Tax Highlights from the 2026 Federal Budget

Tax Highlights From The 2026 Federal Budget

The federal government tabled Budget 2026 on November 5, 2026. While no changes were made to federal corporate income tax rates, the budget proposes several measures relevant to tax, retirement and estate planning:

1. RRSP for life: The government intends to consult on combining key features of RRSPs and RRIFs into a single “RRSP for life,” eliminating the requirement to convert an RRSP to a RRIF at age 71. Minimum withdrawals after age 71 would continue.
2. Canada Growth Incentive: A new capital gains exemption is proposed for qualifying shares of qualifying corporations, with a limit of up to $15 million for each qualifying individual in respect of each business, subject to eligibility requirements.
3. Small business investment rollover: The replacement-share period for qualifying dispositions of eligible small business corporation shares would generally be extended, providing more time to reinvest proceeds in another eligible small business.
4. Intergenerational farm and fishing property rollover: Eligibility would be expanded to certain transfers to nieces, nephews, grandnieces and grandnephews, effective for transfers on or after January 1, 2027.
5. Registered Disability Savings Plans (RDSPs): The temporary rule allowing a qualifying family member to become the plan holder where an adult beneficiary’s contractual capacity is in doubt would be made permanent.
6. Tax filing and instalments: The personal income tax filing and balance-due date would move to May 15 for all individuals beginning with the 2027 taxation year. The tax instalment threshold would also increase beginning with taxation years starting on or after January 1, 2028.
7. Trust distributions to non-residents: The rules preventing tax-deferred rollouts to non-resident beneficiaries would be broadened to certain indirect distributions involving corporations or partnerships with non-resident owners.
8. Canada Caregiver Credit: The credit would become refundable, allowing eligible caregivers with little or no tax liability to receive the full benefit.
9. Taxable Canadian Property: Changes are proposed to the rules for dispositions of taxable Canadian property (TCP) by non-residents, including reduced withholding rates for certain non-resident corporate vendors and simplified requirements for qualifying tax-deferred section 85 rollovers.

These are proposals and may change before being enacted. 

Our TREP team will continue to monitor developments and communicate material updates.

For more information, or to address questions in the meantime, please reach out to TREP via your CI GAM Sales team.

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