Summer Tax Wisdom: New Hard Stop on Retroactive Tax Filings

Evelyn Jacks

How many Canadians are behind in filing their tax returns? It turns out there are millions – statistically just under 3 million. Despite the audit threat and significant penalties for those who owe, most of those millions of delinquent tax filers miss out on thousands of dollars owed to them.  Now, many will miss out permanently when an important deadline passes on October 30, 2026. Here’s what’s happening: 

What’s the Issue?  The Canada Carbon Rebate, formerly known as the Climate Action Incentive, was available from 2021 to 2024, to residents of Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island.   The November 4, 2025 budget proposed to end these payments for any adjusted returns filed for late filers after Friday, October 30, 2026.  Bill C-31 which contains the proposal must still be given Royal Asset to become law. 

How to Avoid the Permanent Miss. If you have clients in those provinces, now is the time to proactively set up appointments to retrieve the cash which will otherwise be forever lost.  File the 2021 to 2024 tax returns as soon as possible.

How much can be lost?  Thousands. Here’s what the CCR was worth for the 2024-2025 year alone; delinquent filers should catch up for 2021 to 2023 as well before October 30:

Annual Canada Carbon Rebate Amounts 2024-2025

Compiled by Knowledge Bureau, Inc.  Note:  NL, NS, and PE payments start July 1, 2023, so only three payments were received for 2023-2024. PE amounts include the 20% rural supplement as there are no CMA in PEI

Otherwise, Use the Taxpayer Relief Provisions.  For most other provisions, the taxpayer has 10 years from the end of the year in which the tax return was due, to fix errors or recover omissions.   There are special rules restricting retroactive claims of CCA and discretionary business deductions.

Avoid penalties.  Remember if the taxpayer owes money to CRA, it’s best to voluntarily correct the returns to avoid a 50% gross negligence penalty or in severe cases, a 200% tax evasion penalty.

Bottom Line – it never pays to miss filing a tax return.  You can avoid penalties and interest if you have a balance due, but most importantly, you’ll miss receiving refunds, refundable tax credits and special provisions like the now expired Canada Carbon Rebate. 

For more critical tax news join us on September 23 for the CE Summit on Audit Defence Management. In an increasingly digital relationship with the CRA, learn how to use appeals processes to the taxpayer's advantage. Register by September 9 so save 12% off regular tuition for a single event, or tax the Senior Tax Specialist Diploma with 5 CE Savvy Summits in the series.