Canada proposes one-year income-tax objection deadline

Published with Budget 2026, the measure would change how companies manage disputes with the Canada Revenue Agency, but it would not take effect immediately. The accompanying Notice of Ways and Means Motion contains the proposed Income Tax Act amendments.^[1][2][3]

Current objection and extension routes

Under the current Income Tax Act, corporations generally have 90 days from the sending of an assessment notice to serve a written objection explaining their reasons and relevant facts. A company that misses that deadline can apply for an extension within the following year. Relief is conditional: the taxpayer must meet statutory tests, including inability to act or a genuine intention to object within the original period, and applying as soon as circumstances permitted.^[4][5]

Proposed one-year filing window

The proposed replacement would allow ordinary objections within one year after the assessment notice is sent. It would also extend the deadline for the restricted objections covered by subsection 165(1.1), without removing that provision’s limits on the issues that can be challenged. The new rules would apply to assessments or determinations sent on or after the date three months following Royal Assent of the implementing legislation.^[2]

Ordinary late-objection relief would end

The change is more than a straightforward extension. Companies would receive additional time to prepare an ordinary objection, but lose the existing route to seek relief after that deadline. Present law can permit an extension application up to a year after the initial 90-day period expires; the proposal instead creates a one-year ordinary filing window. That distinction matters where a group identifies an assessment or disputed adjustment late.^[2][4][5]

Large-corporation requirements remain

Large corporations would still need to identify each disputed issue, quantify the relief sought and provide supporting facts and reasons. The published amendments do not replace those requirements. Nor should the proposal be treated as an across-the-board extension of federal tax-dispute deadlines: the draft preserves separate treatment for specified charity-related objections and other requests.^[2][4]

Practical preparation

Tax teams should retain existing objection deadlines until the legislation and commencement date are settled. Preparation can nevertheless begin by reviewing assessment-routing controls, responsibility for notices received by Canadian entities and escalation procedures for cross-border adjustments. A transition register would help distinguish notices remaining under the present rules from those eventually governed by the proposed regime.^[2][4][5]