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.
Sources checked October 20263 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 proposals, including a larger labour mobility deduction, are not yet law
- 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 proposals still pending
Several proposals from the spring would apply to the 2026 tax year if passed, so they matter for planning now:
- The labour mobility deduction for construction tradespeople would rise from $4,000 to $10,000 a year from 2026, indexed after that, with the distance rule shortened from 150 to 120 kilometres.
- The five year grace period before repaying Home Buyers' Plan withdrawals would be extended to first withdrawals made up to the end of 2028.
- The employee ownership trust exemption on up to $10 million of capital gains, now set to end with 2026, would be made permanent.
- Disability tax credit applications would be streamlined for certain long lasting conditions, with more practitioners able to certify them.
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 31, 2027 | Digital platforms send sellers a copy of what they reported to the CRA |
| 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?
Not yet. It was proposed in the Spring Economic Update 2026 for the 2026 and later tax years. Until it is enacted, the limit in force is $4,000.
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
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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.