October 2026 brought a cluster of federal changes: a red-tape bill, a capital write-off already in force, a larger grocery benefit payment, and interest rates the Canada Revenue Agency left unchanged for the quarter.
Streamlining Federal Regulations with Bill S-7
On October 7, 2026, the government tabled Bill S-7, the Cutting Red Tape for All Canadians Act. The bill touches 31 federal statutes across 11 departments and is written to drop outdated administrative requirements. The pitch to small and medium-sized firms is less paperwork. Industry groups have asked for that cleanup for years. The government is treating the bill as a cross-department efficiency package and expects it to move quickly.
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New Tax Incentives for Business Productivity
The Productivity Mega Deduction, announced September 15, 2026, is the change businesses will feel through the fall. It lets a company expense 100 percent of the cost of most depreciable capital property acquired on or after that date, instead of writing the cost off over several years. The aim is a lower hurdle for equipment and buildings. The detail is in federal tax measures to boost investment in Canada.
Support for Families and Tax Administration
Households saw a payment as well. On October 5, eligible people received the second quarterly Canada Groceries and Essentials Benefit. The program replaces the GST/HST credit and pays 25 percent more. The CRA also confirmed prescribed interest rates for the fourth quarter of 2026: 7 percent on overdue tax and 3 percent on shareholder loans. How those rates sit inside a crowded rule book is covered in Canada’s tax system complexity and CRA administration.
What Changed This Month
- Bill S-7 amends 31 statutes to cut administrative requirements.
- The Productivity Mega Deduction allows a 100 percent write-off for most capital property.
- The October 5 grocery benefit payment is 25 percent higher than the credit it replaced.
- Fourth-quarter CRA interest is 7 percent on arrears and 3 percent on shareholder loans.
- The regulatory cleanup spans 11 departments.
Frequently Asked Questions
What is Bill S-7 for?
It cuts administrative requirements across 11 departments so people and businesses deal with fewer outdated rules.
How does the Productivity Mega Deduction work?
A business can expense 100 percent of the cost of most depreciable capital property acquired on or after September 15, 2026, instead of depreciating it over several years.
What happened to the GST/HST credit?
It has been replaced by the Canada Groceries and Essentials Benefit, which pays 25 percent more to eligible recipients.
Where do TFSA penalties fit?
They are a separate CRA problem, explained in TFSA contribution penalties for expatriates.
