What Business Owners, Investors, and High-Income Individuals Need to Know

Each quarter brings new tax developments that can materially affect financial outcomes—sometimes in ways that are easy to miss until it’s too late. The Q1 2026 edition of Tax Tips & Traps (Issue 153) highlights recent CRA changes, court decisions, and administrative updates that business owners, investors, and high-income individuals should review early in the year.

Below is a detailed breakdown of the key issues covered this quarter, along with practical context on why they matter.

To address perceived non-compliance in the trucking sector, the CRA has announced that penalties will now apply when businesses fail to file T4A slips reporting fees for services paid to certain corporations.

What’s changing

• Businesses in the trucking industry must report fees for services exceeding $500 paid to Canadian-controlled private corporations (CCPCs).
• These payments must be reported in Box 048 of the T4A slip.
• The new enforcement applies starting with the 2025 calendar year.

Who is considered part of the trucking industry?

A business is considered to be operating in the trucking industry if more than 50% of its primary source of income comes from trucking activities. Businesses with multiple income streams may fall outside this definition if trucking represents less than half of their primary income.

Filing deadline

• T4As for the 2025 tax year are due February 28, 2026.
• Because that date falls on a Saturday, filings will be considered on time if received or postmarked by Monday, March 2, 2026.

CRA has confirmed that while T4As are still required in other situations, the penalty moratorium continues for payments made to businesses outside the trucking industry.

Action: Businesses involved in trucking—either as operators or payers—should review their reporting systems now to avoid penalties.

Several short updates this quarter may have meaningful implications:

• Digital Platform Reporting:
  CRA will receive information from online platforms such as Airbnb, VRBO, Uber, and similar services for the 2025 calendar year by January 31, 2026. This increases CRA’s visibility into income earned through digital platforms.
• First-Time Home Buyers’ GST/HST Rebate:
  A proposed rebate would provide a 100% GST rebate on homes valued up to $1 million, with a phased-out rebate for homes between $1 million and $1.5 million.
  The effective date has been moved to March 20, 2025, aligning with the Prime Minister’s initial announcement.
• Assignment Sales by Non-Residents:
  Non-residents making assignment sales of real property are subject to the same withholding and disclosure requirements as direct sales.
• Aggressive Insurance-Based Tax Schemes:
  CRA has cautioned against complex insurance-based arrangements designed primarily to avoid taxes. CRA warns that some of these products do not meet the standards of valid insurance policies.

Old Age Security (OAS) provides a monthly benefit to eligible individuals aged 65 and older, but high-income earners may face a clawback.

OAS clawback thresholds

• 2025: $93,454
• 2026: $95,323

OAS is clawed back at a rate of 15% of adjusted income above these thresholds.

Deferring OAS

Individuals may consider deferring OAS to:

• Avoid full clawback
• Receive increased future payments (0.6% per month of deferral, up to 36%)

Recent court decision

In a November 18, 2025 Federal Court of Appeal case, a taxpayer attempted to cancel OAS enrollment well after the allowable deadlines. Despite citing continued employment, COVID-19 disruptions, and administrative delays, the court ruled against the taxpayer.

The takeaway: deadlines matter, and late cancellations will not be permitted.

Action: High-income individuals approaching age 65 should evaluate OAS timing before automatic enrollment occurs.

Employees aged 65 to 69 who receive CPP or QPP retirement benefits may elect to stop contributing to CPP.

The issue

In a recent Tax Court of Canada case, CRA argued that an election to stop CPP contributions was invalid because the taxpayer had not yet received their first CPP payment—even though benefits were later paid retroactively.

The court’s decision

The court rejected CRA’s interpretation, stating that slow processing should not prevent taxpayers from making a valid election. Because CPP benefits were ultimately payable retroactively, the election was valid.

Action: Eligible individuals should file elections promptly and retain documentation, particularly when processing delays are involved.

Effective November 3, 2025, most new CRA business number registrations and additions of program accounts must be completed through Business Registration Online (BRO).

Exceptions requiring phone or paper registration:

• Reactivating a previously closed account
• Businesses with only non-resident owners
• Businesses owned by another business (e.g., corporations or partnerships)

Action: Expect online registration to be the default and plan accordingly when setting up new entities or accounts.

Amounts paid to non-residents for rent on Canadian property are generally subject to withholding tax. However, recent legislative amendments provide limited relief.

When withholding may not apply

• Rent paid for a residential property in which an individual resides
• Rent paid for the residence of a deceased individual, within 36 months of death, by a graduated rate estate

CRA has indicated it is administering this change even though the legislation has not yet been formally passed.

Important limitation

If the exception applies, the non-resident landlord remains responsible for remitting and reporting the tax, unless an agent already does so.

Action: Do not assume all non-resident rent is exempt—most situations still require withholding.

Courts continue to focus on substance over intention when determining ownership.

In a Quebec case, a taxpayer claimed she was merely a nominee for her former spouse in a real estate development project. However, evidence showed she:

• Held title in her name
• Obtained permits
• Contributed financially
• Acted as owner during divorce proceedings

The court ruled that the taxpayer was the true owner and required her to report the full taxable gain.

Action: Nominee arrangements must be properly documented and consistently reflected in actions—not just intentions.

CRA recently examined whether participants in rent-to-own style arrangements hold beneficial ownership for purposes of the principal residence exemption (PRE).

CRA concluded that:

• Exclusive possession alone is not sufficient
• Lack of control over financing, renting, or structural changes indicates no beneficial ownership
• Gains tied to accumulated “interest” payments are not eligible for the PRE

Action: Novel home-purchase arrangements should be reviewed carefully before assuming tax benefits apply.

In a Quebec case, a taxpayer accidentally sold shares while hospitalized and immediately repurchased them. Despite the mistake, the court ruled that:

• A sale occurred
• A capital gain was triggered
• Relief provisions did not apply

Action: Even unintentional transactions can create real tax consequences.

The Q1 2026 tax landscape reinforces a consistent message: deadlines, documentation, and execution matter. Courts and CRA continue to focus on what taxpayers actually do—not what they intended to do.

If any of these developments apply to your situation, reviewing them early can help prevent unnecessary tax exposure later.

📞 Questions? Contact Kaplan Reinemo PC at 905-513-6303