How tax filing works

Canada's tax year follows the calendar, January 1 to December 31. Your personal return for the year is due on April 30 of the following year. If you or your spouse or common-law partner are self-employed, you have until June 15 to file, but any balance owing is still due on April 30.

Your return tells the Canada Revenue Agency (CRA) what you earned, what you have already paid through payroll deductions or instalments, and which deductions and credits you qualify for. The CRA then sends a notice of assessment confirming whether you owe money or are getting a refund. Most people file online with CRA-certified software, through a tax professional, or on paper.

Who has to file?

You need to file a return for the year if any of these apply to you:

• You owe tax, for example because not enough was withheld from your pay.
• You earned self-employment, rental, investment or other income that has to be reported.
• You sold property, shares or other investments, or have to repay benefits such as Old Age Security or EI.
• The CRA has sent you a request to file.
• You want a refund, or want to receive benefits and credits such as the Canada Child Benefit (CCB), the GST/HST credit or the Guaranteed Income Supplement.

Newcomers, international students and temporary workers who are residents for tax purposes have the same obligations. And even if you earned nothing, filing is usually worth it, because the CRA uses your return to work out the benefits you're entitled to.

What happens if you don't file?

Late-filing penalties

If you owe tax and miss the deadline, the CRA adds a penalty of 5% of the balance owing, plus 1% for each full month the return is late, up to 12 months. If you were charged a late-filing penalty in any of the three previous years and the CRA had asked you to file, the penalty doubles to 10% of the balance plus 2% a month, for up to 20 months. If you're owed a refund, there is no penalty for filing late, but you won't see the money until you file.

Interest that compounds daily

Interest on any unpaid balance starts on May 1 and compounds every day. The CRA sets its rate each quarter. Interest is also charged on top of any penalties, so a small balance can grow quickly. Filing on time, even if you can't pay in full, keeps the penalty off the table and limits the damage to interest.

Paused benefits and credits

Many government payments are based on your tax return. If you don't file, payments such as the Canada Child Benefit, the GST/HST credit and the Guaranteed Income Supplement can be delayed or stopped until you do. For families, this is often the most expensive part of not filing.

CRA collections

When a tax debt goes unpaid, the CRA has strong tools to collect it. It can:

• Require your employer or bank to send part of your pay or account balance directly to the CRA.
• Keep future refunds and benefit payments to cover what you owe.
• Register a lien against your home or other property.

What if you haven't filed for several years?

The longer returns go unfiled, the more penalties and interest pile up. The CRA can also estimate your income and issue an assessment based on its own figures, which can be higher than what you actually owe. Once that assessment is issued, you can still file the real return to correct it, but it is better to get ahead of it.

What if there was a mistake on a past return?

You can ask the CRA to change a return you've already filed. If you left out income or made a mistake on purpose or by accident and the CRA hasn't contacted you about it yet, the Voluntary Disclosures Program lets you come forward on your own. If your application is accepted, the CRA may cancel some or all of the penalties and reduce the interest you would otherwise pay.

Can you go to jail for not filing?

It's rare. Almost all cases end with penalties and interest. Deliberate tax evasion is different: it is a criminal offence, and a conviction can bring fines of up to twice the tax evaded and, in serious cases, a prison sentence. Simply being late or disorganized is not tax evasion, but ignoring the CRA's requests for years can escalate.

How to get back on track

If you've fallen behind, the fix is the same however many years it's been:

• Gather what you have. Your slips are available in CRA My Account, even for past years. Our tax season checklist lists what else to pull together.
• File the most recent year first, so current benefits can restart, then work back through older years.
• Talk to the CRA early if you can't pay in full. Payment arrangements are available, and filing on time still saves you the late-filing penalty.
• Get help. A tax professional can file several years at once and tell you whether the Voluntary Disclosures Program makes sense. If your income is modest, free tax clinics run through the CRA's Community Volunteer Income Tax Program may also help.

Behind on your taxes, or want this year done right the first time? Book a consultation with our accounting team and we'll take it from there.

This article is general information, not tax or legal advice. Rules and rates change, so speak with us about your own situation.

Saving for a down payment is the biggest hurdle for most first-time buyers in Canada. Two government programs can help: the First Home Savings Account (FHSA) and the Home Buyers' Plan (HBP). They are often mentioned together, but they work in opposite ways. One is a savings account you never pay back. The other is a loan from your own retirement savings. Used together, they can make a real difference.

How the FHSA works

The FHSA is a registered account built only for buying a first home. It combines the best features of an RRSP and a TFSA:

• Contributions are tax-deductible, like an RRSP, so putting money in lowers your taxable income and can increase your refund.
• Growth is tax-free, whether you hold cash, GICs, ETFs or other qualified investments.
• Qualifying withdrawals are tax-free, like a TFSA, and you never have to pay them back.

You can contribute up to $8,000 a year, to a lifetime maximum of $40,000. If you don't use your full $8,000 in a year, up to $8,000 of unused room carries forward, so the most you could ever contribute in one year is $16,000. Room only starts building in the year you open the account, which is why it pays to open one as soon as you think you might buy, even with a small deposit.

Be careful not to over-contribute. Any excess is taxed at 1% a month until it is removed or new room becomes available.

Who can open an FHSA

• You are a resident of Canada and at least 18 (some provinces require you to have reached the age of majority, which is 19).
• You are no older than 71 at the end of the year.
• You are a first-time buyer, meaning you haven't lived in a home that you or your spouse or common-law partner owned at any time in the current year or the previous four calendar years.

Rules to keep in mind

• The home must be in Canada and you must plan to live in it within a year of buying it.
• You need a written agreement to buy or build the home before October 1 of the year after your withdrawal.
• Each withdrawal requires form RC725, which you give to your FHSA provider.
• The account must be closed by the end of the 15th year after you opened it, or the year you turn 71, whichever comes first.

How the Home Buyers' Plan works

The HBP lets you withdraw money from your RRSP to buy or build a qualifying home without paying tax on the withdrawal. You can take out up to $60,000, and a couple who both qualify can withdraw up to $120,000 between them. It can also be used to buy a home for a related person with a disability.

The catch is that the HBP is a loan to yourself, not a gift. You repay it to your RRSP over up to 15 years. Each year you owe at least one-fifteenth of the balance, and any amount you don't repay is added to your taxable income for that year. Repayments normally begin in the second year after your withdrawal; for withdrawals made from 2022 to 2025, the start was pushed back to the fifth year.

Who can use the HBP

• You are a resident of Canada.
• You are a first-time buyer under the same four-year test as the FHSA.
• You intend to live in the home as your principal residence within a year of buying or building it.
• You have a written agreement to buy or build the home, and complete it before October 1 of the year after the withdrawal.

You request each withdrawal with form T1036. Contributions must sit in your RRSP for at least 90 days before you withdraw them under the HBP, or you may lose the tax deduction on them, so plan ahead if you're topping up your RRSP right before buying.

FHSA vs. HBP at a glance

• Limit: FHSA up to $40,000 in contributions, plus any growth. HBP up to $60,000 from your RRSP.
• Repayment: FHSA, none. HBP, back into your RRSP over 15 years.
• Tax: both give you a deduction when you contribute and a tax-free withdrawal for a qualifying home.
• Effect on retirement: the FHSA has none. The HBP takes money out of your RRSP until you repay it, so you lose some tax-sheltered growth in the meantime.

Using both together

You don't have to choose. As long as you qualify for each one, you can withdraw from your FHSA and use the HBP for the same home. Since the FHSA never has to be repaid, it usually makes sense to fill it first and treat the HBP as a top-up.

Getting started

• Open an FHSA now if there's any chance you'll buy in the next 15 years, so your contribution room starts building.
• Claim the deduction when it helps most. You don't have to deduct contributions in the year you make them; saving the deduction for a higher-income year can produce a bigger refund.
• Plan your RRSP top-ups at least 90 days before you expect to use the HBP.
• Build a repayment plan for any HBP withdrawal, so it doesn't land on your tax return as income.

Thinking about your first home? Our mortgage and wealth management teams can help you plan your down payment, and our mortgage calculator shows what you might pay each month. Book a consultation to get started.

This article is general information, not tax, legal or financial advice. Program rules and limits change, so speak with us about your own situation.

Trade policy can feel far removed from your day-to-day finances, but in Canada it rarely is. The United States is by far our largest trading partner, and goods move back and forth across the border every day, often several times before a product is finished. When tariffs change, the effects show up in what we pay at the store, in the costs businesses face, and in the markets our savings are invested in.

What is a tariff?

A tariff, sometimes called a duty, is a tax on imported goods. It's usually charged as a percentage of the item's value. If the U.S. puts a tariff on a Canadian product, the American company importing it pays the tariff to the U.S. government when the goods cross the border. If Canada responds with tariffs of its own, Canadian importers pay those on goods brought in from the U.S.

Governments use tariffs for a few reasons:

• To protect domestic industries, by making foreign goods more expensive than local ones.
• To raise revenue, since the government collects the tax.
• As leverage in negotiations, or as a response to another country's trade measures.

Tariffs can support jobs in the industries they shield, but most economists find that the wider costs, such as higher prices and less trade, usually outweigh those gains.

Who actually pays?

The government collects the tariff, but it doesn't pay it. The importer does, and then has to decide what to do with the extra cost: absorb it and accept a lower margin, push it back onto the supplier, or raise prices. In practice it's usually a mix, and a large share tends to reach the customer.

What is a trade war?

A trade war starts when one country imposes tariffs and the other responds with its own. Each new round can bring another response, and the barriers keep rising. Trade wars usually end through negotiation, when both sides agree to lower or remove their tariffs, but while they last they create uncertainty for everyone who buys or sells across the border.

How tariffs affect the economy

The Canadian and U.S. economies are tightly linked, so tariffs tend to hurt both. The Bank of Canada has noted that tariffs affect spending, trade, government revenue, exchange rates, jobs, economic growth and inflation, and can seriously disrupt supply chains. Lower demand for Canadian exports can mean slower growth and job losses here, while higher import costs push prices up on both sides of the border. Uncertainty alone can lead businesses to delay hiring and investment.

What it means for households

For most families, tariffs show up as inflation: higher prices for groceries, cars, building materials and everyday goods. A weaker Canadian dollar, which often comes with trade tension, can make imports and travel more expensive too. Some practical steps:

• Revisit your budget and see where rising prices are hitting you most.
• Keep an emergency fund of a few months of expenses, especially if you work in an industry exposed to trade.
• Pay down high-interest debt, which gets harder to carry when costs rise.
• Stay invested for the long term. Markets often react sharply to trade news, but selling during a drop locks in losses. A diversified portfolio and regular contributions help smooth out the swings.

What it means for business owners

If you import, export or rely on suppliers who do, tariffs can change your numbers quickly. Questions worth asking now:

• Where does your product really come from? Goods that qualify under the Canada–United States–Mexico Agreement (CUSMA) may be treated differently, so make sure your country-of-origin documents are in order.
• How exposed is your supply chain? Map which inputs cross the border and whether there are alternative suppliers.
• Can your pricing absorb it? Work out how much of a cost increase you can carry and when you would need to raise prices.
• Is your cash flow ready? Duties are paid up front, before you sell the goods. A cash flow forecast shows how long you can manage before it pinches.
• Are you missing relief? The government has offered duty relief and remission programs for some goods affected by counter-tariffs. Check what applies to you through the Canada Border Services Agency.

Focus on what you can control

No one knows exactly how long trade tensions will last or which goods will be affected next. What you can control is your own plan: a clear budget, a healthy cushion of cash, a diversified long-term portfolio, and, for business owners, accurate numbers that show where you're exposed.

If you'd like help, our accounting and consulting teams can build a cash flow forecast and review your costs, and our wealth management team can check that your portfolio still fits your goals. Book a consultation to talk it through.

This article is general information, not tax, legal or financial advice. Trade measures change often, so check current rules and speak with us about your own situation.