Tax updates
Canadian Tax Update: October 2026
7%is the CRA's interest rate on overdue tax, CPP, EI and GST/HST from October through December 2026, compounded daily.
By HBT AccountingSources checked 3 min read
Key points
- Overdue tax costs 7% interest to year end, and the shareholder loan benefit rate is 3%
- The Spring Economic Update 2026 Implementation Act is law, including a $10,000 labour mobility deduction for 2026 and later years
- Certain bare trusts may have to file a T3 return for years ending on or after December 31, 2026
- British Columbia has paused its planned PST on accounting and other professional services
Interest rates to the end of 2026
The CRA sets its prescribed interest rates every quarter. For October through December 2026 they are:
| Rate | Applies to |
|---|---|
| 7% | Overdue income tax, CPP contributions, EI premiums and GST/HST |
| 5% | Refund interest paid to individuals and other non corporate taxpayers |
| 3% | Refund interest paid to corporations |
| 3% | Taxable benefit on interest free and low interest loans to employees and shareholders |
| 6.29% | Corporations' pertinent loans or indebtedness |
Spring Economic Update 2026 measures now in law
The Spring Economic Update 2026 Implementation Act (S.C. 2026, c. 22) received royal assent in June 2026. Three of its measures matter for 2026 planning, and one proposal from the same update is not in it:
- The labour mobility deduction for construction tradespeople is now $10,000 a year, up from $4,000, for 2026 and later years, with the distance rule shortened from 150 to 120 kilometres (section 2, amending paragraph 8(1)(t) and subsection 8(14) of the Income Tax Act). The amount is indexed for years beginning after 2026.
- The five year grace period before repaying Home Buyers' Plan withdrawals now covers first withdrawals made up to the end of 2028 (section 6, amending subsection 146.01 of the Income Tax Act).
- The employee ownership trust exemption on up to $10 million of capital gains is no longer set to end with 2026. Section 3 amends subsection 110.61(1) so that it covers dispositions after 2023 with no end date, and Finance Canada describes it as permanent.
- Streamlined disability tax credit certification for certain long lasting conditions, with more practitioners able to certify them, was proposed in the same update and is not among the measures this Act implements.
Bare trusts and T3 returns
The CRA confirmed in October that, under recent legislative amendments, certain bare trusts may need to file a T3 return with Schedule 15, Beneficial Ownership Information of a Trust, for taxation years ending on or after December 31, 2026. Bare trusts were not expected to file for 2025. Anyone holding property for someone else, such as a parent on title for an adult child or a corporation holding property as nominee, should confirm before year end whether a return will be due.
British Columbia pauses PST on professional services
British Columbia's planned expansion of PST to accounting, architectural, engineering, geoscience, non residential real estate and security services is paused. Businesses that had already registered for a PST account for those services are told to cancel it through eTaxBC.
Dates ahead
The next deadlines for most businesses and individuals:
| Date | What is due |
|---|---|
| December 15, 2026 | Quarterly tax instalment for individuals who pay by instalments |
| December 31, 2026 | Annual instalment for farmers and fishers |
| January 2027 | Digital platforms give sellers an annual copy of what they reported to the CRA, due by January 31 each year |
| March 1, 2027 | T4, T4A and T5 slips and summaries |
| April 30, 2027 | Personal returns and any balance owing |
| June 15, 2027 | Returns for self employed individuals and their spouses |
Quick answers
What is the CRA interest rate on overdue tax for late 2026?
7%, compounded daily, from October 1 to December 31, 2026. It applies to overdue income tax, CPP, EI and GST/HST.
Is the $10,000 labour mobility deduction law?
Yes. The Spring Economic Update 2026 Implementation Act (S.C. 2026, c. 22) set the limit at $10,000 for the 2026 and later tax years, up from $4,000, by amending paragraph 8(1)(t) of the Income Tax Act.
Does my bare trust need to file for 2026?
Possibly. Certain bare trusts may have to file a T3 return with Schedule 15 for taxation years ending on or after December 31, 2026. The CRA's trust reporting FAQs set out which arrangements are covered.
Related pages
Official sources
- CRA: Interest rates for the fourth calendar quarter of 2026
- Department of Finance: Spring Economic Update 2026, tax measures
- Justice Laws: Spring Economic Update 2026 Implementation Act, S.C. 2026, c. 22
- CRA: EFILE news and program updates
- CRA: Using an app or website to earn income
- Province of British Columbia: Provincial sales tax (PST)
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Important. This article provides general educational information, not legal or tax advice for a specific business. Rules, administrative policies, rates and deadlines can change. Confirm your facts and current obligations with the responsible government agency and a qualified adviser.