Budget 2026 and CRA: credit bureau reporting, higher penalties and longer objection deadlines

Budget 2026 (tabled November 5, 2026) includes three sets of CRA enforcement measures: credit bureau reporting of tax debt, higher fixed-dollar penalties, and a longer deadline to object to an assessment. This post covers each one, using the tax annex. For the broader picture, start with our overview of the Budget 2026 tax measures.

Credit bureau reporting of tax debt

Under current rules, the CRA is unable to report taxpayer debts to credit bureaus. The annex explains that the Income Tax Act limits the disclosure of taxpayer information to specific circumstances. Budget 2026 amends the Income Tax Act to allow the CRA to disclose information about a taxpayer’s tax debts to credit bureaus.

The annex sets four conditions. The CRA may disclose a tax debt only where all four are met:

1. The taxpayer’s outstanding tax debt exceeds $50,000.
2. The assessments or reassessments behind the debt are not under objection or appeal, and all rights of objection and appeal have expired or been exhausted.
3. The CRA has told the taxpayer in writing, at least 30 days before disclosure, that it intends to disclose the debt.
4. Before the disclosure, the CRA has taken reasonable steps to collect the debt and has given the taxpayer an opportunity to make reasonable repayment arrangements.

Budget 2026 makes similar amendments to the Excise Tax Act, on the same conditions, for GST/HST debts. Budget 2026 applies this measure on royal assent of the enacting legislation.

Example: Raj’s trucking company

Raj runs a trucking company in Surrey. He has $62,000 of assessed tax debt and has not filed an objection. Here is how the four conditions apply to him.

• Amount: $62,000 is $12,000 above the $50,000 line, so the first condition is met.
• No objection or appeal: Raj has not filed an objection, but that alone does not meet the second condition. The annex also requires that all rights of objection and appeal have expired or been exhausted. Raj meets it once his objection deadline runs out with nothing filed.
• Written notice: The CRA must write to Raj at least 30 days before it discloses anything.
• Collection steps and repayment arrangements: The CRA must first take reasonable steps to collect. It must also give Raj an opportunity to make reasonable repayment arrangements.

All four have to be met together. Our post on CRA collections covers what happens next when a debt is not paid.

Fixed-dollar penalties

The Income Tax Act has two kinds of administrative penalties. Some are fixed-dollar amounts. Others are percentages, such as the late-filing penalty, which is calculated as a percentage of the unpaid tax at the filing deadline. The measures below are about the fixed-dollar kind.

Inflation adjustment

Several fixed-dollar penalties have not been adjusted since they were enacted in the 1980s or 1990s. One was enacted in 1927. Budget 2026 increases most fixed-dollar penalties to broadly account for inflation since they were enacted. Generally, older penalties go up by a factor of two or three, depending on when they were enacted. Most recent penalties stay unchanged, with limited exceptions. Budget 2026 also indexes these fixed amounts to inflation once every five years.

The annex gives no new dollar amounts for the Income Tax Act penalties, so this post does not either. Budget 2026 also increases most fixed-dollar administrative penalties under the GST/HST provisions of the Excise Tax Act, the Excise Act, 2001, the Air Travellers Security Charge Act and the Select Luxury Items Tax Act. It indexes those to inflation once every five years as well.

Medium and large corporations and partnerships

Budget 2026 scales certain penalty amounts by taxpayer size. This covers penalties for failing to provide required information on a form, failing to file certain tax forms, and failing to comply with certain other Income Tax Act obligations.

• Individuals and smaller corporations and partnerships stay at the base amounts.
• Medium corporations and partnerships pay three times the base amounts.
• Large corporations and partnerships pay eight times the base amounts.

The annex defines the sizes this way:

• A medium corporation, together with any related corporations, has a combined total of more than $10 million and up to $50 million of taxable capital employed in Canada.
• A large corporation, together with any related corporations, has a combined total of more than $50 million of taxable capital employed in Canada.
• A Canadian-controlled private corporation is treated as related only to a corporation with which it is also associated.
• A medium partnership has $2 million but less than $10 million in gross revenue.
• A large partnership has $10 million or more in gross revenue.

Repeated failures

Budget 2026 adds penalties for repeated failures to file tax forms and repeated failures to comply with obligations that do not have a more specific penalty. These penalties generally double the base penalty that applies to the first failure. The size adjustments above then increase the amount further for corporations and partnerships.

The annex limits them. A repeated-failure penalty applies to a failure for a particular taxation year only if both of these are true:

• The person or partnership has been liable for a penalty for the same type of failure in any of the three preceding taxation years.
• The person or partnership has failed to remedy the current failure after being sent a notice, requirement or demand by the CRA.

Our post on filing taxes late in Canada and the penalties covers the late-filing side.

When the penalty changes apply

Budget 2026 applies the Income Tax Act penalty measures to taxation years or fiscal periods ending after 2027. It generally applies the changes to penalties under the Excise Tax Act, the Excise Act, 2001, the Select Luxury Items Tax Act and the Air Travellers Security Charge Act to reporting periods that end after 2027.

A longer deadline to object

To dispute an income tax assessment, a taxpayer files a notice of objection. Under current rules, taxpayers generally have 90 days after a notice of assessment is sent to do this. Individuals and graduated rate estates have the later of 90 days after the notice is sent and one year from the tax return filing due date for the year being assessed. If the deadline is missed, a taxpayer has one year from the original deadline to apply to the CRA for an extension of time. The annex says that in almost every case, the CRA grants an extension.

Budget 2026 amends the deadline for most taxpayers to one year after the day the notice of assessment is sent. For individuals and graduated rate estates, it becomes the later of one year after the notice is sent and two years from the tax return filing due date for the year being assessed. Taxpayers then no longer need to apply for an extension of time, and Budget 2026 eliminates the ability to do so.

Budget 2026 applies this amendment to assessments sent on or after the day that is three months after royal assent.

Example: the same notice under the 90-day and one-year deadlines

These dates are an illustration. They assume the notice is sent on or after the day that is three months after royal assent.

Take a corporation whose notice of assessment is sent on March 14, 2028.

• Under current rules, the 90-day deadline is June 12, 2028.
• One-year deadline under Budget 2026: March 14, 2029.
• The difference is 275 days.

Now take a self-employed individual whose 2026 return was due June 15, 2027. A notice of reassessment for that year is sent August 16, 2028.

• Under current rules, the deadline is the later of November 14, 2028 (90 days after the notice) and June 15, 2028 (one year from the due date). That is November 14, 2028.
• Under Budget 2026, the deadline is the later of August 16, 2029 (one year after the notice) and June 15, 2029 (two years from the due date). That is August 16, 2029.
• The difference is 275 days.

What to do

• If you disagree with an assessment, note the date on the notice and the objection deadline that applies to you.
• Keep filings on time and answer CRA notices when they arrive.

Questions about Budget 2026 and your business? 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.