Budget 2026: Tax administration and predictability
Budget 2026 proposes a set of filing and compliance changes, including a single May 15 individual filing and payment date from 2027, higher instalment thresholds from 2028, and a one-year objection window. It also proposes relief on reporting and corporate paperwork and invites comments by January 8, 2027 on preferred shares and corporate loss transfers. Alongside these, it proposes higher fixed administrative penalties for taxation years ending after 2027.
Filing, payment and objection timing
A single May 15 date, new instalment rules, and a one-year objection period.
Sources
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.
Budget 2026 - Masters of our Destiny · PDF p. 400Full cited page
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.
Budget 2026 proposes to increase the threshold from $3,000 to $7,500 for corporations and individuals resident outside Quebec, and from $1,800 to $4,500 for individuals resident in Quebec. The thresholds would be indexed to inflation and rounded to the nearest $500.
Budget 2026 - Masters of our Destiny · PDF p. 400Full cited page
Budget 2026 proposes to increase the threshold from $3,000 to $7,500 for corporations and individuals resident outside Quebec, and from $1,800 to $4,500 for individuals resident in Quebec. The thresholds would be indexed to inflation and rounded to the nearest $500.
This measure would apply to taxation years that begin on or after January 1, 2028.
Budget 2026 - Masters of our Destiny · PDF p. 400Full cited page
This measure would apply to taxation years that begin on or after January 1, 2028.
Budget 2026 proposes that individuals whose primary source of income is from a business (including professional or commission income) be allowed to make a single annual instalment payment, instead of quarterly instalments. The single instalment payment would equal two thirds of their combined federal-provincial net tax owing for the year and be due by December 31. The remainder would be due on the applicable balance-due date.
Budget 2026 - Masters of our Destiny · PDF p. 400Full cited page
Budget 2026 proposes that individuals whose primary source of income is from a business (including professional or commission income) be allowed to make a single annual instalment payment, instead of quarterly instalments. The single instalment payment would equal two thirds of their combined federal-provincial net tax owing for the year and be due by December 31. The remainder would be due on the applicable balance-due date.
Budget 2026 proposes, for most taxpayers, to amend the deadline to file a notice of objection to an income tax assessment to one year after the day the notice of assessment is sent.
Budget 2026 - Masters of our Destiny · PDF p. 412Full cited page
Budget 2026 proposes, for most taxpayers, to amend the deadline to file a notice of objection to an income tax assessment to one year after the day the notice of assessment is sent.
This amendment would apply to assessments sent on or after the day that is three months after royal assent.
Budget 2026 - Masters of our Destiny · PDF p. 412Full cited page
This amendment would apply to assessments sent on or after the day that is three months after royal assent.
Reporting and paperwork
A higher T1135 threshold and the end of certified resolutions for certain elections.
Sources
Budget 2026 proposes to increase the 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.
Budget 2026 - Masters of our Destiny · PDF p. 405Full cited page
Budget 2026 proposes to increase the 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.
Budget 2026 - Masters of our Destiny · PDF p. 405Full cited page
These measures would apply to taxation years or fiscal periods that end after 2026.
Budget 2026 proposes to eliminate the existing requirements for corporations to file a certified copy of a resolution or authorization when making certain elections or agreements. This measure would apply to elections and agreements made on or after the date of royal assent of the enacting legislation.
Budget 2026 - Masters of our Destiny · PDF p. 425Full cited page
Budget 2026 proposes to eliminate the existing requirements for corporations to file a certified copy of a resolution or authorization when making certain elections or agreements. This measure would apply to elections and agreements made on or after the date of royal assent of the enacting legislation.
Dated consultations and corporate rules
Preferred share relief for private corporations and consultations closing January 8, 2027.
Sources
Exempt Canadian-controlled private corporations from the taxable preferred share regime by excluding dividends they pay from Part VI.1 tax. This measure would apply to dividends paid on or after Budget Day.
Budget 2026 - Masters of our Destiny · PDF p. 423Full cited page
Exempt Canadian-controlled private corporations from the taxable preferred share regime by excluding dividends they pay from Part VI.1 tax. This measure would apply to dividends paid on or after Budget Day.
Increase the dividend allowance from $500,000 to $1,500,000 and the threshold for the reduction of the dividend allowance from $1,000,000 to $3,000,000. This measure would apply to taxation years that end after 2026.
Budget 2026 - Masters of our Destiny · PDF p. 424Full cited page
Increase the dividend allowance from $500,000 to $1,500,000 and the threshold for the reduction of the dividend allowance from $1,000,000 to $3,000,000. This measure would apply to taxation years that end after 2026.
Written submissions may be sent by January 8, 2027 to the Tax Policy Branch, Department of Finance Canada, at consultation-legislation@fin.gc.ca.
Budget 2026 - Masters of our Destiny · PDF p. 424Full cited page
Written submissions may be sent by January 8, 2027 to the Tax Policy Branch, Department of Finance Canada, at consultation-legislation@fin.gc.ca.
Budget 2026 invites stakeholders to comment on the introduction of a corporate loss transfer rule.
Budget 2026 - Masters of our Destiny · PDF p. 425Full cited page
Budget 2026 invites stakeholders to comment on the introduction of a corporate loss transfer rule.
Interested parties are invited to send written representations to the Department of Finance Canada at clt-consultation-tpes@fin.gc.ca by January 8, 2027.
Budget 2026 - Masters of our Destiny · PDF p. 427Full cited page
Interested parties are invited to send written representations to the Department of Finance Canada at clt-consultation-tpes@fin.gc.ca by January 8, 2027.
Penalties
Inflation-adjusted and size-based fixed penalties, with effect from 2028-era periods.
Sources
Budget 2026 proposes to increase most fixed-dollar penalties to broadly account for inflation since their enactment, so that they remain meaningful and proportionate. Generally, older penalties would increase by a factor of two or three, depending on when they were enacted, while most recent penalties would remain unchanged, subject to limited exceptions. Budget 2026 also proposes to index these fixed amounts to inflation once every five years.
Budget 2026 - Masters of our Destiny · PDF p. 427Full cited page
Budget 2026 proposes to increase most fixed-dollar penalties to broadly account for inflation since their enactment, so that they remain meaningful and proportionate. Generally, older penalties would increase by a factor of two or three, depending on when they were enacted, while most recent penalties would remain unchanged, subject to limited exceptions. Budget 2026 also proposes to index these fixed amounts to inflation once every five years.
Medium corporations and partnerships would be subject to penalties equal to three times the base amounts. Large corporations and partnerships would be subject to penalties equal to eight times the base amounts.
Budget 2026 - Masters of our Destiny · PDF p. 428Full cited page
Medium corporations and partnerships would be subject to penalties equal to three times the base amounts. Large corporations and partnerships would be subject to penalties equal to eight times the base amounts.
These Income Tax Act measures would apply to taxation years or fiscal periods ending after 2027.
Budget 2026 - Masters of our Destiny · PDF p. 429Full cited page
These Income Tax Act measures would apply to taxation years or fiscal periods ending after 2027.
Analysis of cited budget provisions. Proposals and forecasts are distinguished from implemented measures.
