The 2026 federal budget proposes new incentives for business investment, simpler filing rules and several new credits for individuals. It does not raise personal or corporate tax rates.
Please keep one thing in mind as you read: everything below is a proposal. None of it is law yet. Measures can change, be delayed or be dropped as they go through draft legislation and Parliament. We don't yet know which ones will be implemented, or in what final form. Our advice is to understand what's coming but not to act on any of it until the rules are final.
Proposed measures for business owners
• Productivity Mega Deduction. A permanent 100% first-year write-off for most equipment and other depreciable property acquired and available for use after September 14, 2026. Buildings, most passenger vehicles (new Canadian-assembled vehicles would qualify) and property bought from related parties would be excluded. Draft legislation has been released, but it has not passed.
• Canada Growth Incentive capital gains exemption. A separate exemption of up to $15 million on gains from qualifying new shares of Canadian-controlled private corporations, issued before 2037. There would be asset limits, a holding period, and a long list of excluded sectors, including consulting, real estate, finance, agriculture and food and accommodation. This is not an increase to the regular lifetime capital gains exemption.
• SR&ED expansion. About $930 million to extend the program to some commercialization costs (testing, validation, regulatory studies) and to patent and copyright costs for eligible projects. Details and start dates are still to come.
• Small business share rollover. More time to reinvest proceeds from selling eligible small business shares without immediate tax, proposed to start January 1, 2027.
• Less paperwork. Corporations would no longer need to file a certified director's resolution with certain tax elections. Rules to let corporate groups share losses are only at the consultation stage.
Proposed filing and administration changes
Several proposals would simplify deadlines and reporting. Until they are law, current rules and deadlines still apply.
• Personal filing and payment deadline: May 15 for everyone, instead of April 30 (June 15 filing for the self-employed). Proposed start: 2027 returns, filed in 2028.
• Form T1135 foreign property filing: required only over $200,000, up from $100,000. Proposed start: years ending after 2026.
• T1135 simplified reporting: available under $500,000, up from $250,000. Proposed start: years ending after 2026.
• Quarterly instalment threshold (outside Quebec): $7,500 of net tax owing, up from $3,000. Proposed start: years starting 2028.
• Notice of objection deadline: one year after assessment (longer for some individuals). Proposed start: after Royal Assent.
Other proposals include a single annual instalment option for self-employed individuals from 2028, inflation-indexed penalties, and allowing the CRA to report tax debts over $50,000 to credit bureaus once appeal rights are exhausted.
Proposed personal and family measures
• Groceries and essentials benefit: a one-time 50% top-up, payable in early 2027.
• Caregiver credit: the Canada Caregiver Credit would become fully refundable from 2027, worth up to $1,260 a year.
• Simpler claims: flat-rate options from 2027 for moving expenses ($1,000), the home accessibility credit ($1,000 lifetime) and the labour mobility deduction for tradespeople ($1,500 a year).
• New medical expense items: service dog costs, incontinence products and the extra cost of gluten-free food, with set amounts.
• "RRSP for life": the government is only consulting on letting RRSPs continue past age 71 without converting to a RRIF. Submissions are due January 8, 2027.
What to do now
For most people, the right move is to wait. Keep filing and paying on today's deadlines, and don't build a purchase, share sale or restructuring around a proposal that may change or never become law. If you're already planning a large equipment purchase or a business sale, talk to us first so we can plan for both outcomes: the rules passing as proposed, or not.
We're watching each measure as it moves through Parliament. To talk through how the budget might affect you, request an appointment or call 1-877-319-4111.
This article is general information only and is not tax or legal advice. The measures described are budget proposals as of November 6, 2026; they are not law and may change or not be implemented. Speak with a qualified professional about your situation.
Sources
• Department of Finance Canada, Budget 2026 and Budget 2026 key measures backgrounder
• KPMG Canada: New investment deduction expands immediate expensing (September 2026)
