Fall 2026 Tax Update
There have been several recent tax announcements that may impact individuals and businesses in both British Columbia and Alberta. Here are a few of the key updates we are watching.
Federal Tax Updates
Proposed Productivity Mega Deduction
The federal government recently announced the proposed Productivity Mega Deduction, which would allow businesses to immediately deduct 100% of the cost of most depreciable capital assets acquired on or after September 15, 2026, rather than claiming Capital Cost Allowance (CCA) over several years.
There are some exclusions, including certain buildings, intangible assets such as goodwill, and certain vehicles.
The proposal has not yet been enacted into law, so we will continue to monitor its progress. If you are considering a significant capital purchase, please reach out to us to discuss how the proposed rules may impact the timing of your purchase.
Bare Trust Reporting Returns for 2026
The rules surrounding bare trust reporting have changed again. Bare trusts are not required to file a T3 return for the 2025 taxation year; however, certain bare trusts will be required to file a T3 Trust Income Tax and Information Return and Schedule 15 for taxation years ending on or after December 31, 2026.
Bare trust arrangements can arise when one person or corporation holds legal title to property on behalf of another person. There are several exemptions under the new rules, so each arrangement will need to be reviewed individually.
British Columbia Tax Updates
B.C. Pauses PST on Professional Services
Good news for B.C. businesses: the Province has paused the planned expansion of PST to professional services, which was originally scheduled to take effect October 1, 2026.
The proposed change would have applied 7% PST to services including accounting and bookkeeping, security services, and certain architectural, engineering and commercial real estate services. The Province announced on September 18, 2026 that the expansion would be delayed, with no new implementation date currently set.
New B.C. Manufacturing & Processing Investment Tax Credit
B.C. has introduced a new refundable tax credit for eligible Canadian-controlled private corporations (CCPCs) investing in manufacturing and processing operations in the province.
The credit is equal to 15% of qualifying investments in eligible buildings, machinery and equipment, on up to $2 million of eligible expenditures, for a maximum credit of $300,000. The 15% rate applies to eligible expenditures incurred after March 31, 2026 and before April 1, 2031.
If your business is involved in manufacturing or processing and is planning a significant capital investment, please contact us to determine whether the new credit may apply.
Alberta Tax Updates
Alberta Corporate Tax Correspondence Moving Online
Effective April 1, 2026, online mail became the default delivery method for most Alberta corporate income tax correspondence for corporations with a TRACS account, corporations that have authorized a third-party representative, and newly incorporated Alberta corporations.
This includes documents such as notices of assessment and reassessment. Alberta businesses should ensure they are monitoring their TRACS account so that important tax correspondence is not missed.
Alberta's corporate income tax rates remain 8% for general corporate income and 2% for eligible small business income.
Planning a Major Business Purchase?
With the proposed federal immediate-expensing rules and new provincial incentives available, the timing and structure of significant business purchases may have important tax implications.
If you are considering purchasing equipment, vehicles, buildings or other significant capital assets, we recommend speaking with us before completing the purchase so we can review the available tax incentives and deductions.
The information above is general in nature and should not be considered tax advice. Tax rules and proposed legislation are subject to change.
