Canada Revenue Agency prescribed rate unchanged for Q4 2026
The Canada Revenue Agency prescribed rate will hold steady at 3 per cent for the fourth quarter of 2026. This will be the sixth consecutive quarter that the rate has remained unchanged. It will be in effect from October 1st, 2026, to December 31st, 2026.
As outlined previously, the Canada Revenue Agency prescribed rate is “used to calculate taxable benefits for employees and shareholders from interest-free and low-interest loans.” Many higher net-worth families employ low-interest loans as a tool for tax planning.
The prescribed rate is based on the three-month average of Government of Canada Treasury bill yields. The rate has been declining or stable since reaching 6 per cent (10 per cent on outstanding debts to the Canada Revenue Agency) during the COVID-19 pandemic.
Other CRA interest rates for Q4 2026 include the following:
- The rate on overdue taxes, CPP contributions and EI premiums: 7 per cent (unchanged from Q3 2026)
- The rate on non-corporate taxpayer overpayments: 5 per cent (unchanged from Q3 2026)
- The rate on corporate taxpayer overpayments: 3 per cent (unchanged from Q3 2026)
- The rate used to calculate taxable benefits for employees and shareholders for interest-free and low-interest loans: 3 per cent (unchanged from Q3 2026)
- The rate for corporate taxpayers’ pertinent loans or indebtedness: 6.29 per cent (a slight decrease from 6.30 per cent in Q3 2026)
Although the 7 per cent interest rate on taxes owing to the CRA is unchanged for the fourth quarter, it represents a substantial potential repayment burden if debts go unpaid and begin to compound. The recommended approach is to always clear outstanding balances to the Agency as quickly as possible. Doing so helps to minimize the financial risk from non-compliance penalties and interest charges.
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.
