The federal budget arrives Thursday, November 5, with a September proposal already on the table that changes how businesses write off equipment. Two registered-account numbers also frame the planning calendar into the new year: the 2027 RRSP dollar limit is set at $35,390, while the 2027 TFSA limit has not been announced.
Finance Minister François-Philippe Champagne announced the budget date on October 20, and the Parliamentary Budget Officer, Annette Ryan, projects a $63.3-billion deficit for 2026-27, according to Advisor.ca.
Where the Mega Deduction Meets the Owner-Manager
The Department of Finance announced the Productivity Mega Deduction on September 15. It proposes permanent immediate expensing for most depreciable property acquired on or after that date, so the full cost of a qualifying asset is deducted in the year it becomes available for use. Finance estimates the incremental cost at $36 billion over five years, and says coverage would rise from about 15% of capital investment under the earlier Productivity Super-Deduction to about two-thirds. The measure is a proposal and is not yet law.
For an incorporated business owner, a larger deduction lowers corporate taxable income in the year of purchase. That changes how much profit is available to pay out, and the form of payment matters for account planning. RRSP room accrues at 18% of prior-year earned income up to the annual dollar limit, and salary counts as earned income while dividends do not. An owner paid only in dividends therefore builds no new RRSP room from that income and relies on the TFSA, or on investing inside the corporation.
Jack Mintz of the University of Calgary has argued that tax systems tilted toward favoured sectors can misallocate capital, a view reported by The Hub on September 19.
The TFSA Reaches $109,000 Per Person While 2027 Waits
Cumulative TFSA room for a person eligible since 2009 has climbed to $109,000 for 2026, and it crossed six figures in 2025 after annual limits of $7,000 in each of the last three years.
Cumulative room assumes a resident eligible from 2009 with no withdrawals. The 2015 annual limit of $10,000 was reduced to $5,500 for 2016. Source: Canada Revenue Agency.
The annual limit starts from a $5,000 base indexed to inflation after 2009, using average monthly CPI for the 12 months ended September 30, and the result is rounded to the nearest $500. That rounding is why the limit held at $7,000 for 2024, 2025 and 2026. Dave Manuel reports that the CRA usually announces the next limit in late November.
Room is added each January 1 for residents aged 18 and older, and withdrawals are added back to room on the following January 1. A person who has never contributed carries the full amount.
The RRSP Limit Is Already Set at $35,390 for 2027
The 2027 RRSP dollar limit of $35,390 is $1,580 above the 2026 figure of $33,810, an increase of 4.7%. Reaching it requires earned income of at least $196,611 in the prior year, since room accrues at 18%. That figure is a useful screen: a larger limit helps only the higher earners whose room is capped by the dollar limit.
Contributions for the 2026 tax year can be made until March 1, 2027, the 60th day of the year. Between now and then, the planning sequence for most households is to confirm unused TFSA room in CRA My Account, confirm RRSP room from the latest Notice of Assessment, and for incorporated owners, to settle the salary and dividend mix before the corporate year-end shapes the answer.