The Canada Revenue Agency confirmed this month that the prescribed interest rate will hold at 3% for the third quarter of 2026, covering July 1 through September 30. It is the fifth consecutive quarter at that level, the longest run since the rate fell to 3% on its way down from a peak of 6% in early 2024.
For CCPC owners and families running income splitting loans, that confirmation is the headline. The detail underneath it is more useful: four of the five CRA rates reset this quarter are unchanged from the second quarter. One of them moved.
What Moved and What Did Not
The base prescribed rate, the figure used for income splitting loans and for calculating the taxable benefit on low interest employee and shareholder loans, holds at 3%. The rate charged on overdue tax, Canada Pension Plan contributions, and employment insurance premiums holds at 7%. The refund rate paid on non corporate taxpayer overpayments holds at 5%, and the rate on corporate taxpayer overpayments holds at 3%.
The exception is the rate for corporate taxpayers' pertinent loans or indebtedness, a narrower provision covering certain cross border related party loans, which rises to 6.3% from 6.2%. It is a small move, but it is the only one of the five figures that did not simply repeat last quarter's number.
The mechanism behind all five rates is the same. The CRA takes the average yield on three month Government of Canada Treasury bills sold at auction during the first month of the preceding quarter, which for the third quarter means April, and rounds up to the next whole percentage point. Canada's 3 month Treasury bill yield stood near 2.27% as of June 9, consistent with an April average in the low 2% range that rounds up to the confirmed 3%.
Why the Window for New Loans Has a Real Expiry Date
A prescribed rate loan locks in its rate at the moment it is advanced. Whatever happens to the rate in subsequent quarters does not touch a loan that is already in place. That is the entire appeal of the strategy when rates are low, and it is also why the relevant question for a family that has not yet set one up is not Q3's confirmed 3%. It is what the rate will be for loans advanced in the fourth quarter of 2026, which will be calculated from July auction yields rather than April's.
Short term Canadian yields have not been flat. The Federal Reserve's hawkish June dot plot moved its own median 2026 rate projection from 3.4% to 3.8%, and Canadian yields have drifted higher alongside it, with the 10 year near 3.4% to 3.5% and the 5 year holding at 3.03%, even as the Bank of Canada held its own overnight rate at 2.25% and bond markets continue to price the July 15 decision as a hold.
None of this makes an increase to the fourth quarter prescribed rate the base case. The 3 month T-bill average would need to clear roughly 3% through July to push the rounded rate to 4%, a real move from the 2.27% recorded in early June. But the corporate pertinent loan rate ticking up to 6.3% this quarter is a concrete, present tense sign that the underlying inputs are no longer purely flat for the first time in over a year.
The Planning Bridge for CCPC Owners and Family Trusts
For CCPC owners with retained earnings sitting inside the company, a shareholder loan structured at the current prescribed rate, documented as bona fide debt with a credible repayment schedule, can still be set up before quarter end at the confirmed 3%.
For income splitting loans to a spouse or to a family trust, the same window applies, with one detail that is easy to miss. The loan must charge interest at least at the prescribed rate in effect when it is advanced, and that interest must actually be paid in cash, by January 30, 2027 for a loan advanced this year. Missing that date does not just cost a year of the strategy. It causes the investment income earned on the loaned funds to attribute back to the lender retroactively for the entire calendar year.
Five CRA rates reset for the third quarter, and only one of them actually moved.
Four of the five CRA prescribed and related interest rates for the third quarter of 2026 are unchanged from the second quarter. The rate for corporate taxpayers' pertinent loans or indebtedness rose to 6.3% from 6.2%, the first move in that specific rate in over a year.