Federal budget 2026 proposes changes to taxes and benefits

The federal budget tabled on November 5, 2026 proposes a second grocery benefit top-up and a wider tax-deferred farm transfer rollover, and confirms a previously announced immediate write-off for eligible business equipment. It proposes no changes to personal or corporate income tax rates. Most of the measures wouldn't start until 2027 or later, but three are worth acting on now.

This article focuses on the proposals most likely to affect individuals and business owners, the three worth acting on now, and the deadlines that apply in spring 2027.

⚠️ IMPORTANT DISCLAIMER:
THE MEASURES IN THIS ARTICLE WERE PROPOSED IN THE FEDERAL BUDGET TABLED ON NOVEMBER 5, 2026. THEY ARE NOT LAW UNTIL LEGISLATION IS PASSED BY PARLIAMENT AND RECEIVES ROYAL ASSENT, AND DETAILS MAY CHANGE BEFORE THEN. UNTIL A CHANGE TAKES EFFECT, CURRENT CRA RULES AND DEADLINES STILL APPLY.

What are the key proposals?
What else is proposed for individuals?
What else is proposed for businesses?
What should I act on now?
Is my tax deadline changing this spring?
Are these changes in effect yet?

What are the key proposals?

These are the proposals most likely to affect individuals and business owners.

What else is proposed for individuals?

Beyond the key proposals, a few smaller changes could affect your return. Most would apply from the 2027 tax year, which you'd file in spring 2028.

Flat-rate claims

You could claim optional flat amounts instead of tracking actual costs, such as $1,000 for moving for work or school, and $1,500 a year for eligible construction tradespeople and apprentices who temporarily relocate for work. Anyone whose actual costs are higher could still claim them, so keeping receipts still makes sense.

Foreign property reporting

Form T1135 would only be required once foreign property, such as U.S. stocks held outside an RRSP or TFSA, has a total cost of more than $200,000 at any time in the year, up from $100,000. This would apply from the 2027 tax year, so it would first affect returns filed in spring 2028.

Unpaid tax debts

Once the law passes, the CRA could report tax debts over $50,000 to credit bureaus, but only under certain conditions, including that objection and appeal rights have run out.

The 2026 medical expense changes could affect 2026 returns filed in spring 2027, but only if the legislation passes in time.

The budget also proposes an expanded workers benefit, a longer window to file a notice of objection and a consultation on merging RRSP and RRIF rules, and it funds a national heat pump rebate for homeowners, with details still to come. More detail is in Chapter 6 of the budget.

What else is proposed for businesses?

The equipment write-off and the farm rollover are the business measures with timing to consider now, covered in the next section. A few other proposals matter for specific types of business.

GST/HST on massage therapy

Qualifying massage therapy services supplied after November 5, 2026 would be exempt from GST/HST. Eligibility would depend on the therapist meeting provincial licensing or equivalent qualification requirements. That matters in Alberta, where massage therapy isn't a provincially regulated profession, unlike in BC. Exempt services don't carry GST/HST, so therapists also couldn't claim input tax credits on costs related to them. Until the change becomes law and the CRA explains how it will work, the current GST/HST rules still apply, so it's worth talking to us before changing how you bill.

Scientific Research and Experimental Development (SR&ED)

For tax years beginning on or after November 5, 2026, the program would also cover certain regulatory certification costs and costs of protecting intellectual property, where they relate to eligible SR&ED work. This matters for technology and manufacturing businesses bringing new products to market.

The budget's headline business measure, a capital gains exemption of up to $15 million called the Canada Growth Incentive, is aimed at investors in newly issued shares of growing companies. It excludes professional practices, consulting, farming, real estate, and food and accommodation businesses, and has detailed conditions on the shares, the company and how long the shares are held, so eligibility would need a case-by-case review. The budget also proposes a longer small business rollover window, higher administrative penalties and a few technical changes for corporations.

What should I act on now?

Three of the proposals have timing that matters before year-end or before you file your 2026 return.

Time business equipment purchases

The proposed Productivity Mega Deduction would let businesses write off 100% of eligible equipment in the year it becomes available for use. Buying an asset in December only helps for 2026 if it's actually available for use before your year-end. For individuals, including sole proprietors, and partnerships with individual members, the deduction can't be used to create or increase a loss, and a full write-off isn't always the best choice in a lower-income year.

File your 2025 tax return

The budget proposes a one-time Canada Groceries and Essentials Benefit supplement (the benefit that replaced the GST/HST credit), paid in early 2027. It would be worth up to half of the maximum benefit for the current July 2026 to June 2027 benefit year, which is based on your 2025 tax return. If you haven't filed your 2025 return yet, filing it lets the CRA check whether you're eligible.

Payment announcements tend to bring scam texts and emails. The CRA doesn't ask for personal or banking information by text message, so it's best not to click links in unexpected messages about this payment.

Check the timing of a farm transfer to a niece or nephew

Farmers and fishers can currently transfer qualifying property to a child or grandchild on a tax-deferred basis. The budget proposes extending this to nieces, nephews, grandnieces and grandnephews of the owner or their spouse or common-law partner, for transfers on or after January 1, 2027. A transfer to one of these relatives planned for December 2026 would fall under the current rules, so it's worth reviewing the timing before signing anything.

Is my tax deadline changing this spring?

No. The proposed May 15 deadline would first apply to the 2027 tax year, filed in spring 2028. Your 2026 return, filed in spring 2027, keeps the current deadlines.

Until then, most individuals file and pay by April 30. Self-employed individuals and their spouses or common-law partners file by June 15, but any balance owing is still due April 30.

EXAMPLE Self-employed individual

2026 tax year File by June 15, 2027 and pay any balance owing by April 30, 2027
2027 tax year File and pay by May 15, 2028, if the proposal becomes law

Are these changes in effect yet?

Not yet. A federal budget is a set of proposals. Each measure becomes law only once Parliament passes the legislation and it receives Royal Assent, and details can change along the way.

Some proposals are written to apply from a date that has already passed, though. The equipment write-off would apply to property acquired on or after September 15, 2026, and the massage therapy exemption to qualifying services supplied after November 5, 2026. Decisions made now could be affected once the legislation passes, which is why a few are worth planning around today.

A summary of key measures is in the Budget 2026 Key Measures backgrounder, and the full budget and detailed tax proposals are on the Budget 2026 website.

Questions?

If you have any questions about this article, need help planning around the federal budget proposals, or just want to know more about the services we offer, please contact one of our Tax Experts or complete the contact form below.