The federal budget will be tabled on November 5, eight days from now, Finance Minister François-Philippe Champagne announced on Tuesday, October 20. The Parliamentary Budget Officer published its outlook the same day, with a 2026-27 deficit of $63.3 billion and a note that the projections exclude new measures yet to be announced.
Three changes to 2027 payroll deductions are already set, and none depends on that budget. The base Canada Pension Plan rate falls from 9.9% to 9.5% on January 1, 2027. The Employment Insurance employee premium rises to $1.64 per $100 of insurable earnings from $1.63, and the insurable earnings ceiling rises to $70,800 from $68,900.
For an employee earning $70,000, the CPP cut saves $133 a year and the EI increase costs $24.93, a net gain of $108.07. The same salary costs the employer about $98 less. Those are HDQ calculations from the published rates, using the 2026 CPP earnings ceiling because the 2027 figure has not been announced.
Each point is the year maximum pensionable earnings less the $3,500 basic exemption, multiplied by the 4.95% employee base rate; the enhanced CPP contribution is excluded. The 2027 point applies the 4.75% rate to the 2026 earnings ceiling of $74,600 because the 2027 ceiling has not been published.
The Base CPP Cut: Who Saves What on January 1
Bill C-30, the Spring Economic Update 2026 Implementation Act, received royal assent on June 19, according to Benefits and Pensions Monitor. The combined base rate falls 0.40 percentage points, split 4.95% to 4.75% between the employee and the employer. It applies to earnings between the $3,500 basic exemption and the maximum pensionable earnings, and it does not touch the additional CPP in place since 2019.
Assia Billig, then chief actuary at the Office of the Superintendent of Financial Institutions, found in the 33rd Actuarial Report that the base plan can support the lower rate. Total contributions across about 16 million contributors are expected to fall by more than $3 billion a year.
The chart shows how unusual the change is. The maximum employee base contribution rose every year from 2015 to 2026, from $2,479.95 to $3,519.45, and the 2027 cut is the first decline in that series. The largest single-year rises, $163.35 in 2022 and again in 2026, are roughly the size of the $142.20 cut at the 2026 ceiling.
Self-employed individuals pay both halves of the CPP, so the 0.40 point cut applies in full to them. That is $266 a year on $70,000 of net self-employment income, and $284.40 at the 2026 earnings ceiling.
Employment Insurance Takes Back About a Fifth
The Canada Employment Insurance Commission set the 2027 employee rate on September 14 at $1.64 per $100 of insurable earnings. The employer rate is $2.30 per $100, which is 1.4 times the employee rate. The maximum employee premium is $1,161.12, up $38.05, and the maximum employer premium is $1,625.57, up $53.27.
At $70,000 the EI increase of $24.93 offsets about 19% of the $133 CPP saving. For earners above the $70,800 ceiling the increase is capped at $38.05, while the CPP saving keeps growing until earnings reach the CPP ceiling. At the 2026 CPP ceiling of $74,600, the employee saves $142.20 on CPP and pays $38.05 more in EI.
For an incorporated business owner paying a salary at that level, the combined employee and employer picture is a CPP saving of $284.40 against an EI increase of $91.32, a net reduction of $193.08 in the payroll cost of one salary. The figure moves when the 2027 CPP ceiling is published.
What the Registered Accounts See, and What They Do Not
RRSP room is built from earned income, which for an employee is employment income before payroll deductions. The CPP and EI changes therefore do not change RRSP room, and they do not change the TFSA dollar limit. The $108.07 net gain for a $70,000 salary is cash flow, and it becomes registered savings only if it is directed there.
The segments differ. An employee sees the net gain through a paycheque, and a self-employed individual sees the full 0.40 point cut.
An owner-manager who takes salary pays less in payroll cost per dollar of salary, while dividends create neither RRSP room nor CPP pensionable earnings. The salary side of a salary and dividend mix is cheaper on January 1 than it was on December 31.
The deadline that matters here is calendar-driven. The new rates apply from the first 2027 pay period, so payroll software, owner-manager salary decisions and 2027 cash flow projections need the 9.5% base rate and the $1.64 EI rate in place before then.
What Is Not in the Numbers Until November 5
The Parliamentary Budget Officer, Annette Ryan, projects deficits above $63 billion through 2030-31 and wrote that the two fiscal anchors "have imposed limited fiscal discipline on government spending and borrowing." Champagne said the budget will outline the next steps in the government plan. No specific change to RRSP, TFSA or other registered account rules has been named.
One business measure is already on the table. Prime Minister Mark Carney announced the Productivity Mega Deduction on September 15 at the Canada Investment Summit in Toronto, with draft legislation. It would allow most depreciable property to be fully deducted in the year it becomes available for use, and property acquired on or after September 15, 2026 may qualify. The government puts the cost at about $36 billion over five years.
Champagne called it "one of the most significant changes" to the business tax system in half a century. Brian Ernewein, senior adviser at KPMG Canada, called it a timing difference, comparable to an interest-free loan from the government. Individuals and partnerships with individual members cannot use it to create or increase a loss, and most buildings are excluded. It is a proposal, not law.
For a CCPC with equipment, software or vehicle purchases planned, the open dates are September 15 for acquisition, the year the asset becomes available for use, and November 5 for any change in the budget.