Accounting that runs quietly in the background, so your business can run loudly in the front.

We're halfway through 2026, which makes this a good moment to pause before the summer gets away from everyone. Four areas worth a five-minute look right now:

1. Foreign property reporting (T1135). If you or your corporation held foreign investment property with a total cost over $100,000 at any point in 2025, a T1135 form was due alongside your return. If you're not sure whether an account, a foreign rental property, or shares in a foreign company counts, now — not next April — is the time to ask, since penalties for a late or missed T1135 are calculated per day and add up quickly.
2. Principal residence sales. Sold a home, cottage, or investment property in the past year? The sale needs to be reported on your tax return even when the gain is fully sheltered by the principal residence exemption. Skipping this step doesn't just risk a penalty — in some circumstances it can put the exemption itself at risk.
3. Instalment payments. If the CRA has asked you to pay tax by instalments, the next payment is due September 15. Reviewing your estimated income now, rather than in August, gives you room to adjust the instalment amount if this year is shaping up differently than last year.
4. Getting ahead of paperwork. Mid-year is also a natural point to gather receipts, mileage logs, and donation slips into one place, rather than reconstructing them in a panic next spring.

None of this needs to take long, but a five-minute mid-year look can save a much longer conversation in April. If anything above raises a question about your specific situation, that's exactly the kind of thing we're here for.

When CPP2 — officially the second additional Canada Pension Plan contribution — was introduced in 2024, it was easy to miss in the fine print of a pay stub. Two years later, the numbers are large enough that business owners should have it on their radar.

Here's the mechanic in plain terms. Regular CPP contributions apply to earnings up to the Year's Maximum Pensionable Earnings, or YMPE. CPP2 adds a second band on top of that, running up to a higher ceiling called the YAMPE. The 2026 figures:

• YMPE (where CPP2 starts): $74,600
• YAMPE (where CPP2 stops): $85,000
• CPP2 rate: 4% each for employee and employer on earnings in that band
• Maximum CPP2 for 2026: $416 for an employee or employer, $832 for a self-employed individual

For a business with several employees earning above $74,600, that's an additional, entirely legitimate payroll cost that's easy to underbudget for if you're only working from last year's numbers — the CPP2 band has widened noticeably since it started in 2024.

Self-employed individuals feel it more directly, since they pay both the employee and employer share — up to $832 on the maximum band for 2026, with no employer to split it, on top of the regular CPP contribution, which is likewise calculated on both sides for the self-employed.

The bigger the payroll, or the higher a self-employed person's income, the more this is worth building into a cash flow forecast rather than discovering at tax time. If you'd like help estimating what CPP2 means for your specific payroll or your own self-employment income for the rest of 2026, we're happy to run the numbers with you.

The First Home Savings Account, or FHSA, is one of the more useful tools available to first-time home buyers in Canada, but a few details still trip people up.

1. The basics. You can contribute up to $8,000 per year, to a lifetime maximum of $40,000. Like an RRSP, contributions are tax-deductible. Like a TFSA, withdrawals used to buy a qualifying first home — including any investment growth inside the account — come out completely tax-free. Used well, that's a deduction going in and no tax coming out, a combination no other registered account in Canada offers on its own.
2. Contribution room only starts once you open the account. Unlike RRSP room, which builds automatically from earned income, your $8,000 of annual FHSA room only starts accumulating the year you actually open an account, even with a small deposit. Wait until you're ready to buy, and you can lose room you never get back, since unused room carries forward only one year at a time and the account itself has a maximum life of 15 years from opening.
3. You don't lose the money if you don't buy. If you don't end up purchasing a home, you can transfer the FHSA into an RRSP or RRIF tax-free, without using up any of your RRSP contribution room — so the worst case isn't losing the money, it's simply that it becomes retirement savings instead of a house down payment.

If you're saving for a first home, or have adult children who are, opening the account early — even with a modest deposit — is usually worth doing simply to lock in the contribution room. We're glad to walk through whether it fits your situation.

Few recent tax stories illustrate the risk of planning around not-yet-settled rules better than Canada's Digital Services Tax. Here's how quickly it moved:

1. June 2024 — the DST is enacted, applying a 3% tax on certain Canadian revenue of large digital businesses, applied retroactively back to January 2022.
2. June 30, 2025 — the first payment deadline arrives, representing an estimated two billion dollars owed across affected companies.
3. June 29, 2025, one day earlier — the federal government announces it will rescind the tax entirely, as part of restarting trade talks with the United States. The CRA immediately pauses all filing and payment obligations.
4. February 2026 — the repeal bill passes the House of Commons, with refunds, plus interest, promised to any business that had already paid.

For most of our clients, the DST itself was never directly relevant. The lesson underneath it is broader: a tax measure can be law and still be reversed before you'd ever have to pay it. That cuts both ways — it's a reason not to panic-plan around every proposed change (the capital gains inclusion rate increase followed a strikingly similar path: announced, delayed, then cancelled), but also a reason not to assume a passed law is automatically the final word.

One thing that hasn't gone anywhere, DST or not: if you sell through an online platform — think ride-share, delivery, or short-term rental apps — those platforms are still required to report your activity to the CRA annually. That reporting obligation is entirely separate from the DST and remains very much in force.

Ontario's 2026 budget, tabled in late March under the banner “A Plan to Protect Ontario,” was framed mainly around economic uncertainty and trade, but it also confirmed or continued a handful of measures that matter directly to small business owners.

1. Employer Health Tax exemption — unchanged at $1 million. The amount of annual payroll an eligible private-sector employer can pay before EHT applies at all remains at $1 million, and is scheduled to stay there through 2028. Businesses under that threshold continue to owe no EHT; those above it pay EHT only on the portion of payroll over $1 million.
2. Small business corporate tax rate — steady at 3.2%. This applies to the first tranche of active business income eligible for the small business deduction, one of the more competitive small-business rates among the provinces.
3. Targeted investment credits continue. The Ontario Made Manufacturing Investment Tax Credit and the Regional Opportunities Investment Tax Credit remain available to qualifying corporations investing in manufacturing, or building and renovating commercial property, in designated regions of the province.

None of these are new for 2026 so much as confirmed and continued, which in a year when a lot of federal tax policy has been in flux (see our notes on the capital gains inclusion rate and the Digital Services Tax) counts as good news in its own right. A stable backdrop is easier to plan around than a shifting one.

If you'd like to know how any of these apply specifically to your business's structure or payroll, that's a conversation we're happy to have.

One of the more common, and more expensive, mistakes we see business owners make is assuming that because a worker signed a contract calling them an “independent contractor,” that settles the question for tax purposes. It doesn't.

The CRA, and the courts when it gets that far, look past the label on the paper to the actual working relationship, weighing four factors together rather than any single one:

1. Control. Does the business direct how, when, and where the work gets done, or does the worker have genuine independence over that?
2. Ownership of tools and equipment. Who supplies and maintains what's needed to do the job?
3. Chance of profit and risk of loss. Does the worker have a real opportunity to profit from efficiency, or bear a real risk of loss, the way a business owner would, or are they simply paid for time or output, the way an employee is?
4. Integration. Is the work a core, ongoing part of the business's operations, performed the way an employee's would be, or is it a discrete project delivered more like a service?

No single factor decides it, and the CRA weighs the whole picture. What's at stake if you get it wrong: reassessment for unremitted CPP and EI, penalties and interest, and potentially several years of it at once if the CRA finds a pattern rather than a one-off.

This comes up most often with long-term “contractors” who work exclusively for one business, use that business's equipment and email address, and have worked the same hours for years — a fact pattern that increasingly looks like employment, whatever the original agreement says.

If you engage contractors regularly, it's worth having someone review a few of those relationships against these factors periodically, rather than assuming the paperwork settled it once and for all. We're glad to help with that review.

Every January brings a fresh set of indexed limits and thresholds. Here's a plain-language summary of the ones that come up most often in our conversations with clients.

1. TFSA — $7,000. The annual contribution limit holds at $7,000 for 2026, the third year in a row at that figure. Anyone who has been eligible and a Canadian resident since 2009 now has $109,000 of lifetime contribution room, assuming no contributions have been made yet.
2. CPP and CPP2. The Year's Maximum Pensionable Earnings rises to $74,600 (from $71,300), and the CPP2 upper ceiling sits at $85,000. Combined, the maximum employee CPP contribution for the year is roughly $4,646.
3. Basic Personal Amount — $16,452. That's the federal amount for most taxpayers, reduced on a sliding scale for income above roughly $181,000, down to a minimum of $14,829 for the highest earners.
4. Lowest federal tax rate — 14%. 2026 is the first full year at this reduced rate; it was 15% through 2024, then 14.5% for part of 2025 because of a mid-year change.
5. Bracket indexation — 2%. Federal tax brackets moved up by 2% for 2026, a smaller adjustment than 2025's 2.7%, reflecting cooler inflation.

None of these numbers are dramatic on their own, but together they shift take-home pay, payroll costs, and RRSP or TFSA planning just enough to be worth a look at the start of the year rather than a surprise partway through it. If you'd like these translated into what they mean for your own return or payroll, that's exactly what we're here for.

If you have what's known as a “bare trust” — broadly, any arrangement where one person holds legal title to an account or property purely for someone else's benefit, with no independent discretion of their own — you've likely heard some version of this before: expanded trust reporting rules were supposed to require these arrangements to file an annual T3 return, and the CRA has, every year since the rules were introduced, granted a last-minute exemption.

That happened again on December 16, 2025, when the CRA confirmed that bare trusts will not be expected to file a T3 return, including the beneficial-ownership Schedule 15, for the 2025 tax year — the third such exemption in a row, following the same relief for 2023 and 2024.

What's different this time is the plan for what comes after. Draft legislation, Bill C-15, proposes to narrow the definition of a reportable bare trust starting with the 2026 tax year, with some sensible carve-outs proposed, including:

• Trusts holding $50,000 or less in straightforward assets
• Joint bank accounts between spouses
• A parent's name added to an adult child's mortgage or title
• Similar everyday arrangements among related individuals — a category being expanded to include aunts, uncles, nieces, and nephews

The catch: this is still proposed legislation, not yet law as of this writing, and the CRA's relief for 2025 doesn't tell us exactly how the 2026 rules will apply until the bill actually receives royal assent.

Common examples worth flagging now, before the 2026 rules potentially apply:

• An “in trust for” account opened for a child or grandchild
• A parent on legal title of a house to help an adult child qualify for a mortgage
• Any joint account held for someone else's benefit rather than your own

If any of these sound like your situation, it's worth a conversation well before next year's filing season rather than after.

If you rent out a property short-term through a platform like Airbnb or Vrbo, a rule that's been in effect since January 2024 is worth double-checking, because getting it wrong doesn't just mean a missed deduction — it can turn a modest rental profit into a much larger taxable amount.

A “short-term rental” for this purpose is a residential property rented for stretches of less than 90 consecutive days. That property becomes “non-compliant,” and loses its expense deductions for the affected period, if either of these is true:

• It's located in a province or municipality that doesn't permit short-term rentals at all
• It's missing a licence, registration, or permit that's required to operate legally

When a property is non-compliant, the usual expense deductions — mortgage interest, insurance, cleaning, platform fees, and so on — are denied in proportion to however many days it stayed non-compliant. As an example: a $60,000 expense bill on a property that was non-compliant for half the days it operated as a short-term rental in the year loses roughly half of that deduction, not because of a tax rate change, but because the deduction simply isn't allowed for that portion of the year.

There's an added wrinkle: unlike most tax matters, there's no time limit on how far back the CRA can reassess a non-compliant amount, which means this isn't something that quietly ages out after the usual three-year reassessment window.

Separately, and worth knowing regardless of compliance status: platforms like Airbnb and Vrbo are now required to report host activity directly to the CRA every year, so this isn't an area where staying under the radar is a realistic strategy.

If you operate a short-term rental, confirming your municipality's and province's registration and licensing requirements, and keeping the paperwork to prove you met them, is one of the more valuable half-hours you can spend this year. We're happy to help you work through what applies in your specific municipality.

Many Canadians think of a TFSA as tax-free, full stop. A Tax Court of Canada case working its way through the system over the past few years is a reminder that isn't always true.

In the case, an investment advisor contributed roughly $15,000 to his TFSA and grew it to more than $600,000 over a few years through frequent, active trading of speculative stocks. The CRA took the position that this wasn't simply successful investing — it was carrying on a trading business inside the account. The Tax Court agreed, ruling that business income earned inside a TFSA is fully taxable, the same as it would be outside one. The decision has been appealed, and a final resolution isn't expected quickly, but in the meantime the CRA has continued applying the same reasoning to other TFSA holders it identifies as frequent traders.

What tips an account from “investing” into “carrying on a business” isn't your account balance or how well you've done — it's the pattern of activity, weighed as a whole:

• How often you trade
• How short a period you hold positions for
• How much time and skill you're putting into it
• Whether the whole picture looks more like a trading operation than a buy-and-hold portfolio

There's no bright-line test or dollar threshold; the CRA and the courts look at the totality of the activity. The practical consequence, if the CRA reassesses a TFSA this way, is that all the trading profit becomes taxable as business income, generally at a higher rate than investment income, with the possibility of interest and penalties layered on top if it relates to a prior year.

If you actively trade and are unsure whether your pattern of activity could raise this kind of question, it's worth a conversation before the CRA raises it for you.

The Alternative Minimum Tax, or AMT, is a parallel tax calculation that exists to make sure people who claim a lot of preferential deductions and credits still pay a reasonable minimum amount of tax. Most years, most people never think about it. Since 2024, more people should.

Here's what changed, effective 2024:

• The AMT rate rose to 20.5%, up from 15%
• Capital gains inclusion increased to 100% for AMT purposes, up from 80%
• Several credits dropped to 50% available under the AMT calculation, including part of the basic personal amount, the medical expense credit, and the disability credit
• The employee stock option deduction is no longer available at all when computing AMT

Put together, this means a taxpayer can end up owing more tax than expected in a year with an unusually large capital gain, a large donation of appreciated securities, or a significant stock option benefit, even though none of those, individually, would normally trigger extra tax.

The AMT exemption threshold, the amount of adjusted taxable income before AMT applies at all, sits at $177,882 for 2025 and is indexed annually, so this mainly affects higher-income years rather than typical ones. And AMT paid isn't simply lost: it generally can be carried forward and credited against regular tax in one of the following seven years, once income normalizes.

If you're expecting an unusually large capital gain, a big donation of securities, or a large stock option exercise this year, it's worth running the AMT calculation before year-end rather than after, while there's still time to plan around it.

Few recent tax proposals caused as much confusion as the plan to raise Canada's capital gains inclusion rate, and given how many times the rules changed, a plain recap of where things landed is overdue. Here's the timeline:

1. 2024 federal budget: proposes raising the inclusion rate — the portion of a capital gain that's taxable — from one-half to two-thirds, for individual gains above $250,000 a year and for all gains realized by corporations and most trusts, effective June 25, 2024.
2. January 31, 2025: the government defers the effective date to January 1, 2026.
3. March 21, 2025: a newly sworn-in government cancels the increase entirely.

The result: the inclusion rate has remained at one-half throughout, for individuals, corporations, and trusts alike, and there is no $250,000 annual threshold to worry about, because the two-thirds rate never actually took effect.

Two things from the same package were kept, however:

• The Lifetime Capital Gains Exemption limit was increased to $1.25 million on the sale of qualifying small business shares and farming or fishing property
• A new Canadian Entrepreneurs' Incentive began phasing in for 2025, gradually reducing the inclusion rate to one-third on a lifetime maximum of $2 million in eligible gains for qualifying entrepreneurs, rising by $400,000 each year toward that cap by 2029

The lingering practical issue is for anyone who sold an asset in 2024 specifically to lock in a gain before an increase that, in the end, never happened. That timing decision can't be undone, even though the rule it was made around no longer applies.

If you sold something in 2024 with the proposed increase in mind, or you're planning a sale of business or investment property now and want to know how the current rules actually apply, that's a conversation worth having before the transaction, not after.