Budget 2026: Key tax updates for Canada’s retail and consumer products sectors

Budget 2026 proposes a new Canada Growth Incentive and GST/HST and excise tax measures for the retail and consumer products sectors

On November 5, 2026, Canada’s Minister of Finance and National Revenue, François-Philippe Champagne, tabled the Liberal Government’s second budget, Masters of our Destiny, in the House of Commons (Budget 2026).

Of interest to the retail industry and consumer products sectors, Budget 2026 proposes a new investment incentive and a number of GST/HST and excise tax measures, including:

• a new Canada Growth Incentive, consisting of (a) a new capital gains exemption for qualifying Canadian-resident individuals (other than trusts) on up to $15 million in capital gains realized on the disposition of qualifying shares, and (b) an enhanced small business rollover to provide for a deferral on capital gains realized on the sale of shares of qualifying Canadian businesses if the sale proceeds are reinvested in another Canadian small business.
  Notably, businesses operating in the hospitality, arts, recreation or entertainment sectors, or franchises (among others) would not be qualifying businesses for purposes of this incentive;
• a one-time supplement to the Canada Groceries and Essentials Benefit, formerly the GST/HST Credit, for low- and modest-income individuals and families. The benefit is non-taxable and is intended to help offset the cost of food and other everyday essentials and the GST/HST paid by consumers;
• an exemption from GST/HST for qualifying massage therapy services and the zero-rating of certain alternating electric field therapy devices used in cancer treatment;
• changes to the cannabis excise duty stamping regime, including a new common excise stamp for participating provinces and territories with the same duty rate;
• a requirement for certain excise warehouse licensees holding non-duty-paid packaged spirits to provide security and to base security requirements on monthly excise duty liabilities, subject to a minimum of $5,000 and a maximum of $2 million per licence; and
• the expansion of eligibility for wholesaler licences to businesses that resell fuel in the ordinary course of business and broadening relief for fuel purchased or imported by licensed manufacturers.

For a discussion of these tax measures and others in Budget 2026, please see McCarthy Tétrault’s 2026 Canadian Federal Budget Commentary – Tax Initiatives.