The Government of Canada released its 2026 Federal Budget on November 5, 2026, outlining several proposed tax changes affecting individuals, businesses, corporations and trusts.
The budget includes measures aimed at simplifying tax administration, reducing certain reporting requirements and supporting business investment.
Below are some of the key tax proposals worth noting.
Personal Income Tax Filing Deadline
One of the proposed changes would establish May 15 as the common deadline for filing personal income tax returns and paying any balance owing, beginning with the 2027 taxation year.
Currently, most individuals must file their returns and pay outstanding taxes by April 30. Self-employed individuals generally have until June 15 to file, although their tax payments are due by April 30.
Under the proposal, the filing and payment deadlines would be aligned for individuals, including those who are self-employed. This would give most individuals additional time to file and pay, while self-employed individuals would have an earlier filing deadline but more time to pay.
More Time to Object to CRA Assessments
The budget proposes extending the time available to taxpayers who wish to dispute an income tax assessment issued by the Canada Revenue Agency (CRA).
Under the proposed rules, most taxpayers would have one year from the date the CRA sends a notice of assessment to file an objection.
For individuals and graduated rate estates, the deadline would be the later of one year after the assessment is sent or two years after the applicable tax return filing due date.
The proposal would also eliminate the separate application process for extending the objection deadline.
These changes would provide taxpayers with more time to review assessments, gather supporting information and prepare objections.
Changes to Foreign Property Reporting (Form T1135)
The budget proposes changes to Form T1135, the Foreign Income Verification Statement, which applies to certain taxpayers holding specified foreign property.
The reporting threshold would increase from a total cost amount exceeding $100,000 to one exceeding $200,000. The threshold for simplified reporting would also increase from $250,000 to $500,000.
These changes are proposed for taxation years or fiscal periods ending after 2026.
If implemented, the higher thresholds would reduce reporting obligations for some taxpayers. However, those holding foreign property would still need to determine whether they meet the applicable reporting requirements.
Corporate Tax and Business Investment Measures
The budget includes several proposals affecting corporations, particularly in the areas of business investment, research and development, and tax administration.
Among these are proposed changes to the Scientific Research and Experimental Development (SR&ED) tax incentive program and certain investment tax credits intended to support qualifying business activities.
The budget also proposes a mechanism that would allow certain current-year non-capital losses to be transferred within qualifying wholly owned corporate groups operating in a single province.
These measures may be relevant to corporations undertaking research activities, making capital investments or managing related corporate entities. Their application would depend on the eligibility requirements and final legislation.
Corporate Tax Elections
The budget proposes removing the requirement to file a certified copy of a directors' resolution or authorization for certain corporate income tax elections and agreements.
This includes certain capital dividend elections.
The proposed change would apply to elections and agreements made on or after the date the legislation receives royal assent.
Although this would reduce administrative paperwork, corporations would still need to meet the applicable election requirements and filing deadlines.
Trust Distributions to Non-Residents
The budget proposes changes to the rules governing certain distributions of trust property involving non-resident ownership.
Under the proposal, the existing rules that deny tax-deferred distributions would be expanded to include certain transfers of trust property to corporations or partnerships with direct or indirect non-resident shareholders or partners.
The proposed change is intended to address situations where trust property could otherwise be transferred indirectly to non-residents on a tax-deferred basis.
These measures are proposed to apply to distributions made on or after November 5, 2026.
Tax Instalment Requirements
The budget proposes increasing the federal income tax instalment threshold from $3,000 to $7,500, with future adjustments for inflation.
The proposal would apply to individuals outside Quebec and corporations, subject to the applicable instalment rules.
The budget also proposes allowing certain individuals whose primary income comes from a business to make a single annual instalment payment under specified conditions.
These measures are proposed to apply beginning with taxation years starting on or after January 1, 2028.
If implemented, the changes could reduce instalment obligations for some taxpayers and simplify payment arrangements for qualifying individuals.
What Happens Next?
The tax measures outlined in the federal budget are proposals and are not necessarily in effect. Many will require legislative approval before becoming law, and their final details or implementation dates may change.
Taxpayers should continue to follow existing tax rules and filing requirements until any proposed changes become law.
For further information, readers are encouraged to review the official Government of Canada budget documents referenced below or consult a qualified tax professional regarding their specific circumstances.
This article is provided for general information purposes only and should not be considered tax or legal advice.
References
Government of Canada. (2026). Budget 2026 — Tax Measures: Supplementary Information.Government of Canada. (2026). Budget 2026 — Chapter 6: A More Efficient Government.