Federal Budget 2026: what changes for small business owners
The federal budget was tabled on 5 November 2026. Most of it is about the national economy; a handful of measures change how owner-managed businesses file, pay and plan. This page is the short version, with a page on each measure below.
Quick answer: Budget 2026 leaves tax rates alone. Personal and corporate rates, the small business rate and the 50% capital gains inclusion rate are unchanged. What changes is timing and paperwork: the personal tax deadline moves to May 15 from the 2027 tax year, most equipment can be written off in the year it is bought, instalments start at $7,500 owing instead of $3,000, and most CRA penalties rise two to three times. None of it is law yet.
The measures that matter to a small business
| Measure | What changes | When |
|---|---|---|
| Personal tax deadline | Filing and payment both due May 15, for everyone including the self-employed | 2027 tax year (due May 15, 2028) |
| Productivity Mega Deduction | 100% write-off of most equipment in the year it is put to use, no dollar cap | Property acquired from 15 September 2026 |
| Instalment threshold | Instalments only if more than $7,500 is owing (was $3,000); one-payment option for the self-employed | Tax years starting in 2028 |
| CRA penalties | Most fixed penalties two to three times higher, indexed every five years | Tax years ending after 2027 |
| Tax debt and credit bureaus | CRA may report tax debts over $50,000 to credit bureaus | On royal assent |
| Objection deadline | 1 year to object to an assessment, not 90 days | 3 months after royal assent |
| Foreign property (T1135) | Reporting starts at $200,000, not $100,000 | Years ending after 2026 |
| Massage therapy | GST/HST exempt when supplied by a qualified therapist | Supplies after 5 November 2026 |
| Canada Growth Incentive | Up to $15 million of tax-free gains on qualifying new shares | Shares issued from 5 November 2026 |
| SR&ED | Regulatory testing and patent/IP costs become eligible | Tax years starting on or after 5 November 2026 |
What did not change
Personal tax rates and brackets, corporate tax rates, the small business deduction and its $500,000 business limit, the 50% capital gains inclusion rate and the dividend tax credit are all unchanged. CPP and TFSA limits were not part of this budget.
For you and your family
The Canada Caregiver Credit becomes refundable from 2027, the Canada Workers Benefit is enlarged and renamed, several deductions get a flat amount you can claim without receipts, the government is consulting on letting RRSPs continue past 71, and the tax-free farm transfer extends to nieces and nephews.
An example: what it means for one owner
Priya runs an incorporated landscaping company with a December year-end. In October 2026 the company buys a $60,000 excavator. Under the Mega Deduction it can deduct the full $60,000 on its 2026 return instead of spreading it over several years. Her own 2027 personal return will be due May 15, 2028 rather than April 30. And from 2028, if her personal tax owing stays under $7,500, she no longer has to make quarterly instalments.
What to do now. Nothing has to be filed differently yet. If you are planning equipment purchases, the timing now matters: the full write-off applies to property acquired from 15 September 2026 and put to use. Talk to us before you buy, not after.
Whether this applies to you depends on your year-end and structure; ask about your own situation and a CPA replies by email, usually the same business day, free.
Common questions
When was the 2026 federal budget released?+
Did Budget 2026 change tax rates?+
Are these changes law?+
Does any of this affect my 2026 tax return?+
Where this comes from
Budget 2026 was tabled on 5 November 2026. Figures on this page are from:
- Department of Finance Canada — Budget 2026: Key Measures
- BLG — Federal Budget 2026: tax measures
- RBC Wealth Management — Federal budget 2026 overview
General information, not tax advice. Budget measures are proposals until enacted and can change. Before deciding anything, send an enquiry.