On November 5, 2026, Canada’s Finance Minister released the 2026 Federal budget (Budget 2026).
Following significant trade uncertainty in recent times, Budget 2026, titled “Masters of our Destiny”, follows themes of strengthening foundations in Canada, diversifying trade partnerships, and affordability for Canadians.
The budget forecasts a deficit of $62.3 billion for 2026-2027, with deficits projected to decrease over the next five years.
Insight:
Budget 2026 does not propose any changes to personal or corporate income tax rates. Regarding simplification of our tax system, the federal government recognizes that deeper reforms will take time and commits to a second tranche of measures to be announced in the Spring Economic Update in 2027.
The following is a summary of the individual, corporate and business tax measures, including compliance and administrative measures, that we believe are of most interest to Richardson Wealth clients.
Highlights:
Key business income tax measures
- Introduction of a Productivity Mega Deduction
- Announced in September 2026; allows businesses to immediately write off a broader range of capital assets.
- Canada Growth Incentive
- Income tax exemption on up to $15 million of capital gains from eligible dispositions of shares in qualifying Canadian businesses.
- Expansion of small business rollover rules
- Extension of the period during which replacement shares must be purchased, to benefit from a deferral of taxation on capital gains on the disposition of Eligible Small Business Corporation shares.
- Expansion of Scientific Research and Experimental Development tax incentives
- Broadens eligible expenditures to include “commercialization” and intellectual property protection expenses.
- Introduction of a corporate loss transfer rule
- Allows a transfer of current-year non-capital losses within wholly owned corporate groups, in certain circumstances.
Key personal income tax measures
- Change to personal tax filing and balance-due dates
- Proposes May 15 deadline for filing personal tax returns of all individuals, whether self-employed or not, and paying individual income tax balances due.
- Increase to threshold requiring T1135 reporting:
- Currently, where a taxpayer owns specified foreign property with a total cost greater than $100,000 during the fiscal year, Form T1135 must be filed.
- Budget 2026 proposes an increase of this threshold to $200,000.
- Increase to instalment thresholds
- For individuals and corporations resident outside Quebec, the threshold requiring instalments would increase to $7,500 (from $3,000).
- For individuals and corporations resident inside Quebec, the threshold requiring instalments would increase to $4,500 (from $1,800).
- Instalment requirements for individuals with business income
- Individuals whose primary source of income is a business may make a single annual instalment equal to two-thirds of net tax owing, due December 31.
- Previously, instalments would be required on a quarterly basis.
- Potential changes to RRSP/RRIF rules
- Consultation on a potential merger of RRSP and RRIF features to create a “RRSP for life”
- Would eliminate the requirement to convert an RRSP account to a RRIF account by age 71.
- Expansion of tax-deferred intergenerational farm transfers
- Expansion of eligibility for tax-deferred rollovers to include transfers to nieces and nephews.
