RRSPs and RRIFs
The Budget proposes that registered retirement savings plans (RRSPs) will have no mandatory registered retirement income fund (RRIF) conversion at age 71. Currently, an account holder must open a RRIF and transfer their RRSP by no later than December 31 of the year they turn 71.
This is an administrative simplification rather than a tax break. Mandatory withdrawals that follow the current RRIF schedule and rise with age would still begin by age 72.
RDSP Changes
The Budget proposes making an existing temporary rule into a permanent one to allow a parent, spouse, common-law partner, or sibling to open and manage a registered disability savings plan (RDSP) for an adult.
For beneficiaries whose contractual capacity is in doubt, this would avoid having to first obtain formal legal authority through a guardianship or similar process.
This could make it easier to open RDSPs and get access to valuable government grants and bonds, building tax deferred savings for someone who qualifies for the disability tax credit.
Foreign asset reporting
Foreign investment reporting thresholds are set to double.
The T1135 Foreign Income Verification Statement filing threshold would increase from $100,000 to $200,000 for specified foreign property. The simplified reporting option would apply below $500,000 instead of $250,000.
This would be effective for taxation years or corporate fiscal periods ending after 2026 and reduce paperwork for investors in taxable U.S. or foreign stocks outside their registered accounts, as well as foreign rental properties and other property. (How to report foreign income in Canada.)
Tax filing extension
A new May 15 personal tax deadline could apply beginning with 2027 tax returns filed in spring 2028. All individuals would have until May 15 to file and pay their balances owing, representing a 15-day extension from the typical April 30 deadline.
However, the June 15 filing deadline for the self-employed and their spouses would now be one month earlier under the May 15 deadline that would apply to all personal taxpayers. This would mean most Canadians would get more time to file their tax returns, and accountants would get more time to prepare them.
Tax installment relief
The bane of many retirees and business owners is their tax installment requirement. Unlike employees, retirees and self-employed taxpayers may not have enough tax withheld at source and generally owe tax when they file. Taxpayers whose net tax owing exceeds the applicable threshold in the current year and either of the two preceding years generally must make installments throughout the year.
Beginning in 2028, tax owing thresholds that would trigger installment requirements would increase from $3,000 to $7,500 for most individuals outside Québec as well as corporations, and from $1,800 to $4,500 for Québec resident individual taxpayers.
Self-employed Canadians could also make one annual tax instalment under the budget proposals. Beginning in 2028, individuals whose primary income is from business, professional, or commission activities could make one payment of two-thirds of their annual combined net tax owing by December 31, instead of quarterly payments.
Canada Caregiver Credit changes
This non-refundable tax credit may soon be refundable. Beginning with the 2027 tax year, eligible caregivers could receive the credit even if they have little to no tax payable.
For 2027, the refundable credit could provide up to $1,260 of federal tax relief for certain infirm adult dependents. A non-refundable credit often provides little benefit to caregivers who have a low income and care for a family member, so this proposal could help them.
A one-time grocery benefit supplement could be paid in early 2027. It would provide an additional one-time payment of up to $339 for an eligible single individual without children or $679 for a couple with two children. The benefit is income-tested, so households with higher income would receive less or nothing.
