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Canada Tax Update — Week Ending May 31, 2026

This week’s main tax developments affect Ontario corporations, Quebec retailers, and businesses providing services into British Columbia.

Ontario has enacted its small business corporate tax rate reduction. The Ontario small business tax rate will decrease from 3.2% to 2.2% effective July 1, 2026. Ontario CCPCs should review 2026 tax instalments, corporate tax projections, and dividend planning.

Quebec announced that certain food items and hygiene products will be zero-rated for QST purposes effective July 15, 2026. Businesses selling affected products should update POS systems, SKU-level tax settings, and invoicing procedures before the effective date.

BC has issued guidance on its PST expansion to certain professional services. Effective October 1, 2026, PST at 7% will apply to specified services including accounting, architectural, engineering/geoscience, security, and non-residential real estate services. Ontario firms with BC clients should review whether this affects registration and billing.

Individuals should also note that Finance Canada highlighted Disability Tax Credit access. For 2026, the DTC amount is $10,341, providing a federal tax reduction of up to $1,448.

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

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.

Subject: 🇨🇦 Canada Tax Update — Mid‑Year Tax Planning Opportunities Many Canadians Miss

Weekly Canada Tax Update

With tax filing season behind us, this is an excellent time for individuals and business owners to focus on mid-year tax planning rather than waiting until year-end. Many of the best tax-saving opportunities are easier to implement now than in December.

1. Business Owners Should Review 2026 Income Early

Many incorporated business owners wait until year-end to discuss compensation strategies. However, now is the ideal time to review:

Salary versus dividend planning
Corporate tax instalments
Shareholder loan balances
Capital asset purchases
Corporate investment income

Addressing these items early can provide greater flexibility and help avoid surprises at tax time.

2. CRA Is Increasing Matching Programs

The CRA continues to compare filed returns against information received from:

Employers
Financial institutions
Investment brokers
Government agencies

Taxpayers who omitted T-slips, investment income, or other reportable amounts may receive reassessments later this year.

Practical Tip

Review your CRA My Account to ensure all slips issued in your name were included on your return.

3. Self-Employed Individuals Should Track Expenses Monthly

Many sole proprietors and independent contractors struggle to reconstruct expenses at year-end.

Key records to maintain include:

Vehicle expenses and mileage logs
Home office expenses
Professional dues
Telephone and internet costs
Advertising and marketing expenses

Monthly bookkeeping can significantly reduce tax preparation costs and audit risk.

4. GST/HST Filing Errors Remain Common

The CRA continues to identify issues involving:

Missed GST/HST filings
Incorrect input tax credit claims
Unreported online sales
Marketplace and platform income

Businesses should ensure GST/HST returns reconcile with accounting records and sales reports.

5. Prepare for CRA Reviews Before They Arrive

A growing number of post-assessment reviews involve:

Medical expenses
Charitable donations
Employment expenses
Rental property deductions

Maintaining digital copies of receipts and supporting documentation can dramatically speed up the review process.

Tax Planning Reminder

The best tax strategies are usually implemented before year-end, not after. Reviewing your personal and business tax situation now may uncover opportunities to:

Reduce future taxes
Improve cash flow
Optimize compensation strategies
Avoid CRA penalties and interest
Bottom Line

This is the season for proactive tax planning. Whether you're an employee, self-employed individual, investor, or business owner, a mid-year review can help identify opportunities and prevent costly mistakes before the end of 2026.

Need quick tax answers? Try our new AsraniCPA Virtual Tax Assistant — available 24/7 for CRA questions, T1/T2 filing, HST, payroll and more. Start here: https://asranicpa.ca/tax-assistant/

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Canada Tax Update — Federal Bill C‑31 and Ontario Housing HST Relief Continue to Advance

This week’s major Canadian tax developments continue to focus on federal Budget 2025 implementation measures and Ontario’s expanded housing rebate proposals.

At the federal level, Bill C‑31 continues progressing through Parliament. The proposed legislation includes automatic filing measures for lower‑income Canadians, trust and anti‑avoidance provisions, crypto‑asset reporting measures, and temporary immediate expensing incentives for eligible manufacturing and processing buildings.

Finance Canada also provided additional implementation detail this week, particularly around automatic filing initiatives intended to increase benefit access for millions of Canadians.

Meanwhile, Ontario introduced legislation supporting implementation of expanded HST relief on eligible new homes. The proposal could provide up to $130,000 in combined federal and provincial HST relief on qualifying homes, materially affecting affordability and project economics across Ontario’s residential real estate sector.

Developers, builders, and purchasers should carefully monitor transitional rules, rebate assignment clauses, and final legislative wording before relying on the proposed relief.

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

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.

Weekly Canada Tax Update — Federal Bill C-31, Ontario Housing HST Relief, Québec SBD Rate, and B.C. PST Expansion

This week’s Canada tax update is led by four important developments.

First, the federal government introduced Bill C-31, Budget 2025 Implementation Act, No. 2. The bill includes measures dealing with automatic filing for low-income individuals, Canada Learning Bond auto-enrolment, Global Minimum Tax Act amendments, and crypto-asset reporting. These measures are still proposed and should be monitored before planning is finalized.

Second, Ontario’s enhanced HST relief for new homes remains a major implementation item. Ontario’s 2026 Budget proposes temporary relief for eligible new homes and rental units, with enhanced provincial HST relief for homes valued up to $1 million and reduced relief up to higher thresholds. Builders, buyers, and real estate lawyers should review agreements carefully and avoid assuming final rebate treatment until the implementing rules are complete.

Third, Québec increased its Small Business Deduction rate for taxation years beginning after April 29, 2026. Revenu Québec says the SBD rate rises from 8.3% to 9.3%, reducing the minimum tax rate on eligible income from 3.2% to 2.2%. Québec CCPCs should update 2026 instalment and cash-flow projections.

Finally, B.C. issued guidance on its PST expansion to selected professional services, effective October 1, 2026. Accounting, bookkeeping, assurance, architecture, engineering, geoscience, security, and non-residential real estate services are among the affected categories.

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

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.