Budget 2026 for dentists, physicians and health clinics
Budget 2026 (tabled November 5, 2026) has four items that matter to owners of dental, medical, physio and other health practices. One is a new capital gains exemption that leaves out health practices. One makes massage therapy services exempt from GST/HST. One widens the definition of an individual pension plan. One moves the T1 date.
This post takes each in turn, using the budget’s own tax annex. It describes the rules only. For the wider picture, see our overview of Budget 2026 for BC business owners.
Key takeaways
- The annex excludes a professional practice of a physician or other health care practitioner from the $15 million exemption.
- The annex does not name dentists. We read a dental practice as a health care practice.
- Budget 2026 adds qualifying massage therapists to the list of health care practitioners whose services are exempt from GST/HST.
- Budget 2026 expands the individual pension plan definition to plans whose members are all related to an employer or do not deal at arm’s length.
The $15 million exemption excludes health practices
Budget 2026 sets out a Canada Growth Incentive capital gains exemption of up to $15 million. The annex lists businesses that do not qualify. The list includes “a professional practice of an accountant, lawyer, notary, physician, other health care practitioner, engineer, architect.”
The annex does not name dentists. We read a dental practice as a health care practice. That is our reading, not the annex’s wording.
Take Dr. Lee, an Abbotsford family physician with a corporation. Suppose she sells shares of it at a $2,000,000 gain. That gain is well under the $15,000,000 limit, but the limit is not what decides the result. Her business is a physician’s practice, which is on the excluded list. The new exemption is $0, so the whole $2,000,000 gain is outside it.
Who qualifies, and who does not, is set out in our post on the $15 million capital gains exemption.
Massage therapy services become exempt from GST/HST
The annex says the government generally follows provincial practice when it decides which health care services are exempt. It adds that doctors, dentists and physiotherapists are among the practitioners already exempt, because they are regulated in at least five provinces. Massage therapy is also regulated as a health profession in at least five provinces.
Budget 2026 adds qualifying massage therapists to the list of health care practitioners whose professional services are exempt from GST/HST. The annex applies this to qualifying supplies of massage therapy services made after Budget Day. Budget Day is the day the budget is presented.
What counts as qualifying
Qualifying services are generally exempt if the person supplying them practises massage therapy and one of two things is true:
- The province requires a licence or certificate, and the person has one.
- The province does not require one, and the person has qualifications equivalent to those needed to be licensed or certified in another province.
A Langley physio clinic with a massage therapist
Picture a Langley physio clinic with a registered massage therapist. The therapist sees 18 clients a week for 48 weeks at $110 a session. That is 864 sessions and $95,040 a year in fees, before any tax.
If the therapist meets the licence or certificate test, those sessions are generally exempt from GST/HST when they are supplied after Budget Day. That means no GST/HST is charged on the $110 fee.
The annex describes exempt treatment this way: suppliers of exempt health care services do not charge the GST/HST, and they cannot claim input tax credits to recover the GST/HST they pay on inputs for those services. A clinic can check each therapist against the two tests above. For another health practitioner, see our post Is chiropractic GST exempt and what it means for your practice.
Individual pension plans: a wider definition
The annex defines an individual pension plan (IPP) as a defined benefit registered pension plan with fewer than four members, at least one of whom is related to a participating employer, such as a controlling shareholder.
The annex says IPPs face extra conditions that other registered pension plans do not. It also says some plans add related members so the plan has more than three members and falls outside the IPP definition.
Budget 2026 expands the IPP definition to include defined benefit plans where all members are either related to a participating employer or do not deal at arm’s length with a member who is. The annex applies this as of January 1, 2027.
Suppose Dr. Lee’s corporation sponsors a defined benefit registered pension plan with five members. Five is not fewer than four, so the member-count test above does not catch it. The expanded definition looks at how the members relate to the employer, not at how many there are. If all five members are related to the corporation or do not deal at arm’s length with a member who is, the plan is within the definition.
Our post on IPP vs RRSP for physicians over 50 explains how these plans work.
The T1 date moves to May 15
Budget 2026 sets May 15 as the T1 filing and balance-due date for all individuals, including self-employed individuals, from the 2027 tax year. Our post on the May 15 date and the instalment threshold has the detail.
The four items side by side
| Item | When the annex applies it |
|---|---|
| $15 million exemption, health practices excluded | Qualifying shares issued on or after Budget Day and before 2037 |
| Massage therapy exempt from GST/HST | Qualifying supplies made after Budget Day |
| IPP definition expanded | As of January 1, 2027 |
| T1 date of May 15 | 2027 and subsequent taxation years |
Questions about Budget 2026 and your practice? Talk to us or call 778-779-4212.
Source: Budget 2026, Tax Measures: Supplementary Information. Figures are from the Budget 2026 tax annex at budget.canada.ca.
General information only. Talk to us about your situation.