What’s New for Corporations in 2026: Key CRA Tax Changes Business Owners Should Know

As we move into 2026, the Canada Revenue Agency (CRA) has released a number of important corporate tax updates that may affect incorporated businesses across Canada. While not every change applies to every company, several updates are especially relevant for small and mid-sized corporations.

Here’s a clear, practical summary of what matters most — and why you should pay attention.

1. Capital Gains Increase Cancelled (Finally, Some Clarity)

After months of uncertainty, the federal government has officially cancelled the proposed increase to the capital gains inclusion rate.

What this means:

• Capital gains remain taxed at 50% inclusion

• No retroactive or future increase is coming (as of now)

• Business owners can plan asset sales, restructuring, and estate planning with confidence

This is a relief for many incorporated business owners who were delaying decisions due to uncertainty.

2. CRA Moves to Digital-Only Business Registrations

As of November 3, 2025, new CRA business number (BN) registrations and program accounts (GST, payroll, corporate tax) must be completed online.

Why this matters:

• Phone registrations are being phased out

• Seniors and non-tech clients may need assistance

• Proper authorization and documentation are now more important than ever

If you’re starting a corporation or adding CRA program accounts, professional support can save significant frustration.

3. Expanded Immediate Expensing for Manufacturing & Processing

New temporary rules allow 100% first-year write-offs for eligible manufacturing and processing buildings used primarily for business operations.

Highlights:

• Full expensing available for buildings acquired and used before 2030

• Applies only in the first year the building is put into use

• Phases out gradually after 2030

This can create substantial tax savings for qualifying businesses, including agricultural and processing operations.

4. SR&ED Tax Credit Limits Increased

The expenditure limit for earning the enhanced 35% SR&ED tax credit has increased.

Why this matters:

• More innovation costs qualify

• Higher refundable credits for eligible corporations

• Expanded opportunities for tech, R&D, and development-focused businesses

If your corporation is developing new processes, software, or products, this is worth reviewing carefully.

5. Carbon Rebate for Small Businesses Eliminated Going Forward

The Return of Fuel Charge Proceeds to Farmers Tax Credit and the Canada Carbon Rebate for Small Businesses are being phased out.

Key takeaway:

• 2024 is the final year for certain carbon rebate credits

• No ongoing rebate program should be expected

• Planning assumptions need to be adjusted

6. Provincial Corporate Tax Changes You Should Know

Several provinces have adjusted corporate tax rates and small business limits:

• Nova Scotia: Lower corporate tax rate reduced to 1.5%, small business limit increased to $700,000

• Prince Edward Island: Small business limit increased to $600,000

• Saskatchewan: 1% corporate rate made permanent

• British Columbia & Manitoba: Expanded and modified investment tax credits

If your business operates across provinces, these changes can affect where income is best earned or allocated.

7. More CRA Enforcement Tools on the Way

The CRA has introduced new rules that:

• Allow penalties for non-compliance with information requests

• Shorten timelines for providing documentation

• Pause reassessment limitation periods in some cases

This reinforces the importance of timely, accurate filings and record-keeping.

What Business Owners Should Do Next

You don’t need to act on every change — but you do need to know which ones apply to you.

Recommended next steps:

• Review your corporate structure and upcoming plans

• Confirm CRA account access and authorizations are in place

• Revisit capital investment and expensing strategies

• Ask whether provincial tax changes affect your business

Need Help Navigating These Changes?

Corporate tax rules are evolving quickly, and small missteps can be costly.

If you’re unsure how these updates affect your corporation — or want help setting up, reviewing, or optimizing your CRA accounts — professional guidance can make all the difference.

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