Asrani CPA, Professional Corporation

AsraniCPA Weekly Tax Brief — September 5, 2026
The key developments this week are the proposed extension of federal fuel-tax relief, new tariff-remission guidance, and CRA’s September GST/HST and excise update.
1. Federal fuel excise-tax suspension extended
Status: Proposed; legislative amendments required
On September 2, Finance Canada announced that the federal fuel excise tax suspension will be extended beyond September 7:
0¢ per litre through January 31, 2027
From February 1–March 31, 2027: 5¢ gasoline, 5.5¢ leaded aviation gasoline, and 2¢ diesel/aviation fuel
Full rates return April 1, 2027: 10¢, 11¢ and 4¢, respectively
The additional fiscal cost is estimated at $2.9 billion. Finance Canada announcement⁠�.
Affected: Trucking, delivery, construction, agriculture, food service, transportation and other fuel-intensive businesses.
Client impact: The previously anticipated September 8 fuel-cost increase should not occur if the extension is enacted. This is separate from the federal consumer carbon charge, which was eliminated earlier.
Action: Update fuel and transportation budgets, but identify the measure as proposed until the amending legislation passes.
2. Tariff-remission application process released
Status: Administrative guidance
Published: August 31, 2026
Tariffs effective: September 8, 2026
Finance Canada released the process for Canadian businesses seeking exceptional remission from the new 15%, 25% and 50% counter-tariffs.
Relief may be considered when affected inputs cannot reasonably be sourced in Canada or from non-U.S. suppliers, or where exceptional circumstances would severely affect the Canadian economy.
Applications require detailed tariff classifications, import volumes, sourcing evidence, contracts, manufacturing costs, pricing effects, employment consequences and competitor information. Only Canadian-registered companies may apply. Finance Canada remission guidance⁠�.
Affected: Importers and manufacturers dependent on affected U.S.-origin inputs.
Action: Identify clients with irreplaceable U.S. inputs and begin assembling HS codes, invoices, B3 records, alternative-supplier searches, contracts and financial-impact calculations. Remission is exceptional and should not be accrued before approval.
3. CRA publishes September GST/HST and excise update
Status: Administrative guidance
Published: September 3, 2026
CRA’s new quarterly publication confirms several items relevant to client files:
Most CRA business correspondence is now delivered through My Business Account. Correspondence is considered received when posted, even if the business misses the email notification.
Businesses wanting paper correspondence must formally request it.
GST/HST coupon-rule amendments are enacted and generally deemed effective August 16, 2025. An ITC for a coupon-redemption payment requires that the payment be made exclusively in qualifying commercial activities.
The federal fuel charge under the carbon-pricing legislation is repealed, although CRA administration provisions remain available until 2035 for outstanding compliance matters.
CRA Excise and GST/HST News No. 123⁠�.
Affected: All business-account clients; coupon issuers/redeemers and former fuel-charge registrants require additional attention.
Action: Verify client email addresses and establish a regular My Business Account/Represent a Client correspondence review. Review coupon ITCs where relevant.
4. Southern Ontario tariff assistance approaching
Status: Administrative program; expanded details due September 8
FedDev Ontario indicates that enhanced Regional Tariff Response Initiative details, including liquidity assistance, will become available September 8. FedDev Ontario program page⁠�.
Action: Prepare affected clients’ revenue history, evidence of tariff-related losses, cash-flow forecasts and project plans. Do not recognize assistance until eligibility and approval are confirmed.
No significant change this week
Payroll/source deductions: No new CPP, EI or withholding calculation change.
T1 personal tax: No material new measure.
T2 corporate tax: No material legislative or CRA filing change.
Ontario tax: No material new Ontario tax measure requiring a client alert.
Canada Gazette: The September 5 edition contains no material Income Tax Act or Excise Tax Act proposal. Canada Gazette⁠�.
Upcoming dates
September 8: New U.S.-goods counter-tariffs begin; enhanced tariff-support details expected.
September 8: CRA stops accepting Disability Tax Credit applications on versions of Form T2201 older than 2023. CRA guidance⁠�.
September 15: Third 2026 personal-tax instalment.
September 15: August source deductions due for regular monthly remitters.
AsraniCPA action checklist
Alert fuel-intensive clients that the excise-tax extension is proposed.
Screen importers for tariff exposure and possible remission applications.
Verify clients’ CRA notification emails and review online correspondence.
Prepare tariff-affected Ontario businesses for September 8 funding details.
Send September 15 instalment and payroll-remittance reminders.

AsraniCPA Weekly Tax Brief — August 29, 2026

For the seven days ending August 29, the principal new development is Canada’s tariff-response package. No material new federal or Ontario T1, T2, GST/HST, or CRA filing measure was identified.

1. New tariffs on specified U.S. goods

Status: Announced; implementation scheduled
Effective: September 8, 2026, at 12:01 a.m.

Canada announced new surtaxes of 15%, 25%, or 50% on specified U.S.-origin goods representing approximately $27.6 billion of imports. Affected categories include steel, dairy products, appliances, agricultural equipment, pulp and paper, electronics, furniture, clothing, cosmetics, and other goods.

The Finance Canada list was updated August 26. Goods already in transit when the measures take effect will be excluded; CBSA administrative instructions are still expected. Finance Canada announcement and detailed tariff-item list.

Who is affected: Canadian importers, distributors, manufacturers, retailers, restaurants, and businesses purchasing affected U.S. goods.

Why it matters: Import costs, inventory valuation, margins, pricing, and working-capital requirements may change immediately. GST on imported goods is calculated on the value including applicable duties, so the surtax can also increase GST paid at importation, although eligible registrants may recover that GST through ITCs. CRA import-GST guidance.

Client action: Identify affected HS tariff codes, confirm origin rather than supplier location, document goods in transit, and update landed-cost and cash-flow forecasts before September 8.

2. EI and workforce-retention measures announced

Status: Proposed/administrative; detailed operating rules pending

The federal government announced:

One-year extensions of the waived EI waiting period and the rule allowing EI without first exhausting separation payments;
An eight-month extension of additional benefits for qualifying long-tenured workers;
A new one-year EI measure for certain workers whose latest job loss was involuntary; and
A forthcoming Workforce Retention and Retraining Program combining EI Work-Sharing with the Worker Retention Grant, including training and administration support of up to $1,000 per participant.

Finance Canada backgrounder.

Who is affected: Tariff-affected employers considering reduced hours, layoffs, retraining, or severance arrangements.

Why it matters: These measures may provide alternatives to layoffs, but they do not currently change CPP, EI, or income-tax withholding calculations.

Client action: Flag employers experiencing reduced orders or cash-flow pressure, but wait for Service Canada eligibility and application instructions before recording a receivable or assuming approval.

3. New and expanded business financing

Status: Administrative programs; immediate or September 2026 implementation

The $7.5-billion support package includes:

An additional $1.5 billion for the Regional Tariff Response Initiative beginning in September;
Non-repayable contribution limits increasing from $1 million to $3 million;
Liquidity assistance of up to $2 million;
A new $500-million BDC lending stream offering eligible businesses loans of $250,000 to $5 million; and
BDC’s minimum annual-revenue threshold falling to $1 million for direct tariff programs.

The Canada Strong Diversification Fund was announced as effective immediately. Program details.

Client action: Ask affected clients to preserve evidence of tariff exposure, lost orders, margin compression, payroll levels, cash-flow forecasts, and proposed investments. Confirm the tax and accounting treatment only after final contribution or loan terms are available.

No significant change this week
CRA administration: No material new general filing or administrative guidance.
GST/HST: No new rate, filing, rebate, or ITC rule; only the import-GST consequence noted above.
T1 personal tax: No material new measure.
T2 corporate tax: No material new measure or federal bill advancement.
Ontario: No material Ontario tax or filing development requiring a client alert.
Canada Gazette: The August 29 edition did not contain a material Income Tax Act or Excise Tax Act regulation. Canada Gazette, August 29.
Upcoming compliance dates
August 31: Review T2 returns due for corporations with February 28, 2026 year-ends. T2 returns are generally due six months after year-end. CRA T2 deadline guidance.
September 15: Third 2026 personal-income-tax instalment. CRA instalment dates.
September 15: August source deductions for regular monthly payroll remitters. CRA payroll-remittance rules.

CRA Wins: Missing Income Can Trigger a Penalty Even When the Amount Is Small
Kryski v. The King, 2026 TCC 145

A recent Tax Court of Canada decision provides an important warning for taxpayers who accidentally leave income off their tax returns.

In Kryski v. The King, 2026 TCC 145, the Tax Court upheld a CRA penalty for repeatedly failing to report income.

The case demonstrates that a relatively modest reporting mistake can become expensive when a taxpayer has previously failed to report income.

What happened?

The taxpayer appealed a penalty imposed by CRA for her 2023 taxation year.

She was a retired chartered accountant who prepared her own income-tax returns.

The issue wasn't simply whether some income had been omitted. The important fact was that the taxpayer had also failed to report at least $500 of income in one of the previous three taxation years.

That brought the repeated-failure-to-report-income rules in subsection 163(1) of the Income Tax Act into play.

Why does the previous mistake matter?

Canada's tax rules contain a specific penalty aimed at taxpayers who repeatedly fail to report income.

Once a taxpayer has had a qualifying previous omission, another failure to report income during the prescribed period can expose the taxpayer to a penalty in addition to the underlying tax and interest.

That means what looks like a small T-slip omission should not automatically be dismissed as insignificant.

The taxpayer's position

An important aspect of the case was the taxpayer's argument concerning information CRA already possessed.

But filing a return while expecting CRA to subsequently identify and correct missing information did not protect the taxpayer from the reporting obligation.

The Tax Court ultimately upheld the penalty.

Why this matters to taxpayers

This case has practical relevance because missing slips are common.

A taxpayer might overlook:

a T4 from a short-term employer;
a T5 from an investment account;
pension income;
a T3 issued by a trust;
investment income from another institution; or
another information slip received after the return was prepared.

The danger becomes greater when the taxpayer has already had an income-reporting omission in one of the preceding three taxation years.

An important distinction

Not every missing slip automatically produces the repeated-failure penalty.

The statutory conditions must be satisfied.

Taxpayers may also have defences depending on the circumstances, including whether they exercised due diligence.

Accordingly, a CRA penalty should be reviewed rather than automatically accepted.

Practical lesson for clients

Before filing a T1 return, compare the slips provided by the client with the information available through CRA and the client's own records.

And if a client has previously received a CRA reassessment for unreported income, exercise extra caution for the following three years.

One forgotten slip can potentially create more than simply additional income tax.

Key Takeaway

CRA having information about your income does not eliminate your responsibility to report it correctly on your tax return.

The Kryski decision is a useful reminder that repeated omissions can result in penalties even where the taxpayer did not view the missing amount as significant.

For taxpayers who have previously been reassessed for unreported income, checking information slips before filing becomes especially important.

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A Quiet Federal Tax Week — But One Provincial Change Deserves Attention

Not every week produces a major CRA announcement or amendment to the Income Tax Act.

And that itself is worth recognizing.

Our review of Canadian tax developments for the week ending August 24, 2026 found no major new federal income-tax or GST/HST legislative measure requiring immediate action.

However, businesses operating in British Columbia should pay attention.

B.C. has updated guidance concerning the expansion of Provincial Sales Tax to certain engineering and geoscience services, with the new rules taking effect October 1, 2026. Businesses providing or purchasing affected professional services should review their contracts, invoicing systems and PST obligations before the implementation date.

At the federal level, Budget 2026 consultations remain open until September 8, 2026. Businesses, professional organizations and individuals can still provide recommendations to the federal government.

Our takeaway: Tax planning is not only about reacting to new legislation. Upcoming implementation dates deserve just as much attention.

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Home Builder Loses HST Case: Tax Court Looks Beyond the Claim of Personal Use
Salehi v. The King, 2026 TCC 139

Building a home and later selling it does not automatically mean the sale is exempt from GST/HST.

That lesson is reinforced by a recent Tax Court of Canada decision, Salehi v. The King, 2026 TCC 139.

The taxpayer constructed two new homes and later sold them.

CRA took the position that the taxpayer was a "builder" under the Excise Tax Act and that the sales resulted from adventures in the nature of trade.

The taxpayer disagreed.

The Taxpayer's Position

For one property, the taxpayer argued that the home had been constructed for personal use.

For the other, he maintained that he was acting as trustee for his mother rather than developing the property for resale.

If those explanations were accepted, the GST/HST consequences could have been very different.

What the Court Found

The Tax Court examined the surrounding circumstances rather than simply accepting the taxpayer's stated intentions.

It concluded that both properties had been acquired, redeveloped and sold as adventures in the nature of trade.

The taxpayer therefore met the GST/HST definition of a builder.

The sales were taxable.

A Costly Closing Certification

The second property raised another important problem.

At closing, the taxpayer certified that the sale was exempt from HST.

The Court concluded that the certification was incorrect.

Because the agreement treated any applicable HST as included in the purchase price, the taxpayer was ultimately responsible for remitting the HST that had effectively been collected.

This illustrates how wording in a real-estate agreement can have major tax consequences.

Why This Matters

CRA frequently reviews transactions involving:

Newly constructed homes.
Substantially renovated properties.
Short holding periods.
Multiple purchases and sales.
Individuals claiming that a property was originally intended as a residence.

CRA and the courts look at the entire factual picture.

Simply stating, after a sale, that a property was intended to be a personal residence may not be enough.

Practical Lessons

Before building or substantially renovating a property that may later be sold:

Determine the GST/HST consequences before construction begins.
Document the genuine purpose for acquiring and building the property.
Review the GST/HST wording in the agreement of purchase and sale.
Do not certify that a transaction is exempt unless the tax treatment has been properly confirmed.
Seek professional advice before closing.
Key Takeaway

GST/HST exposure on a newly built home can be significant—and the purchase agreement itself can determine who ultimately bears that liability.

Anyone constructing residential properties for eventual sale should address GST/HST planning before the sale is signed, not after CRA begins an audit.

Need quick tax answers? Try our new AsraniCPA Virtual Tax Assistant — available 24/7 for CRA questions, T1/T2 filing, HST, payroll and more.

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Taxpayers Win Estate-Freeze Battle Against CRA: Valuation Error Did Not Automatically Create a Taxable Benefit
Goudreau c. Le Roi, 2026 CCI 142

A recent Tax Court of Canada decision provides an important lesson for business owners undertaking estate freezes and corporate reorganizations.

In Goudreau c. Le Roi, 2026 CCI 142, the CRA challenged the value used by shareholders when they froze their interests in a private corporation and transferred future growth to family trusts.

The valuation turned out to be substantially too low.

But the Tax Court still ruled in favour of the taxpayers.

What Happened?

Three shareholders owned the common shares of a private corporation.

As part of an estate freeze, they exchanged their common shares for fixed-value preferred shares using the rollover provisions of section 85 of the Income Tax Act. Family trusts then subscribed for new common shares so that future growth in the company could accrue to the trusts.

The value assigned to the shareholders' existing shares was approximately $440,000, based on a valuation prepared by their professional adviser.

CRA later concluded that the shares were worth more than $3 million and reassessed the shareholders.

At trial, even the taxpayers accepted that the original valuation was too low. Their expert valued the shares at approximately $2.28 million.

CRA's Argument

CRA relied on paragraph 85(1)(e.2) of the Income Tax Act.

Essentially, CRA argued that the shareholders transferred property for less than fair market value and that the difference represented a benefit intended for the family trusts.

If CRA's position succeeded, substantial additional taxable capital gains could result.

Why the Taxpayers Won

The Tax Court concluded that the valuation error alone did not establish that the shareholders intended to confer a benefit.

The taxpayers had engaged a professional adviser and genuinely intended to complete the transaction at fair market value.

Importantly, their rollover agreements also contained price-adjustment clauses.

Those clauses provided that if the fair market value was later determined to be different, the consideration received by the shareholders would be adjusted accordingly.

The Court respected those contractual provisions.

As a result, the CRA's reassessments under paragraph 85(1)(e.2) were not upheld.

Why This Case Matters

Estate freezes are common planning tools for Canadian owner-managed businesses.

They can be used to:

Transfer future corporate growth to the next generation.
Introduce family trusts.
Facilitate business succession.
Manage future capital-gains exposure.
Support an eventual sale of the business.

But valuation is often one of the most difficult parts of the transaction.

This case confirms that an honest valuation mistake does not automatically mean the taxpayer intended to provide an inappropriate benefit.

Practical Lessons for Business Owners

First, obtain a supportable professional valuation when implementing an estate freeze or section 85 rollover.

Second, ensure that properly drafted price-adjustment clauses are included in the legal documents.

Third, retain valuation reports, correspondence and evidence showing that the parties genuinely intended to transact at fair market value.

And finally, remember that a price-adjustment clause is not a substitute for proper valuation work. It is a safeguard, not permission to choose an arbitrary value.

Key Takeaway

A valuation error and an intentional transfer of value are not necessarily the same thing.

The Goudreau decision is an important taxpayer victory and a reminder that well-documented intentions, professional advice and carefully drafted corporate agreements can make a major difference when CRA challenges an estate freeze.

Need quick tax answers? Try our new AsraniCPA Virtual Tax Assistant — available 24/7 for CRA questions, T1/T2 filing, HST, payroll and more.

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Canada Tax Assistant Ask AsraniCPA – Virtual Tax Assistant Welcome! Ask your Canadian tax or CRA questions below. This virtual assistant provides general information only. For personalized advice, please contact AsraniCPA directly.