The 2026 federal budget, entitled “Masters of our Destiny,” provides important signals on how the government intends to strengthen Canada’s economy, encourage investment, and create the conditions for long-term growth amid a backdrop of economic uncertainty and evolving global trade relationships. Understanding the measures announced and their implications will be critical for businesses and individuals, to help them plan what comes next.
How will the 2026 federal budget impact Canadian entrepreneurs, individuals, and businesses?
The budget provides significant tax savings for entrepreneurs, with a proposed capital gains exemption of up to $15 million per individual invested in qualifying shares. In addition, entrepreneurs who reinvest some or all of their proceeds in a different eligible small business corporation within three years of selling their business can defer the tax on the initial sale. While the technical rules are subject to meeting certain conditions, they are intended to reward successful Canadian entrepreneurs and allow them to further invest in other Canadian small businesses. Measures to simplify tax compliance have also been added for individuals.
The budget also provides a number of key business measures requested by the tax and business communities. The SR&ED program will be expanded to include costs related to the registration and maintenance of intellectual property. Additionally, the government is inviting comments on the potential introduction of corporate loss transfer rules within a qualifying corporate group. Only minor changes to the Excessive Interest and Financing Expenses Limitation (EIFEL) rules were included, however, and do not provide any relief for small businesses.
Relatively minor changes are proposed for international and sales tax issues, including a decrease in the withholding tax on taxable Canadian property and the introduction of targeted sales tax measures. The government is also requesting feedback on potential measures to strengthen Canada’s integration with the international Common Reporting Standards.
These are only a few of the highlights of the 2026 federal budget. A more detailed analysis of key measures related to business, personal, and international tax measures can be found below.