On November 5, 2026, Minister of Finance and National Revenue François-Philippe Champagne released the highly anticipated federal budget, titled Masters of Our Destiny.
This is essentially a “budget for builders,” focusing largely on entrepreneurship, economic independence, talent incentives, and infrastructure investment, with many of the changes aimed at simplifying Canada’s tax system.
“This budget changes the math for founders and early employees," said Lucy Hargreaves, CONNECTS 2025 speaker and cofounder and CEO of Build Canada. "A Canadian who sells a company and starts the next one now has more reason to do it here. That is how a country creates a strong innovation ecosystem and gets a generation of repeat builders to stay and build here."
INCENTIVIZING CANADIAN GROWTH
The new Canadian Growth Incentive (CGI) proposes a tax exemption for up to $15 million in capital gains on the sale of qualifying shares in Canadian businesses. The incentive may apply where the shares are issued by a Canadian-controlled private corporation (CCPC) with assets up to $100 million, including those of related corporations. This exemption has massive potential to impact many young business owners, encouraging investment, bolstering private equity, and moving Canada’s economy forward with the growth and productivity it needs.
The CGI could operate alongside the existing Lifetime Capital Gains Exemption (LCGE), although taxpayers face restrictions on claiming both exemptions in respect of shares of the same corporation.
Changes to the small business rollover could also give Canadians more scope to defer capital gains tax when sale proceeds are reinvested into Canadian small businesses.
Proposed enhancements to the Scientific Research and Experimental Development (SR&ED) tax incentive program would also further encourage innovation and accelerate the commercialization of new technologies, as well as keeping intellectual property on Canadian soil.
Some of the other measures included in Budget 2026 include:
New Income Tax Filing Deadline
Starting in 2027, individuals, including self-employed taxpayers, could have until May 15 to file their T1 returns and pay any outstanding balances.
RRSP for Life
A potentially new vehicle called “RRSP for Life” could eliminate the requirement to convert a Registered Retirement Savings Plan (RRSP) into a Registered Retirement Investment Fund (RRIF) in the year an individual turns 71. This would effectively combine the two into a single product while maintaining the existing minimum withdrawal requirements.
Higher Deposit Insurance Coverage
Ottawa plans to amend the Canada Deposit Insurance Corporation Act to increase the standard deposit insurance coverage limit from $100,000 to $250,000.
Higher Threshold for Foreign Income Reporting
For Canadians with foreign investments or property, the government is raising the threshold for filing Form T1135 from $100,000 to $200,000.
Higher Tax Instalment Threshold
For corporations and individuals outside Quebec, the quarterly tax instalment amount could rise from $3,000 to $7,500, while Quebec residents may see an increase from $1,800 to $4,500.
Expanded Intergenerational Farm and Fishing Property Rollovers
The tax-deferred rollover rules for qualifying farm and fishing property transfers are extended to a broader range of family members. In addition to children and grandchildren, eligibility may now include nieces, nephews, grandnieces and grandnephews of the taxpayer or their spouse or common-law partner.
Changes to Taxable Preferred Shares
Budget 2026 includes changes to the taxable preferred share regime that now exempts Canadian-controlled private corporations from certain taxes on qualifying dividends. The number of dividends corporations can pay before additional taxes may apply is proposed to increase from $500,000 to $1.5 million, while the income level at which this allowance starts to decrease rises from $1 million to $3 million.
Canada Creative Credit
The last measure may be of particular interest to our clients in the arts sector. Together with the basic personal amount, artists may be eligible for a personal income tax credit on up to $45,000 in annual qualifying net business income from the creation of original artistic works.
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