• Financing through social programs, infrastructure, digitalization, and climate initiatives
• Notably utilizing European Next Generation EU funds

Fiscal Rules and Regulations

• Enforces strict rules on public debt, fiscal deficit, and transparency
• Adjustments to management/regulation of universities, healthcare staff, and local governments

Important Measures

• Freezing salaries for government officials in 2026
• Restricting new hiring to urgent cases
• Implementing new provisions on contractual, pension, and tax-related policies

Tax System Modifications

• Updated rates for tobacco, fuel, and vehicle levies
• Incentives for:
  • Family housing
  • Studies
  • Employment relocation
  • Investment in local businesses

Fiscal Stability and Transparency

"The law emphasizes ensuring fiscal stability and transparency, with mechanisms for monitoring and correcting budget imbalances, and a legal framework to streamline public procurement and public-private financing."

Overall Goals

• Reinforce welfare
• Boost economic recovery
• Drive sustainable development

All within a prudent fiscal framework, critical for residents and expats navigating social, economic, and legal changes in the archipelago.