2026 Federal Budget Commentary

Dear Clients,

On November 5, 2026, the Federal Government tabled Budget 2026, which proposed various provisions impacting individuals and businesses.

Some of the items of interest include the following:

• Individual tax deadlines – The filing and payment deadlines for all individuals, including those who are self-employed, would move to May 15, starting with the 2027 taxation year.
• Capital gains exemption (Canada Growth Incentive) – A new exemption of up to $15 million per qualifying individual for each qualifying business would be available, subject to restrictive eligibility conditions.
• Foreign property reporting – The cost threshold for filing Form T1135 would increase from $100,000 to $200,000, with the simplified reporting threshold increasing to $500,000.
• Tax penalties – Various fixed-dollar tax penalties would increase and be indexed, with higher penalties for medium and large corporations and partnerships and certain repeated failures.
• Further tax simplification – The government would consult on corporate loss transfers within wholly owned groups, an “RRSP for life” and broader changes to the preferred share tax regime.