Budget 2026: What investors need to know

On Budget Day, Thursday November 5, 2026, Minister of Finance and National Revenue François-Philippe Champagne tabled the Liberal government’s 2026 Federal Budget in Parliament, entitled “Masters of Our Destiny”.

This summary was prepared by Aviso Tax and Estate Specialist Doug Carroll, who attended the media lockup as expert guest to Personal Finance Journalist Erica Alini of The Globe and Mail.

It highlights provisions relevant to savings, investment and financial planning of individuals, families and small businesses.

Note that a Budget is a statement of the governing party’s intention. Until passed into law, its content is to be considered as proposals.

Registered Retirement Savings Plan

“RRSP for life”

Budget 2026 announces the government’s intention to merge the core features of the RRSP and RRIF under the Income Tax Act into a single “RRSP for life,” and make other changes to improve and modernize the RRSP tax rules. This would eliminate the need for individuals to convert their RRSP to a RRIF at age 71. Individuals over the age of 71 would continue to be required to make minimum withdrawals.

Consultation

The government is seeking Canadians’ views on this proposal. Interested parties are invited to send written representations to the Department of Finance Canada at RRSP-consultation-REER@fin.gc.ca by January 8, 2027.

Tax filing matters

Income tax return filing and balance-due dates for individuals

The Income Tax Act requires most individuals to file their T1 income tax return and pay any balance owing by April 30 following the end of the taxation year. Self-employed individuals and their spouses or common-law partners have until June 15 to file their returns, although any balance owing remains due by April 30.

Budget 2026 proposes to change the T1 filing and balance-due dates to May 15 for all individuals, including self-employed individuals and their spouses or common-law partners.

These measures would apply to the 2027 and subsequent taxation years.

year an adoption is completed, instead of their actual eligible adoption expenses.

Lump-sum thresholds for periodic payment of benefits

The Canada Child Benefit (CCB) and Canada Groceries and Essentials Benefit (CGEB) (formerly the GST Credit) provide targeted, income-tested support to eligible individuals and families through regular payments. These are based on a July 1 to June 30 benefit year. For individuals and families entitled to small payment amounts under the CCB, CGEB and Advance Canada Workers Benefit (CWB) in a given benefit year, the Income Tax Act specifies that the annual entitlement be issued as a lump sum, rather than regular payments throughout the year.

Budget 2026 proposes to increase the lump-sum payment threshold to $50 per month for the CCB, $70 per quarter for the CGEB and, for the 2027 taxation year only, $70 per payment for the Advance CWB. This measure would apply to benefits paid after June 2027.

Budget 2026 also proposes to index the CCB and CGEB thresholds annually to inflation, rounded to the nearest $5, as of July 2028.

Household finances

2027 Canada Groceries and Essentials Benefit (CGEB) supplement

Formerly the Goods and Services Tax (GST) Credit, the CGEB provides relief to low- and modest-income individuals and families in the form of a non-taxable, income-tested benefit payment that is indexed to inflation. For the 2026-27 benefit year (July 1, 2026, to June 30, 2027), the maximum annual CGEB amounts are $445 per adult, $234 per child and $234 for the single supplement.

Budget 2026 proposes to deliver a one-time CGEB supplement in early 2027, equal to half of the maximum annual CGEB amounts for the 2026-27 benefit year. Accordingly, the maximum amounts of this supplement would be $223 per adult, $117 per child and $117 for the single supplement.

Deposit insurance

Budget 2026 announces the government’s intention to modernise the deposit insurance framework by amending the Canada Deposit Insurance Corporation Act, including to increase the deposit insurance limit to $250,000, provide temporary high-balance coverage for certain life events, such as the sale of a home, and remove the limit for eligible deposits in registered and tax-free accounts. No further specifics or timeline were provided.

Workers

Build Canada Workers Benefit

The Canada Workers Benefit (CWB) is a refundable tax credit that supplements the earnings of low- and modest-income workers and improves incentives to work. Under current law, individuals who received the CWB for the previous taxation year are automatically entitled to receive the Advance CWB for the current taxation year, totaling half of the previous year’s CWB entitlement.

For the 2027 taxation year, Budget 2026 proposes to reduce the Advance CWB from 50% to 25% of the individual’s CWB entitlement for the 2026 taxation year. The Advance CWB would be eliminated beginning in the 2028 taxation year.

Enhancing the Benefit

Budget 2026 proposes to enhance the CWB and rename it the Build Canada Workers Benefit (BCWB). For the 2027 taxation year, the enhanced benefit would:

• Reduce the phase-in threshold to $500
• Increase the maximum benefit to $1,859 for single individuals without children and to $3,143 for families
• Adjust the phase-out thresholds to $27,104 for single individuals without children and to $30,731 for families, so that the higher maximum benefits do not change the income levels at which the entitlement is fully phased out

The BCWB would retain the supplement for individuals eligible for the Disability Tax Credit. The phase-in threshold of the BCWB disability supplement would be reduced to $200 (down from $1,150 under the CWB). BCWB parameters would be indexed in the same manner as those of the CWB for years after 2027.

These measures would apply to the 2027 and subsequent taxation years.

Volunteer Firefighters and Search and Rescue Volunteers Tax Credit

The Volunteer Firefighters Tax Credit and the Search and Rescue Volunteers Tax Credit are each 14% non-refundable tax credits calculated on an amount of $6,000. An individual who performs a combined total of at least 200 hours of eligible services as either a volunteer firefighter or as a search and rescue volunteer in the year may claim either credit, but not both.

Budget 2026 proposes to combine the Volunteer Firefighters Tax Credit and the Search and Rescue Volunteers Tax Credit into a single 14% non-refundable Volunteer Firefighters and Search and Rescue Volunteers Tax Credit calculated on an amount of $6,000. Eligible volunteer firefighter and search and rescue services would both count towards the 200-hour requirement for the combined credit.

This measure would apply to the 2027 and subsequent taxation years.

Deductibility of expenses against commission income

Budget 2026 proposes to eliminate the rules that prevent commission employees from deducting travel and motor vehicle expenses under the general employee provisions when they also claim expenses under the commission-employee rules. This would allow a commission employee claiming travel or motor vehicle expenses under the general provisions to additionally claim other employment expenses as a commission employee up to the amount of their commission income.

This measure would apply to the 2027 and subsequent taxation years.

Deductibility of expenses by employed artists

Employed artists are permitted to deduct expenses incurred in the course of employment in specified artistic activities. The deduction is generally limited to the lesser of $1,000 and 20% of the artist’s employment income for the year from specified artistic activities.

Budget 2026 proposes to replace the existing cap on the deduction with a limit equal to the amount of the artist’s employment income for the year from the specified artistic activities.

This measure would apply to the 2027 and subsequent taxation years.

Apprentice vehicle mechanics’ tools deduction

Apprentice vehicle mechanics may claim the deduction for tradespeople's tool expenses in respect of their tools and may additionally claim the apprentice vehicle mechanics' tools deduction on the extraordinary portion of their tool costs. These rules require apprentice mechanics to claim two separate deductions to get the maximum eligible tax recognition for their tool expenses.

Budget 2026 proposes to allow apprentice vehicle mechanics to deduct all eligible expenses under the apprentice vehicle mechanics' tools deduction.

This measure would apply to the 2027 and subsequent taxation years.

Small business

Canada Growth Incentive

Budget 2026 proposes to introduce a new Canada Growth Incentive (CGI) capital gains exemption which would allow a Canadian-resident individual to claim a tax exemption on capital gains realized on the disposition of qualifying shares of a qualifying corporation, up to a $15-million limit. This $15 million would apply separately to each qualifying individual in respect of each business.

A qualifying business would be an active business, but not most consulting/professional services, certain listed sectors, or businesses operating under a licensing or franchising agreement.

A CGI exemption claim would limit an individual’s ability to claim the Lifetime Capital Gains Exemption (LCGE) for a sale of shares of the same corporation. Similarly, a LCGE claim would limit the availability of the CGI.

This measure would apply in respect of qualifying shares of a qualifying corporation issued on or after Budget Day and before 2037.

Rollover for investments in small businesses

Under the Income Tax Act, individuals are allowed to defer taxation on capital gains realized on a qualifying disposition of eligible small business corporation (ESBC) shares to the extent that proceeds from the disposition are used to acquire replacement ESBC shares in the year of disposition or the following calendar year.

Budget 2026 proposes changes to the three conditions to qualify for this deferral

• Holding period – The period to acquire replacement shares would be extended to encompass the year of disposition and the three following calendar years.
• Active business requirement – The asset test is proposed to be lowered from “all or substantially all” to “primarily” for the active business requirement that must be met throughout the period during which the individual owned the shares. However, the “all or substantially all” threshold would need to be met at the time of issuance and disposition of the shares.
• Canadian activity – Finally, the active business would be required to be carried on primarily in Canada at the time of share issuance and for a continuous period immediately following issuance. That period would be the lesser of two years and the period during which the individual owned the shares.

These measures would apply to qualifying dispositions that occur on or after January 1, 2027.

Expansion of the intergenerational farm and fishing property rollover

The Income Tax Act allows for a tax deferral (“rollover”) of capital gains on intergenerational transfers of certain farming property and fishing property from a taxpayer to the taxpayer’s child or the child’s spouse or common-law partner. For these purposes, a child includes the taxpayer’s grandchild or great-grandchild.

Budget 2026 proposes to expand the rollover so that it is available for transfers to a niece, nephew, grandniece, or grandnephew of the taxpayer or the taxpayer’s spouse or common-law partner.

This measure would be effective for transfers that occur on or after January 1, 2027.

Registered Pension Plans (RPPs) and Individual Pension Plans (IPPs)

If the conditions for registration of a Registered Pension Plan are not met, the plan becomes a “revocable plan” and the CRA may ultimately issue a notice to the administrator of the plan that its registration is revoked. The tax consequences of a revocation are not fully specified under the current rules.

Revocation of a Registered Pension Plan

Budget 2026 proposes to provide express tax consequences under the Income Tax Act and Income Tax Regulations where the CRA revokes the registration of an RPP, including that:

• A revoked plan would be liable to pay a special tax equal to 10% of its fair market value
• A revoked plan would be deemed to become a “retirement compensation arrangement” (RCA)
• The revoked plan as an RCA would be required to remit a 50% refundable tax

IPP status

IPPs are subject to additional conditions that do not apply to other RPPs. However, some plans seek to avoid these conditions by adding related members so that the plan exceeds the three-member threshold for IPP status.

Budget 2026 proposes to expand the IPP definition to include defined benefit RPPs under which all members are either related to a participating employer or do not deal at arm’s length with any member related to a participating employer.

This measure would apply as of January 1, 2027.

Non-qualified investments

Budget 2026 proposes to subject IPPs to the same advantage rules, non-qualified investment rules, and prohibited investment rules that currently apply to other registered plans of controlling individuals.

This measure would apply as of January 1, 2028.

Excessive surplus for IPPs

Some IPPs have modest or no ongoing contributions and relatively stable liabilities. As a result, asset growth can result in excessive surplus that is not needed to satisfy pension benefits. The current rules do not require this surplus to be withdrawn, and income earned from such surplus is tax sheltered while held in the IPP.

Budget 2026 proposes to impose a new condition that an IPP must satisfy to maintain its RPP registration. If the value of an IPP’s assets exceeds 200% of its pension liabilities, the plan would become a “revocable plan” for RPP registration purposes.

This measure would apply as of January 1, 2028.

Investments

Flow-through shares

Flow-through shares allow corporations to renounce or "flow through" certain exploration and development expenses to investors, who can deduct the expenses in calculating their own taxable income. The Mineral Exploration Tax Credit (METC) and the Critical Mineral Exploration Tax Credit (CMETC) are both set to expire on March 31, 2027.

Budget 2026 proposes to extend eligibility for the METC and CMETC for five years, to flow-through share agreements entered into on or before March 31, 2032. It also proposes to expand the CMETC to include antimony as an eligible critical mineral. These measures would apply to expenditures renounced under eligible flow-through share agreements entered into after Budget Day and on or before March 31, 2032.

Foreign Income Verification Statement – Form T1135

Canadian-resident individuals, corporations and trusts, as well as certain partnerships, must file a Foreign Income Verification Statement (Form T1135) with the Canada Revenue Agency if they own specified foreign property with a total cost of more than $100,000.

Budget 2026 proposes to increase the dollar threshold above which Form T1135 must be filed from $100,000 to $200,000. The Canada Revenue Agency would also increase the threshold for simplified reporting from less than $250,000 to less than $500,000.

These measures would apply to taxation years or fiscal periods that end after 2026.

Scholarship, fellowship, and bursary income

An individual can claim a full or partial tax exemption for scholarship, fellowship, and bursary income connected with enrolment in an elementary or secondary school educational program or a program in respect of which the individual is a qualifying student. Under current rules, a program generally does not qualify if the student receives financial assistance for it from an arm’s-length person, such as an employer.

Budget 2026 proposes to allow a program to qualify even where a student received financial assistance from an arm’s-length person.

This measure would apply to the 2027 and subsequent taxation years.