The CRA prescribed rate for the fourth quarter is 3%, unchanged for a sixth straight quarter, and it is the rate that a family loan made before December 31 will carry for its entire life. The announcement revives a familiar year-end claim, that the window to lock the rate is closing. The data say otherwise: the rate is an option that stays open, and the real calendar pressure this quarter sits somewhere else.
The rate is the average yield on 90-day Government of Canada Treasury bills in the first month of the preceding quarter, rounded up to the next whole percentage point. Before the third quarter of 2025, the rate had not been as low as 3% since the final quarter of 2022, according to Investment Executive.
Why the Rate Is Unlikely to Move in January
The first quarter of 2027 rate will be set from October T-bill yields. Bank of Canada data show the 90-day bill averaging 2.39% at the Sept 22 auction and 2.41% at the Oct 6 auction, with secondary-market yields between 2.34% and 2.39% across the last five weeks. For the rate to reach 4%, the October average would have to exceed 3.00%, which is roughly 60 basis points above where bills trade today.
A Bank of Canada decision on Oct 28 could move the front end, but a single quarter-point move would leave the average well inside the band that rounds up to 3%. Waiting through year-end therefore carries a small cost, and a loan that is not made in Q4 can still be made at 3% in the first quarter if bills stay put.
The prescribed rate has held at 3% for six consecutive quarters after peaking at 6% in the first half of 2024, and a family loan made at that rate keeps it for as long as the loan stays in place.
The base rate is the average 90-day Government of Canada Treasury bill yield for the first month of the preceding quarter, rounded up to the next whole percentage point. The rate in effect when a loan is made applies for the life of that loan.
What a Prescribed Loan Has to Earn
A loan to a spouse or family member at the prescribed rate is an exception to the attribution rules. Interest must be charged at no less than the rate in effect when the loan was made, and each year interest must be paid no later than 30 days after year-end, which means Jan 30. On a $500,000 loan at 3%, the required interest is $15,000 a year.
That interest is income to the lender and deductible to the borrower when the money is invested to earn income. The strategy works only if the borrower portfolio earns more than 3% and the borrower is taxed at a lower rate than the lender. A missed Jan 30 payment ends the exception for that year and the years that follow, so the payment belongs in the calendar when the loan is signed.
The loan belongs in a non-registered account in the borrower name. Registered accounts already shelter growth, so a prescribed-rate loan adds nothing there. If rates later fall below 3%, the loan can be repaid and a new one made at the lower rate, but a rise never changes the rate on a loan already in place.
The Deadline That Is Real: Dec 30
Tax-loss selling has a hard cutoff, and it is not Dec 31. Canada settles equities on a T+1 basis, so a trade made on Wednesday, Dec 30 settles on Thursday, Dec 31 and counts in 2026. A trade made on Dec 31 settles on Monday, Jan 4, because Jan 1 is a holiday, and the loss lands in 2027. The TSX is also closed on Dec 25 and on Dec 28, so only two trading days in the final week, Dec 29 and Dec 30, can produce a 2026 loss.
The week of Oct 12 made the point concrete. The Philadelphia Semiconductor Index closed 23.9% under its June 22 record, and any investor who bought chip exposure in a non-registered account near that peak now holds an unrealized loss that can offset gains realized this year. Net capital losses can be carried back three years or forward indefinitely, and only half of a capital gain is taxable, so the loss offsets gains dollar for dollar before the inclusion rate is applied.
Where the Two Strategies Collide
The superficial loss rule denies a loss when the same security is bought within 30 days before or after the sale, a 61-day window. It applies to purchases by the seller, a spouse or any affiliated person, and a purchase in the seller RRSP or TFSA denies the loss permanently, since it cannot be added to the cost base.
That creates a specific trap for couples using both strategies. If the higher-income spouse sells a losing chip fund on Dec 29 and the lower-income spouse uses prescribed-loan money to buy the same fund the same week, the loss is denied. Each household needs one list of every account, in every name, before either trade is placed.