Federal Budget 2026: What It Means for Your Business and Your Taxes

The federal government released Budget 2026 on November 5, 2026. The good news: there are no changes to personal or corporate income tax rates. Most of the changes make filing simpler, help businesses invest, and add a few new credits. Here is what matters for most people, in plain language.

These are proposals. Most need to pass into law before they take effect, and details can still change.

For everyone

One deadline: May 15

Today, most people file and pay by April 30. Self-employed people and their spouses file by June 15 but still have to pay by April 30.

Under the budget, everyone would file and pay by May 15, including the self-employed. That gives most people two extra weeks to file. If you are self-employed, you would file about a month earlier than you do now.

This starts with 2027 returns, filed in spring 2028. Nothing changes for the 2026 returns you file next spring.

Fewer instalments

Right now, you must pay tax in quarterly instalments if you owe more than $3,000 when you file. From 2028, that rises to $7,500, so many people will no longer need to pay instalments at all.

Self-employed people would also have a simpler option: pay two-thirds of the year's tax in one payment by December 31, instead of four instalments through the year.

New and simpler credits

• Caregivers: from 2027, the caregiver credit becomes refundable, worth up to about $1,260 a year even if you owe no tax.
• Medical expenses: flat amounts for gluten-free food ($1,000), and from 2027 for incontinence products ($500) and service dogs ($2,000), so you would not need to keep every receipt.
• Groceries and essentials benefit: a one-time 50% top-up, paid in early 2027.
• Foreign property: you would only need to file the T1135 form if your foreign investments cost more than $200,000, up from $100,000, starting with 2027 returns.

Retirement savings

The government is asking for feedback on an "RRSP for life" that would remove the rule forcing you to convert your RRSP to a RRIF at age 71. Nothing changes yet.

For business owners and incorporated professionals

Faster write-offs for equipment

Businesses would be able to deduct the full cost of most equipment, vehicles, computers and software in the year they buy them, instead of over several years. This applies to purchases made on or after September 15, 2026. If you are planning a big purchase, talk to us about timing before your year-end. See our earlier article for more.

Instalments for corporations

From 2028, a corporation would only need to pay instalments if it owes more than $7,500 in tax, up from $3,000.

Higher penalties, more time to object

• Penalties for late or missing slips and returns, such as T4s, T5s and T5018s, roughly double or triple from 2028.
• If you disagree with a CRA assessment, you would have one year to object instead of 90 days, but no extensions.
• The CRA could report unpaid tax debts over $50,000 to credit bureaus.

What hasn't changed

The small business tax rate, tax rates on dividends, and the rules for paying yourself through salary and dividends all stay the same. For incorporated physicians, dentists and other professionals, the main things to note are the new May 15 personal deadline, fewer instalments, and filing your company's slips on time.

For specific situations

These changes affect fewer people. If one applies to you, we're happy to walk through it.

• Massage therapists: massage therapy would no longer be subject to GST/HST, for services after November 5, 2026. If you are GST registered, talk to us before you change your invoices.
• Fishing and farm families: the tax-deferred transfer of a family fishing or farm business to the next generation would also cover nieces, nephews, grandnieces and grandnephews, from 2027.
• Investing in startups: a new Canada Growth Incentive would exempt up to $15 million of gains on shares of certain new growth companies held for at least three years. Professional practices, consulting, real estate, restaurants, farming and fishing don't qualify.
• Reinvesting in small businesses: if you sell shares of a small business and reinvest in another, you would have up to three years to reinvest and defer the tax, from 2027.
• Real estate: the ban on foreign buyers of existing homes is extended to January 1, 2029.

What to do now

• Planning a large equipment or vehicle purchase? Talk to us before your year-end.
• Self-employed? Plan for a May 15 deadline for your 2027 return, instead of June 15.
• Paying instalments today? You may not need to from 2028.
• Caring for a family member? Watch for the refundable credit on your 2027 return.

We'll update this article as the rules are finalized.

Not sure how this affects you? Get in touch or call 604-689-3232, and we'll walk through what matters for your situation.