Canada Revenue Agency prescribed rate to remain unchanged for Q2 2026
For the fourth consecutive quarter, the Canada Revenue Agency prescribed rate will hold steady at 3 per cent. The rate will be in effect for the second quarter of 2026, from January 1st to March 31st, 2026.
The prescribed rate is “used to calculate taxable benefits for employees and shareholders from interest-free and low-interest loans.” Entrepreneurs and higher net-worth families often use low-interest loans as part of a comprehensive tax-planning strategy.
The prescribed rate is based on the three-month average of Government of Canada Treasury bill yields. It decreased from a post-pandemic peak of 6 per cent (10 per cent on outstanding debts to the Canada Revenue Agency) before plateauing in mid-2025.
Other CRA interest rates for Q2 2026 include the following:
- The rate on overdue taxes, CPP contributions and EI premiums: 7 per cent (unchanged from Q1 2026)
- The rate on non-corporate taxpayer overpayments: 5 per cent (unchanged from Q1 2026)
- The rate on corporate taxpayer overpayments: 3 per cent (unchanged from Q1 2026)
- The rate used to calculate taxable benefits for employees and shareholders for interest-free and low-interest loans: 3 per cent (unchanged from Q1 2026)
- The rate for corporate taxpayers’ pertinent loans or indebtedness: 6.20 per cent (down from 6.36 per cent in Q1 2026)
While a moderated prescribed rate can have a significant impact on short-, medium- and long-term strategic tax planning decisions, it can also reduce the financial pressure on taxpayers who maintain tax account balances with the CRA. Our advice remains the same, however: always prioritize the payment of debts to Ottawa to avoid compounding interest charges and/or non-compliance penalties.
Armando Iannuzzi, Co-Managing Partner
For tax planning assistance, or to discuss the prescribed rate’s impact on your financial situation, contact a member of our team.
