Tax Credits. What's new for corporations

2026 – Provinces and territories

British Columbia

[2026-02-17 Budget]

British Columbia book publishing tax credit – This credit will be made permanent effective March 31, 2026.

British Columbia farmers' food donation tax credit – This credit will be made permanent effective on royal assent.

British Columbia film and television tax credit – Effective on royal assent:

• the period to file a claim for the credit is extended from 18 months to 36 months after the end of the tax year. This applies to claims that would otherwise have been required to be filed after February 16, 2026

• corporations are no longer required to file a completion certificate with the CRA that would have been due after February 16, 2026

British Columbia manufacturing and processing investment tax credit – Effective April 1, 2026, a new temporary refundable B.C. manufacturing and processing investment tax credit is introduced. The credit applies to investments made by B.C. Canadian-controlled private corporations in buildings and machinery and equipment used for manufacturing and processing in B.C. Exclusions and expenditure limitations in the legislation apply.

British Columbia production services tax credit – Effective on royal assent:

• the period to file a claim for the credit is extended from 18 months to 36 months after the end of the tax year. This applies to claims that would otherwise have been required to be filed after February 16, 2026.

• the requirement to file a notice of intent to claim the credit is eliminated for notices due after February 16, 2026. Notices that were required to have been filed before February 17, 2026, will continue to be subject to the previous requirements and timelines

British Columbia scientific research and experimental development tax credit – The credit is amended to align with recent changes to the federal SR&ED tax incentive program and expand the refundable credit to eligible Canadian public corporations. Effective on royal assent, the credit will be made permanent.

British Columbia shipbuilding and ship repair industry tax credit – Effective on royal assent, the credit is extended for one year to the end of 2027.

Manitoba

[2026-04-10 Reg. 34/2026 amending Reg. 181/2007] 

Small business venture capital tax credit – Throughout the regulation, the term “share” has been replaced with the term “qualifying security” which is a defined term meaning a convertible right or an equity share. This change recognizes simple agreements for future equity (SAFEs) as eligible investment instruments. Eligibility for the credit has been expanded to include limited partnerships. 

[2026-03-24 Budget]

Manitoba film and video production tax credit – The budget announced enhancements to the credit, including establishing a mandatory pre-certification process and allowing for the inclusion of eligible non-resident labour costs in calculating the credit.

New Brunswick

[2026-03-17 Budget and 2026-05-05 Bill 39]

New Brunswick small business investor tax credit – The tax credit is increased from 15% to 25% of the amount invested to an annual maximum of:

• $125,000, for investment of up to $500,000, if the investment is not made in a strategic sector

• $250,000, for investment of up to $1,000,000, if the investment is made in a strategic sector

• $250,000, for investment of up to a total of $1,000,000, if the investment is made in both a strategic sector and a non-strategic sector

This will come into force retroactively on March 17, 2026.

Newfoundland and Labrador

[2026-04-29 Budget]

Newfoundland and Labrador lower rate of tax – Retroactive to January 1, 2026, the lower rate of Newfoundland and Labrador corporation income tax decreases from 2.5% to 2.0%. It will further decrease to 1.5% on January 1, 2027, and to 1% on January 1, 2028.

Nova Scotia

[2026-02-23 Budget]

Nova Scotia capital investment tax credit – The credit, which was set to end December 31, 2029, has been extended to December 31, 2035. Property acquired after 2035 may still qualify if: 

• a pre-approval application is submitted to the province before December 31, 2035, and

• the minister approves the application based on the required criteria 

Nova Scotia financial institutions capital tax – For tax years starting on or after November 1, 2026, the capital tax rate will increase from 4% to 6%.

Ontario

[2026-03-26 Budget]

Ontario lower rate of tax – Effective July 1, 2026, the lower rate of Ontario corporation income tax will decrease from 3.2% to 2.2%.

Ontario regional opportunities investment tax credit – The credit will expire for expenditures incurred after 2026.

Saskatchewan

[2026-03-18 Budget]

Saskatchewan research and development tax credit – The limit on annual qualifying expenditures for the refundable R&D tax credit is increased from $1 million to $2 million, retroactive to December 16, 2024. The list of qualifying expenditures for all corporations is expanded to include capital expenditures. These measures are being adopted in conjunction with the expansion of the federal SR&ED measures.

2025 – Federal

[2025-11-04 Budget]

Accelerated capital cost allowance (CCA) for liquefied natural gas (LNG) facilities

Under proposed changes, the accelerated CCA will be reinstated for eligible LNG equipment and related buildings acquired after November 3, 2025, and before 2035. To be eligible, new emission performance requirements will have to be met:

• facilities that are in the top 25% in terms of emissions performance will be eligible for accelerated CCA of 30% for liquefaction equipment and 10% for non-residential buildings used in LNG facilities

• facilities that are in the top 10% in terms of emissions performance will be eligible for accelerated CCA of 50% for liquefaction equipment and 10% for non-residential buildings used in LNG facilities

Agricultural cooperatives: patronage dividends paid in shares 

The temporary deferral of income taxes and withholding obligations, which was set to expire at the end of 2025, will continue to apply to eligible shares issued before 2031.

Carbon capture, utilization, and storage investment tax credit (CCUS ITC)

The full CCUS ITC rates (60%, 50%, and 37.5%) are extended by five years so that they apply from 2022 to 2035. The lower rates (30%, 25%, and 18.75%) will apply to eligible expenditures incurred from the start of 2036 to the end of 2040.

Clean technology manufacturing ITC

The list of critical minerals eligible for the clean technology manufacturing ITC is expanded to include antimony, indium, gallium, germanium and scandium. This applies to property that is acquired and becomes available for use after November 3, 2025.

Eligible activities under the Canadian exploration expense

Under proposed changes, effective November 4, 2025, expenses incurred to determine the quality of a mineral resource in Canada will not include expenses related to determining the economic viability or engineering feasibility of the mineral resource.

Foreign accrual business income

Foreign accrual business income (FABI) is a new elective relieving regime that complements foreign accrual property income (FAPI) by taxing certain foreign affiliate income like Canadian active business income. FABI rules apply to tax years that begin after 2025, but also apply to preceding tax years if an election is filed under 93.4(4) or (5).

Immediate expensing for manufacturing and processing buildings

Under proposed changes, effective November 4, 2025, temporary immediate expensing is introduced for the cost of eligible manufacturing or processing buildings, including the cost of eligible additions or alterations made to such buildings. A 100% deduction will be allowed in the first tax year if at least 90% of the floor space is used for eligible purposes.

The enhanced rate applies only for the tax year in which the eligible property is first used for manufacturing and processing. It is subject to the following phase‑out:

• 100% after November 3, 2025, and before 2030

• 75% in 2030 and 2031

• 55% in 2032 and 2033

• 0% after 2033

Investment income derived from assets supporting Canadian insurance risks

Under proposed changes, it was clarified that investment income derived from assets held by a foreign affiliate to back Canadian risks is included in foreign accrual property income (FAPI), regardless of which entity holds those assets. This would apply to tax years that begin after November 4, 2025.

Restricting Part IV tax deferral

Under proposed changes, for tax years starting after November 3, 2025, the deferral of Part IV tax on investment income will be limited when it comes from the use of tiered affiliated corporation structures with mismatched year ends. The payer corporation’s dividend refund will be suspended until a subsequent tax year when the recipient corporation pays a taxable dividend to a non-affiliated corporation or a shareholder who is an individual.

Return of fuel charge proceeds to farmers tax credit

The return of fuel charge proceeds to farmers tax credit is being eliminated. The 2024 calendar year is the final year for which the credit is available.

Scientific research and experimental development

The expenditure limit on which the SR&ED enhanced 35% tax credit can be earned is increased from the previously announced $4.5 million to $6 million. For more details, see the 2024-12-16 Fall Economic Statement.

Transfer pricing

Section 247 of the ITA will be amended to align with the Organization for Economic Co-operation and Development (OECD) Transfer Pricing Guidelines, and will require accurate delineation of transactions, including analysis of functions, risks, and market context. The proposed measures include:

• increasing the threshold for the transfer pricing penalty from a $5 million to a $10 million transfer pricing adjustment

• clarifying and simplifying the documentation requirements

• reducing the time to provide the documentation from 3 months to 30 days

These measures apply to tax years starting after November 4, 2025