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Year-end tax planner – 2026: Helping individuals and owner-managed businesses save tax
October 27, 2026
The Year-end tax planner is designed primarily for individuals who have accumulated some wealth or own their own businesses (large or small). It includes nine year‑end tax planning checklists and several tables of useful information.
What's new?
Personal income tax rates – lowest rate decreased from 14.5% to 14% for 2026.
Tax deferral through tiered corporate structures – new rules limit tax deferral for payment of certain inter-corporate dividends in tiered corporate structures with staggered year ends, for taxation years of a dividend-paying private corporation that begin after November 3, 2025.
Accelerated capital cost allowance (CCA) deductions – Immediate expensing (i.e. 100% CCA deduction) for eligible greenhouse and manufacturing and processing (M&P) buildings that are acquired after November 3, 2025 and become available for use before 2030; new Productivity Mega Deduction provides immediate expensing for most eligible depreciable property acquired and available for use after September 14, 2026.
Transfer pricing – significant changes modernize Canada’s transfer pricing regime, effective for taxation years that begin after November 4, 2025; and new rules allow simplified transfer pricing contemporaneous documentation requirements, if certain conditions are met, for small taxpayers and partnerships, for taxation years that begin after 2025.
Trade tariffs and government support – in response to various US tariffs and bans imposed on Canadian imports to the United States, the Canadian government has imposed surtaxes on certain US-origin goods imported into Canada, and is providing government support to certain Canadian business sectors.
Corporate income tax rates
- Newfoundland and Labrador – small business rate decreased from 2.5% to 2% on January 1, 2026, then decreasing to 1.5% on January 1, 2027 and 1% on January 1, 2028.
- Ontario – small business rate decreased from 3.2% to 2.2% on July 1, 2026.
- Quebec – small business rate proposed to decrease from 3.2% to 2.2% for taxation years beginning after April 29, 2026.
Personal income tax rates
- British Columbia – lowest rate increased from 5.06% to 5.60% for 2026.
- Ontario – non-eligible dividend rates increasing in 2027.
- Prince Edward Island – new $200,000 tax bracket (with 20% tax rate), starting 2026.
- Quebec – non-eligible dividend rates proposed to increase in 2027.
British Columbia M&P investment tax credit (ITC) – a new temporary refundable M&P ITC is available for eligible M&P property acquired and available for use after March 31, 2026 and before April 1, 2036.
Research & development (R&D) – British Columbia and Saskatchewan R&D programs enhanced for taxation years beginning, and property acquired, after December 15, 2024.
Year-end tax planning checklists
Working with your PwC adviser is essential when considering the following year-end tax planning tactics. In addition to tax considerations, your financial plan should reflect investment philosophies, sound business practices and motivational goals. Owner-managers should ensure that sufficient funds are retained to meet business objectives; given the uncertainty in the economic environment, cash flow management is especially important.
On November 5, 2026, the federal government will release its 2026 budget. Please refer to our 2026 federal budget Tax Insights, which will be available at www.pwc.com/ca/budget, for details of new tax initiatives that may be relevant for you or your business.
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