Finance Minister François-Philippe Champagne presented the Federal Budget 2026 on November 5, 2026. The budget keeps personal and corporate income tax rates unchanged. Instead, it focuses on simplifying Canada’s tax system. The government describes this budget as the first of two packages. It plans to introduce the second in the Spring Economic Update 2027.
Several measures could affect individuals, business owners and investors.
Key Budget 2026 Highlights
- Canada Growth Incentive: Eligible individuals could claim a capital gains exemption of up to $15 million per business. The exemption applies to qualifying shares issued between Budget Day and the end of 2036.
- Productivity Mega Deduction: Businesses could permanently deduct the cost of most eligible depreciable property in the year it becomes available for use. The measure covers property acquired on or after September 15, 2026.
- One filing date for individuals: The government proposes May 15 as the filing and balance-due date for all individuals, including self-employed taxpayers. This change would begin with 2027 tax returns.
- Higher instalment threshold: The instalment threshold would increase from $3,000 to $7,500 starting in 2028.
- Optional flat amounts: Eligible taxpayers could use fixed amounts for moving, clergy residence, labour mobility, home accessibility, adoption, gluten-free food, incontinence products and service dog expenses.
- Longer objection periods: Most taxpayers would generally have one year instead of 90 days to object to an income tax assessment once the legislation takes effect.
- Higher penalties: Most fixed-dollar penalties would double or triple. Medium and large entities could also face multipliers of three and eight times.
Which Budget Measures Are Already Law?
Not every budget announcement has the same legal status.
Most measures are new proposals or earlier proposals that the government has confirmed. They will not become law until Parliament passes the required legislation and it receives Royal Assent. Many proposals would apply from Budget Day or January 1, 2027.
The government has also opened consultations on certain measures. We identify those proposals throughout this article.
One important exception concerns federal fuel excise rates. The schedule under Bill C-38, the Canadian Fuel Affordability Act, has already become law.
Business Income Tax Measures
Productivity Mega Deduction
Budget 2026 confirms permanent immediate expensing for most depreciable property acquired on or after September 15, 2026.
Businesses could deduct the eligible undepreciated capital cost in the year the property becomes available for use. The applicable limits would still apply.
The government estimates that approximately two-thirds of business capital investment will qualify. Previously, around 15% qualified.
Canadian development expenses incurred on or after September 15, 2026, could also qualify. However, certain restrictions would apply. These include successor expenses, some non-arm’s-length resource property costs and expenses renounced under flow-through agreements entered into before September 15, 2026.
Property That Does Not Qualify
The proposal excludes several types of property and assets, including:
- Class 1 and Class 3 buildings. Manufacturing and processing buildings would retain the temporary immediate expensing announced in Budget 2025.
- Property in Classes 14, 14.1 and 51.
- Timber limits, except for timber resource property.
- Industrial mineral mines.
- Certain passenger vehicles, taxis and other automobiles in Classes 10 and 10.1, particularly those used before the taxpayer acquired them or assembled outside Canada.
Other used property may qualify only if neither the taxpayer nor a non-arm’s-length person or partnership previously owned or acquired it. Certain tax-deferred transfers also affect eligibility.
Individuals and partnerships with individual members face an additional restriction. They cannot use this deduction to create or increase a loss. Their deduction cannot exceed the income from the business or property that uses the asset.
Canada Growth Incentive (CGI)
The Canada Growth Incentive introduces a new capital gains exemption of up to $15 million. Each qualifying individual can access the exemption separately for each eligible business.
Integrity rules will prevent taxpayers from multiplying the exemption through several corporations that operate the same underlying business.
The incentive applies to individuals, not trusts. An individual must:
- Remain a Canadian resident throughout the year of the claim.
- Be at least 18 years old when acquiring the shares.
- Acquire qualifying shares directly from the issuing corporation or through a partnership of which the individual was a member when it acquired the shares.
Shares held through a holding company or trust generally do not qualify. Shares purchased from another shareholder also generally fall outside the rules.
Main Share Eligibility Tests
1. Requirements when the corporation issues the shares
The corporation must issue the shares on or after November 5, 2026, and before 2037. It must qualify as a Canadian-controlled private corporation (CCPC).
The individual must receive the shares solely in exchange for cash or employment services provided to the issuing corporation.
All or substantially all of the corporation’s fair market value must relate to assets used, or reasonably expected to be used within 36 months, mainly in a qualifying business carried on primarily in Canada.
Immediately before and after issuing the shares, the combined carrying value of the corporation’s assets and those of its related corporations cannot exceed $100 million.
2. Requirements while the individual holds the shares
At least 50% of the corporation’s asset value must relate to assets used, or reasonably expected to be used, mainly in a qualifying business.
The business must operate primarily in Canada for the first 24 consecutive months after the share issue.
The individual must also hold the shares for at least 36 consecutive months immediately before selling them.
3. Requirements at the time of sale
At the time of sale, the corporation must remain resident in Canada. It must qualify as either a private corporation or a public corporation listed on a designated Canadian stock exchange.
All or substantially all of its fair market value must relate to assets used mainly in a qualifying business.
Businesses That Cannot Use the Incentive
Several types of businesses do not qualify. These include professional practices, consulting businesses, businesses that rely on employees’ reputation or skills, licensing businesses and franchise businesses.
The exclusions also cover several sectors, including agriculture, mining, financial services, real estate, and food and accommodation.
The exemption also remains subject to the 30% alternative minimum tax (AMT) inclusion, as with the Lifetime Capital Gains Exemption (LCGE).
Taxpayers cannot claim both the CGI and the LCGE on gains from the same corporation’s shares. Claiming one incentive limits access to the other. The government plans to release further integrity rules later.
Important for existing business owners: Only shares issued on or after Budget Day qualify. Shares issued before November 5, 2026, would generally remain ineligible. Proposed continuity rules may cover certain later share exchanges and reorganizations involving qualifying shares.
Business owners should obtain professional tax advice before making decisions about share structures or reorganizations.
Small Business Investment Rollover (Section 44.1)
The budget proposes a longer reinvestment period for eligible small business shares.
For dispositions made on or after January 1, 2027, individuals would have until the end of the third calendar year after the year of sale to reinvest in eligible shares. The current rules generally allow reinvestment during the year of sale or the following year.
Individuals could claim a reserve to defer the capital gain while they wait to reinvest.
The proposal also addresses agreements that provide capital upfront in exchange for shares issued later. For example, an individual who enters into an eligible agreement with a corporation, such as a SAFE, could receive an additional two years to defer the gain.
If the corporation does not issue eligible shares under that agreement by the end of the fifth year after the year of sale, the deferred gain becomes taxable.
The asset test during the holding period would also change. The corporation would need to meet the “primarily” test during that period. The stricter “all or substantially all” test would remain in place at issuance and sale.
The active business must operate primarily in Canada when the corporation issues the shares. It must continue doing so after issuance for the lesser of two years and the investor’s holding period.
If an individual never reinvests the proceeds, prescribed-rate interest would apply. It would run from the balance-due date for the year of sale until the end of the year when the gain becomes taxable.
Other Corporate Tax Measures
Budget 2026 introduces several additional changes that could affect corporations and private organizations.
Part VI.1 tax: Dividends paid by CCPCs on or after Budget Day would qualify for an exemption from Part VI.1 tax.
For other dividend payers, the dividend allowance would rise from $500,000 to $1.5 million. The reduction threshold would increase from $1 million to $3 million for taxation years ending after 2026.
Corporate loss transfers — consultation only: The government is seeking comments on a proposed joint election that would allow certain corporations to transfer current-year non-capital losses. The proposal covers transfers between a parent and its wholly owned subsidiary, or between sister subsidiaries.
Both corporations would need permanent establishments in the same single province or territory. Interested stakeholders must submit comments by January 8, 2027.
Certified corporate resolutions: Corporations would no longer need to submit certified copies of directors’ resolutions for certain elections. These include capital dividend elections made on or after Royal Assent.
EIFEL rules: Budget 2026 proposes broader exceptions under the Excessive Interest and Financing Expenses Limitation (EIFEL) rules. The changes would cover purpose-built rental housing and regulated energy utilities. They would apply to taxation years beginning on or after October 1, 2023.
Individual pension plans: The definition of an individual pension plan (IPP) would expand from January 1, 2027.
Starting January 1, 2028, the controlling individual would face RRSP- and TFSA-style taxes on non-qualified and prohibited investments, as well as advantages. Transitional rules would apply to some existing holdings.
An IPP could also face revocation if its property exceeds 200% of its actuarial liabilities for retirement benefits. This introduces a new surplus test.
The existing minimum-payment requirement would remain. It applies to certain members, surviving spouses or common-law partners who reached age 71 before the year.
The Canada Revenue Agency (CRA) would provide at least 30 days’ notice before revoking a plan’s registration. This would give the administrator time to correct the problem.
If the CRA revokes registration, the plan would pay a 10% tax on the fair market value of its property. The CRA could waive or cancel this tax. The plan would also become a retirement compensation arrangement, and a 50% refundable tax would apply to the deemed contribution after deducting the revocation tax.
The former administrator would have 90 days after revocation to file the required return and pay the 10% tax.
Private foundations: The government proposes to eliminate the excess corporate holdings regime for taxation years beginning on or after January 1, 2027. It would also extend existing public-foundation rules on acquiring corporate control to private foundations.
SR&ED and Investment Tax Credits
Budget 2026 proposes changes to several research and investment tax incentives.
Scientific Research and Experimental Development (SR&ED): For taxation years beginning on or after November 5, 2026, eligible work would expand to include certain tests, validations and studies required to obtain initial regulatory approval or certification before commercializing a product or process.
The work must directly relate to a project that already qualifies under the SR&ED rules.
Eligible costs would also include registering and maintaining intellectual property arising from qualifying SR&ED work. This could cover patents, plant breeders’ rights and software.
The supporting work must take place in Canada. Recapture rules would apply if the taxpayer later sells the intellectual property.
Clean Technology and Clean Electricity Investment Tax Credits: The government proposes to extend these credits to eligible property that becomes available for use before 2041, instead of 2035.
The Clean Technology Investment Tax Credit would remain at 15% for property that becomes available for use in 2040.
Helium exploration: From Budget Day, helium exploration and development costs would qualify as Canadian exploration expense (CEE) and Canadian development expense (CDE). The cost of acquiring helium resource properties would qualify as Canadian oil and gas property expense.
Canadian Journalism Labour Tax Credit: The government proposes to extend the 35% credit rate until the end of 2028. Qualifying audio and audiovisual news organizations could also claim the credit for eligible labour costs from Budget Day.
Mineral exploration credits: The government proposes to extend the 15% Mineral Exploration Tax Credit and the 30% Critical Mineral Exploration Tax Credit to eligible flow-through share agreements entered into by March 31, 2032.
The proposal would also add antimony as a critical mineral for agreements entered into after Budget Day.
Personal Income Tax Measures
Filing and Payment Deadlines
Budget 2026 proposes a single filing and payment deadline for individuals.
May 15 filing and balance-due date: Starting with the 2027 taxation year, all individuals would file their returns and pay any balance owing by May 15. These returns would be filed in 2028.
Under the current rules, most individuals file and pay by April 30.
Self-employed individuals and their spouses or common-law partners currently have until June 15 to file. However, they must pay their balance by April 30.
The proposed change would move their filing deadline earlier and their payment deadline later.
Higher Tax Instalment Thresholds
- From taxation years beginning on or after January 1, 2028, the government proposes to increase the instalment threshold.
- For individuals outside Quebec and corporations, the threshold would rise from $3,000 to $7,500.
- For Quebec residents, the federal tax threshold would increase from $1,800 to $4,500.
- The new thresholds would also be indexed to inflation.
Taxpayers must still consider the multi-year instalment test. Most individuals would only need to pay instalments if their net tax owing exceeds the threshold in the current year and at least one of the previous two years. Farmers and fishers would continue to follow a separate test.
Annual Instalment for Business Income
From 2028, individuals whose primary income comes from a business could make one annual instalment.
This measure would cover professional and commission income. Eligible individuals could pay two-thirds of their estimated combined federal and provincial net tax owing by December 31.
Alternatively, they could calculate the payment using the previous year’s instalment base. The proposal would bring their payment option in line with the existing rules for farmers and fishers.
Optional Flat Amounts for Selected Expenses
- Starting in 2027, eligible taxpayers could use fixed amounts instead of tracking their actual expenses for certain deductions and credits.
- The gluten-free food amount would be available from 2026.
- These flat amounts represent the deduction or expense used to calculate a credit. They do not represent the actual tax savings.
- Taxpayers must still meet the eligibility requirements and follow the existing limits.
| Deduction or credit | Proposed flat amount | Key conditions |
|---|---|---|
| Moving expense deduction | $1,000 per eligible relocation | Limited to income earned at the new location. For a move to study full-time at a post-secondary institution, the limit relates to taxable scholarship, bursary or research grant income. If one partner uses the flat amount, the other cannot claim the same relocation. |
| Clergy residence deduction | $1,000 per eligible month, up to $12,000 | Limited to remuneration. If both partners qualify and share a residence, only one can claim the flat amount for a month. If either partner uses it, neither can itemize expenses for that residence in that year. |
| Labour mobility deduction for tradespeople | $1,500 per year | Available instead of actual temporary relocation costs. |
| Home Accessibility Tax Credit | $1,000 once per lifetime | One flat claim per dwelling each year. If anyone itemizes expenses for that dwelling and year, no one can use the flat amount. Taxpayers must keep some proof. |
| Adoption Expense Tax Credit | $1,200 per adopted child | Claimed in the year the adoption is completed. Only one taxpayer can claim the flat amount for the same child. If anyone itemizes, all claimants must itemize. |
| Gluten-free food medical expense credit | $1,000 per year | Expenses must still be incurred. One claimant may use the flat amount for each person and category; otherwise, all claimants must itemize. |
| Incontinence products medical expense credit | $500 per year | The same claimant and itemization rules apply. |
| Service dog care and handler training travel | $2,000 per year | The same rules apply. Taxpayers can still claim the dog’s purchase cost separately where eligible. |
Credits and Benefits
Budget 2026 proposes several changes to federal credits and benefit programs.
Canada Caregiver Credit: Starting in 2027, the credit would become refundable. Eligible caregivers with little or no tax payable could receive the full amount for which they qualify.
The existing dependant income test would continue to apply where it does today.
Build Canada Workers Benefit: The government proposes to enhance and rename the Canada Workers Benefit.
Under the standard federal basic benefit parameters for 2027, the maximum benefit would increase to:
- $1,859 for single individuals.
- $3,143 for families.
The phase-in would begin at $500 of working income instead of $3,000.
The phase-out would start at $27,104 for singles and $30,731 for families. Provinces and territories with reconfiguration agreements could have different amounts.
The government would also reduce advance payments from 50% to 25% of the previous year’s entitlement in 2027. Advance payments would end in 2028.
One-time 2027 Canada Groceries and Essentials Benefit supplement: The budget proposes a one-time payment equal to half the maximum 2026–27 Canada Groceries and Essentials Benefit amounts.
The maximum components would include:
- $223 per adult.
- $117 per child.
- A $117 single supplement.
The payment would follow its own phase-in and phase-out rules.
For an eligible single parent, the first child would attract the adult amount. Additional children would attract the child amount.
Under the draft proposal, the government would issue the payment in January 2027. It would use 2025 tax information to determine eligibility.
Medical expense documentation: From 2026, taxpayers would no longer need a prescription for certain items used exclusively for medical purposes. These include insulin, insulin pumps and CPAP devices.
For specified items that may also have non-medical uses, medical certification would replace the prescription requirement.
The CRA could still request evidence to confirm that an expense qualifies.
Other Personal Tax Measures
Employment expenses: From 2027, commission employees could deduct travel and vehicle expenses under the general rules. They could also claim other commission expenses, subject to the existing limit of commission income.
The $1,000 or 20% cap for employed artists would be replaced with a limit equal to their artistic employment income.
Apprentice vehicle mechanics could claim one deduction for eligible new tools, reduced by the Canada Employment Credit amount. They could still claim the tradespeople’s tools deduction for tools used in another trade.
Northern residents: From 2027, the residency deduction would no longer have a 20%-of-income cap. It would also stop reducing the deduction for non-taxable board and lodging.
The travel deduction would no longer face a cap based on employer travel benefits or the $1,200 standard amount. Taxpayers could use actual costs, the lowest return airfare and the existing trip limits.
Farm and fishing rollovers: The government proposes to expand eligible family transfers. The rules would include nieces and nephews of the taxpayer or their spouse or common-law partner. They would also cover those relatives’ spouses or common-law partners and their children, including grandnieces and grandnephews.
The proposed change would apply to transfers made on or after January 1, 2027.
Volunteer credits: Starting in 2027, the volunteer firefighter and search and rescue credits would merge into one non-refundable credit. The proposed credit would equal 14% of $6,000 and would require 200 combined hours.
Registered Disability Savings Plans: The government proposes to make a temporary rule permanent. Under this rule, a parent, spouse or sibling can open and hold an RDSP for an adult whose capacity is in doubt and who has no legal representative.
Trust distributions to non-residents: The budget proposes to restrict tax-deferred rollovers of trust property. For distributions made on or after Budget Day, a trust could no longer transfer property tax-deferred to a corporation or partnership with any direct or indirect non-resident shareholder or partner.
RRSP for life — consultation: The government intends to combine the RRSP and RRIF rules. This would remove the requirement to convert an RRSP at age 71. Minimum withdrawals would still apply.
The proposal has no effective date yet. The government is accepting comments until January 8, 2027.
International Tax Measures
Higher T1135 Reporting Thresholds
Budget 2026 proposes to increase the reporting thresholds for foreign property.
Under the proposed rules, taxpayers would need to file Form T1135 only when the total cost amount of their specified foreign property exceeds $200,000 at any time during the taxation year or fiscal period. The current threshold is $100,000.
The government also proposes simplified reporting for taxpayers whose total cost amount remains below $500,000 throughout the taxation year or fiscal period. The current threshold is $250,000.
These changes would apply to taxation years and fiscal periods ending after 2026. For individuals, 2027 would be the first affected tax year.
The government estimates that approximately one-third of current T1135 filers would no longer need to submit the form.
Section 116 Rules for Corporate Vendors
For dispositions of taxable Canadian property after 2026 by a non-resident corporation, the government proposes to reduce certain withholding and remittance rates.
For ordinary capital property, the purchaser’s withholding rate would fall from 25% to 15%. The purchaser would apply this rate to the amount by which the purchase price exceeds the certificate limit, if one exists.
The vendor’s remittance for a clearance certificate would also decrease from 25% to 15%. The calculation would use the amount by which the proceeds exceed the adjusted cost base or acceptable security.
Different rates would apply to specified property, such as depreciable property.
In those cases, the purchaser’s withholding rate would fall from 50% to 30%, again on any amount above the certificate limit. The vendor’s certificate remittance would remain an amount acceptable to the CRA.
Section 85 Transfers of Taxable Canadian Property
For dispositions after 2026, the government proposes to remove withholding and remittance requirements for fully tax-deferred Section 85 transfers of taxable Canadian property.
Taxpayers would need to meet several conditions:
- File the Section 85 election within 30 days of the disposition.
- Ensure the purchaser gives the CRA the required notice.
- Ensure the purchaser makes a reasonable inquiry and concludes that the rollover means no amount from the disposition enters the vendor’s taxable income earned in Canada.
If the taxpayer later amends the election and includes an amount in the vendor’s taxable income earned in Canada, the purchaser would lose the withholding relief.
The vendor would then need to provide any required notice within 10 days after the CRA sends the resulting notice of assessment.
The purchaser would need to remit the required amount within 30 days after the end of the month in which the CRA sends that notice.
The government also proposes to extend the anti-avoidance period for later dispositions from three years to five years. The rule would also cover property that derives most of its value from the transferred or substituted property.
Common Reporting Standard — Consultation
The government is consulting on changes that would bring Canada’s Common Reporting Standard rules closer to the OECD model.
Interested stakeholders must submit comments by December 31, 2026.
Tax Administration Measures
Longer Income Tax Objection Periods
Budget 2026 proposes to give most taxpayers more time to object to income tax assessments.
For assessments sent at least three months after Royal Assent, most taxpayers, including ordinary trusts, would have one year from the date the CRA sends the notice of assessment. The current period is generally 90 days.
Individuals other than trusts and graduated rate estates would generally receive the later of:
- One year after the notice of assessment.
- Two years after the filing due date.
The current rule generally provides one year.
Certain assessments and determinations under subsection 165(1.1) would continue to follow their own one-year deadline.
However, the proposal would remove the option to extend the deadline for ordinary income tax objections. Taxpayers can currently request an extension that may add up to one year.
Extensions would remain available for specified charity objections and requests under subsection 245(6).
Although the new rules would provide more time in most cases, taxpayers must still meet the deadline. Once the ordinary income tax objection period expires, they would no longer have a way to extend it.
Higher Administrative Penalties
The government proposes to double or triple most fixed-dollar penalties. It would also adjust these amounts every five years.
The effective date would depend on the penalty. In most cases, the changes would apply to failures, elections, statements or periods after 2027.
Additional Penalties for Medium and Large Entities
Many filing penalties would use multipliers based on the size of the entity.
Medium entities would face a three-times multiplier. Large entities would face an eight-times multiplier.
For corporations, the classification would depend on taxable capital employed in Canada, combined with related corporations:
- Medium entities: More than $10 million and up to $50 million.
- Large entities: Above $50 million.
For partnerships, the thresholds would depend on gross revenue:
- Medium entities: $2 million to under $10 million.
- Large entities: $10 million or more.
CCPC, only associated corporations would count toward the calculation.
The proposal also addresses repeated failures. If the CRA penalized a taxpayer for the same type of failure during one of the previous three years, the base penalty would generally double when the taxpayer does not correct the current failure after receiving CRA notice or demand.
Examples of Proposed Penalty Increases
| Penalty | Current amount | Proposed amount |
|---|---|---|
| Late Section 85 election: monthly component | $100 per month, maximum $8,000 | $300 per month, maximum $24,000 for elections made after 2027 |
| Ordinary late-filing penalty for an information return, such as T1135 under subsection 162(7) | Greater of $100 and $25 per day, maximum $2,500 | Same base amount; three times for medium entities, maximum $7,500; eight times for large entities, maximum $20,000, for failures after 2027 |
| Minimum third-party civil penalty | $1,000 | $2,000 for statements made after 2027 |
| Gross negligence on certain foreign returns | $24,000 | $45,000 for statements or omissions after 2027 |
The gross negligence penalty applies as a fixed amount or as the minimum where a percentage-based penalty could be higher, such as in certain T1135 cases.
Other Tax Administration Changes
Budget 2026 also proposes several additional CRA measures.
Disclosure of tax debts: From Royal Assent, the CRA could report income tax and GST/HST debts exceeding $50,000 to credit bureaus.
The CRA would only do so when no objection or appeal remains possible or pending. It would also need to provide 30 days’ written notice, take reasonable collection steps and offer the taxpayer an opportunity to arrange reasonable repayment terms.
Additional CRA funding: The government plans to direct new funding toward non-filers, trust filings and pre-assessment checks on corporate refunds.
Foreign home purchases: The budget proposes to extend the ban on foreign purchases of existing residential properties until January 1, 2029. New residential properties would remain exempt.
Sales and Excise Tax Measures
Massage Therapy and GST/HST
The government proposes to add massage therapy services to the existing GST/HST health care exemption.
The measure would apply to supplies made after November 5, 2026.
The service must be provided to an individual and meet the existing qualifying health care supply rules.
The practitioner must also hold the required licence or certification in the province where they provide the service. If the province does not require a licence or certification, the practitioner must have qualifications equivalent to those required in another province.
An exemption means the service does not attract GST/HST. However, suppliers can no longer claim input tax credits for expenses related to those exempt supplies.
Cancer Therapy Devices
The government proposes to make alternating electric field therapy devices for cancer patients zero-rated.
This treatment would apply to supplies made after Budget Day.
Input Tax Credit Allocation for Financial Institutions
- Eligible large financial institutions could apply to use their own input tax credit allocation methods for three consecutive fiscal years instead of applying annually.
- The CRA could approve the method for the first year only.
- The proposal would apply to fiscal years beginning after June 30, 2027.
Cannabis Excise Stamps
Jurisdictions that adopt a common excise stamp would begin using it on January 1, 2028.
Existing stamps could still be used to enter the duty-paid market until June 30, 2029. Qualifying existing inventory could continue to be sold until December 31, 2029.
Once common-stamped cannabis enters a province’s or territory’s duty-paid market, businesses would generally be prohibited from moving it across provincial or territorial borders. Penalties would apply, subject to certain exceptions.
One exception would allow individuals to carry cannabis for personal use within federal possession limits.
The government also proposes a new penalty for unaccounted-for cannabis.
Spirits Licence Security Requirements
- For licences issued on or after Royal Assent, excise warehouse licensees holding non-duty-paid packaged spirits would need to post security.
- The required amount would range from $5,000 to $2 million per licence.
- Provinces and provincial liquor authorities would remain exempt.
Federal Fuel Excise Licensing
- The government proposes to expand access to federal fuel wholesaler licences.
- Qualifying licensed manufacturers could also apply for a payment when fuel has been taxed twice.
- Applicants would have two years after Royal Assent to apply. Several conditions would apply.
- Both the first and second tax events must have occurred on or after January 1, 2017, and before Budget Day.
Federal Fuel Excise Rates
- The federal fuel excise tax schedule under Bill C-38, the Canadian Fuel Affordability Act, is already law.
- The suspension runs until January 31, 2027.
- The government would restore 50% of the rates in February and March 2027. Full rates would return on April 1, 2027.
What Federal Budget 2026 Means for You
Federal Budget 2026 could simplify several tax compliance requirements once the government enacts its proposals. Individuals and businesses may benefit from fewer instalments, one filing date, simpler expense claims and longer objection periods.
The budget also introduces planning opportunities. These include the Canada Growth Incentive, the extended Section 44.1 rollover period and permanent immediate expensing for eligible business assets.
However, the proposed penalty increases make accurate and timely tax filings more important than ever.
Business owners and investors should review how these measures could affect their tax positions. This is particularly important if you own or invest in a growing private company, hold foreign property, manage family trusts with non-resident connections or operate an individual pension plan.
Contact ICTax at to discuss how Federal Budget 2026 could affect you or your business.
This article provides a general summary of Federal Budget 2026, tabled on November 5, 2026. Except for the federal fuel excise rate schedule under Bill C-38, which has already become law, the measures discussed are legislative proposals or consultations. They will not become law until the required legislation receives Royal Assent, and the government may change them before enactment. This article does not constitute tax advice. Please consult a qualified tax advisor about your circumstances.
