Key Income & Benefit Enhancements Worth Knowing
- Lower first federal rate: Since July 1, 2025, the lowest federal tax rate dropped from 15% to 14%, benefiting those earning up to $58,523. (canada.ca)
- Canada Groceries and Essentials Benefit replaces the GST credit, offering higher payments beginning June 5, 2026, to over 12 million Canadians. (budget.canada.ca)
- Excise tax suspended temporarily: Federal excise tax on gasoline, diesel, aviation fuel, etc., set to $0 from April 20 to September 7, 2026, reducing costs for individuals and businesses with fuel needs. (budget.canada.ca)
Small Business and Investment-Related Measures
- Accelerated Capital Cost Allowance for low-carbon liquefied natural gas (LNG) facilities: businesses in those sectors may deduct costs faster to reduce taxable income sooner. (budget.canada.ca)
- Employee Ownership Trust Tax Exemption made permanent: allows businesses structured as employee-owned to benefit from tax exemptions, boosting flexibility in entity structure planning. (budget.canada.ca)
Tax Planning Strategies to Leverage These Changes
- Timing purchases or construction of sensitive assets (like low-carbon facilities) to align with periods that allow maximum CCA benefits to reduce income taxes.
- For those preparing for fuel-intensive operations (e.g., transportation/ agriculture), schedule major fuel purchases during the excise tax suspension period to maximize savings.
- Families and individuals who may fall into eligibility for benefits (CGEB, etc.) should file or confirm income reporting early to begin payments in June 2026.
- Consider moving more ownership or incentive structures toward employee ownership trusts if you’re planning succession or sale of business—tax planning here can be significant.
Examples of Planning Moves
- An SME operating a fleet may save substantial amounts by deferring fuel purchases until within the April–September 2026 window.
- Property developers investing in low-carbon LNG projects should assess whether placing investment now qualifies for accelerated write-off and what that means for financing and tax timing.
Summary Tips
- Review your business and personal income structures in light of the lowered first tax bracket and new/existing benefits.
- Be proactive about fuel timing, investments in environmental or green sectors, and ownership arrangements.
- Maintain good records and documentation to support claims eligible for new credits and tax treatments.