Issue # 150 | Saturday, November 14, 2026

With just about seven weeks left in 2026, now is the time to make your year-end tax moves before the December deadlines arrive. The CRA has also released some of the key 2027 numbers, so in this issue I share a retirement strategy many people overlook, what the new CPP and RRSP limits mean for you, and two year-end deadlines to put on your calendar. Enjoy this issue and please remember to share this with everyone in your network:

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1. Retiring Soon? Use Your Low-Income Years to "Harvest" Capital Gains

If you're retiring before your CPP and OAS start, you may have a window of several years where your taxable income is the lowest it will ever be. One smart way to use that window is capital gains harvesting: deliberately selling investments in your non-registered account that have gone up in value, paying little or no tax on the gain, and buying them back right away at today's price. This resets your adjusted cost base (ACB) higher, so you'll pay less tax when you sell later, when CPP, OAS and RRIF withdrawals have pushed you into a higher tax bracket.

Why it works:

• Only 50% of a capital gain is taxable.
• In a low-income year, much of that taxable half can be covered by your basic personal amount and the lowest tax brackets.
• The superficial loss rule only applies to losses, not gains, so you can buy back the same investment immediately.

For example, a retiree with $20,000 of other income who realizes a $30,000 gain adds only $15,000 to taxable income, and could pay a fraction of the tax that the same gain would cost once CPP, OAS and RRIF income kick in.

Watch out for these traps:

• Harvesting too much in one year. Spread it over several years so you don't jump into a higher bracket.
• Forgetting provincial tax and the dividends and interest that already use up some of your low-bracket room.
• Waiting until OAS starts. Extra income above the OAS clawback threshold (about $95,000) costs you 15 cents of OAS for every dollar.
• Very large gains in one year can trigger the Alternative Minimum Tax, which counts 100% of capital gains.

Two more ways to reset your cost base tax-efficiently: transfer appreciated investments in-kind to your TFSA if you have contribution room (the gain is taxed, but all future growth is tax-free; note that losses are denied on in-kind TFSA transfers), or donate appreciated publicly listed securities directly to a registered charity, where the capital gain is generally not taxed and you still get a donation receipt.

Capital gains harvesting works best as part of an integrated retirement plan that coordinates your RRSP withdrawals, CPP and OAS timing, and TFSA contributions. If you're approaching retirement, let's map out your low-income window together.

2. The 2027 CPP and RRSP Numbers Are Out

The CRA has published the 2027 Canada Pension Plan figures and registered plan limits. Here are the ones that matter most:

• CPP: Maximum pensionable earnings rise to $76,700 (from $74,600). The contribution rate drops to 5.75% (from 5.95%), so the maximum contribution is $4,209 each for employees and employers, or $8,418 if you're self-employed.
• CPP2: The second earnings ceiling rises to $87,400 (from $85,000). The maximum CPP2 contribution is $428 each for employees and employers, or $856 if you're self-employed.
• RRSP: The RRSP dollar limit for 2027 is $35,390 (up from $33,810 for 2026).

What this means for you: if you own a corporation, these numbers are a good prompt to review your salary and dividend mix for 2027. Salary creates RRSP room and builds your CPP pension, while dividends do neither, but salary also comes with CPP contributions on both the employee and employer side. The right mix depends on your income needs, retirement plans and your corporation's tax position, so let's plan it before your first 2027 payroll.

3. Tax-Loss Selling: Trade by December 30

Item #1 is about gains, but if you have investments in your non-registered account that are sitting at a loss, selling them before year-end can offset capital gains you realized this year. For the loss to count in 2026, the trade must settle in 2026. Based on the TSX settlement schedule, a trade made on Wednesday, December 30, 2026 settles on December 31, while a trade on December 31 does not settle until January 4, 2027. Markets are also closed on December 25 and December 28, so don't leave it to the last minute.

Watch out for the superficial loss rule:

• If you, or an affiliated person such as your spouse or a corporation you control, buy back the same investment within 30 days before or after the sale and still own it 30 days after, your loss is denied.
• A denied loss is not lost forever. It is usually added to the adjusted cost base of the repurchased investment, but you lose the benefit this year.
• Talk to your advisor before you trade, especially if you plan to buy the investment back.

4. First Home Savings Account: Use Your 2026 Room by December 31

If you're saving for your first home, the FHSA is one of the best tax deals available: contributions are deductible like an RRSP, and qualifying withdrawals to buy your first home are tax-free like a TFSA. Unlike the RRSP, there is no 60-day grace period after year-end. Only contributions made in the calendar year count toward that year's room.

• Annual limit: $8,000 per year, with a $40,000 lifetime limit.
• Carryforward: Unused room can be carried forward, but only up to $8,000. If you skip a year, you can contribute a maximum of $16,000 the next year.
• Open it now: Your room only starts once you open your first FHSA, so even if you can't contribute much this year, opening an account before December 31 starts building room for 2027.

5. Modern Shared Office Space – Promo Rates to Dec 31

If you need a professional space to work or meet clients in Mississauga, we have a spot for you! We've just opened our shared office space at 5484 Tomken Road, Unit 34, Mississauga and are offering introductory promo rates until December 31, 2026.

• 5 private offices (furnished, monitors included)
• Boardroom for client and team meetings
• 6 open desks for flexible or hybrid work

Rates start from $20/day for desks and $40/day for private offices, with flexible daily, weekly, and monthly options.

If you're an accountant, consultant, freelancer, small business owner, or remote worker looking for a quiet, professional space near Tomken & Matheson, I'd love to show you around. To book a space or schedule a tour of the office space, text or call Ken at 416-706-3491

Looking to Optimize Your Taxes and Build Wealth in 2026?

Year-end is your last chance to make many tax-saving moves for 2026. Whether you're planning for retirement, dealing with real estate, corporate structuring, or looking for ways to lower your personal tax bill, having a proactive tax plan is critical. If you'd like to review your year-end strategy or explore ways we can help you keep more of what you earn, feel free to book a no-cost consultation call with me here.

Have a wonderful week ahead!

Ken Green, CPA, CA, MBA

GMS Chartered Professional Accountants LLP

Tax-Efficient Wealth Membership Network