Happy New Year and best wishes for a successful start to 2026.

As we begin the new calendar year, it is an ideal time to review the updated contribution limits, deadlines, and key financial planning considerations for 2026. Staying informed allows you to take advantage of tax-efficient strategies, maximize government benefits, and ensure your financial plan remains aligned with your long-term goals.

As a best practice, registered accounts should be funded as early as possible to benefit from compounding over time. At the same time, contributions should be made in the context of an overall financial plan to ensure appropriate asset allocation, tax efficiency, and risk management.

Below is a comprehensive overview of the most important limits, deadlines, and changes to be aware of for 2026.

Registered Accounts Contribution Limits & Deadlines

Registered Retirement Savings Plan (RRSP)

Contribution Limits:

• 2024: $31,560

• 2025: $32,490

• 2026: $33,810

Contribution Deadline: March 2, 2026

Calculation: The RRSP contribution limit is calculated as 18% of your earned income from the previous year, up to the annual limit, less any pension adjustments. Unused contribution room from previous years can be carried forward.

Registered Education Savings Plan (RESP)

Contributions to Maximize Government Grants:

To maximize the Canada Education Savings Grant (CESG), contribute $2,500 annually. The CESG provides a 20% match on contributions, up to $500 per year. If there is unused grant room from previous years, you can receive up to $1,000 in CESG per year by contributing $5,000. This is subject to the appropriate age of the beneficiary.

Maximum Grant:

The lifetime maximum CESG per child is $7,200.

Contribution Limit:

No annual limit, but a lifetime limit of $50,000 per beneficiary.

Tax-Free Savings Account (TFSA)

Contribution Limit for 2026:

$7,000

Total Contribution Room (since 2009):

$109,000 of total contribution room. Any missed contributions from previous years or any withdrawals made in previous calendar years can be recontributed and caught up.

First Home Savings Account (FHSA)

Contribution Limit:

• $8,000 for 2026.
• $24,000 total contribution limit if account was opened in 2024.
• $40,000 lifetime contribution room ($8,000 per year since account opening).

Unused FHSA room carries forward. Contributions are tax-deductible, and qualifying withdrawals for a first home purchase are tax-free, subject to program rules.

Registered Disability Savings Plan (RDSP)

Contribution Limit:

• No annual contribution limit

• $200,000 lifetime contribution limit

Canada Disability Savings Grant (CDSG)

• Matching rate of up to 300%, depending on income

• Maximum annual grant: $3,500

• Lifetime grant limit: $70,000

• Grant eligibility ends at age 49

Canada Disability Savings Bond (CDSB)

• No personal contributions required

• Maximum annual bond: $1,000

• Lifetime bond limit: $20,000

• Bond eligibility ends at age 49

In Retirement or Transitioning into Retirement

RRSP Conversion

• Individuals turning 71 in 2026 may make their final RRSP contribution by December 31, 2026.
• RRSPs must be converted to a RRIF (Registered Retirement Income Fund) by the end of the year you turn 71.
• No minimum RRIF withdrawals are required in the year of conversion.
• Minimum withdrawals begin the following year.

Old Age Security Payments & Claw back

OAS Payments:

OAS payments are indexed quarterly for inflation. The exact amount you receive depends on:

• Length of Canadian residency

• Age category

• Inflation adjustments

Please consult Service Canada to confirm your specific entitlement for 2026.

OAS Claw back (Recovery Tax)

• OAS claw back begins at approximately $95,323 of individual net income

• OAS benefits are gradually reduced above this threshold

• Claw back is based on individual income, not household income

Canada Pension Plan (CPP) - 2026

CPP Indexation:

In 2026, CPP Payments will increase by an indexation factor of 2.0%. This adjustment means that if the monthly CPP payment in 2025 was $1,000, now in 2026, the monthly payment will increase to $1,020.

Please check with Service Canada to find out more details about your CPP Payment.

Pension Income Tax Credit

Credit Amount:

Up to $2,000 of eligible pension income can be claimed as a non-refundable tax credit.

Eligibility:

This credit is available to individuals receiving eligible pension income, such as payments from a registered pension plan or certain annuities.

Tax Deadlines for 2025

For Self-Employed Individuals

Tax Filing Deadline: June 15, 2026

Any taxes owing must still be paid by April 30, 2026. Please speak to your Accountant for details.

Individuals with Regular Employment Income

Tax Filing Deadline and Payment on Taxes owing: April 30, 2026

Please speak to your Accountant for details.

Corporate Tax Return Filing

6 Months After the Corporate Fiscal Year-end.

Please speak to your Accountant for details.

Changes You Need to Know for 2026

Canada Pension Plan (CPP) – Contributions for Individuals

CPP contributions continue to reflect the enhanced CPP framework.

CPP Tier 1 (Base CPP)

• Year’s Maximum Pensionable Earnings (YMPE): $74,600

• Basic exemption: $3,500

• Employee contribution rate: 5.95%

• Maximum employee contribution: $4,230.45

• Maximum self-employed contribution: $8,460.90

CPP Tier 2 (CPP2 – Additional CPP)

• Applies to earnings between $74,600 and $85,000

• Additional employee contribution rate: 4%

• Maximum additional employee contribution: $416

• Maximum additional self-employed contribution: $832
 

Source for CPP Details: Click Here for Details

Lifetime Capital Gains Exemption (LCGE)

• Remains available for eligible small business shares and qualifying assets
• Subject to eligibility requirements and planning considerations
• Please speak with your accountant to confirm applicability and tax implications.

Age Amount Tax Credit

• Increased to $9,208 in 2026
• Eligibility begins at age 65 and is income-tested

Please speak to your Accountant regarding the credit and its eligibility requirements.

Other Tax Changes for 2026

Federal Tax Brackets

Source for Federal Tax Rates: Click here for Details.

Basic Personal Amount:

Indexed to inflation and ranges up to $16,452, depending on income level.

2026 Financial Planning Checklist

Use this checklist as a practical guide to ensure you’re staying on track with key planning items for the year ahead.

Registered Account Contributions

☐ Confirm your RRSP contribution room and consider contributing early to maximize compounding

☐ Review whether TFSA contributions make sense for tax-free growth or future flexibility

☐ If eligible, contribute to your FHSA and track your remaining lifetime limit

☐ Review RESP contributions to ensure you are maximizing available government grants

☐ If applicable, review RDSP funding and confirm eligibility for grants and bonds

Tax Planning & Cash Flow

☐ Review expected taxable income for 2026 and potential planning opportunities

☐ Set aside funds for tax payments, especially if self-employed or receiving investment income

☐ Confirm eligibility for pension income splitting and pension tax credits

☐ Review potential OAS clawback exposure and income-smoothing strategies

Retirement & Pension Planning

☐ Confirm your CPP contributions and understand how they impact future benefits

☐ If approaching age 65 or 71, review CPP, OAS, and RRSP/RRIF timing decisions

☐ Review RRIF minimum withdrawal requirements if already in retirement

☐ Confirm that retirement income sources are aligned with cash-flow needs

Investment & Portfolio Review

☐ Review asset allocation to ensure it remains aligned with your goals and risk tolerance

☐ Assess tax efficiency across registered, corporate, and non-registered accounts

☐ Review capital gains exposure and potential use of available exemptions

☐ Ensure portfolios remain diversified and aligned with your long-term plan

Planning & Documentation

☐ Review your overall financial plan and update assumptions where needed

☐ Confirm beneficiaries on registered accounts and insurance policies

☐ Review estate planning documents and powers of attorney

☐ Coordinate planning discussions with your accountant and legal advisors where appropriate

Final Thoughts

The beginning of the year is an ideal time to step back, review your financial plan, and ensure you are taking advantage of the updated contribution limits and planning opportunities available in 2026. Proactive planning, combined with disciplined execution, can significantly improve long-term outcomes.

We encourage you to connect with us to review your plan, confirm contribution strategies, and ensure your financial decisions remain aligned with your goals. If you have any questions or would like to discuss your situation in more detail, please don’t hesitate to reach out.

Pharus Wealth Advisory Group

The Beacon to your Financial Journey

1623 Avenue Road, Toronto ON M5M 3X8

Phone: 416 861-2460

Email: mailbox.pharuswealth@cibc.com

Website: www.pharuswealth.ca