Most Calgary business owners will find out about the Microsoft 365 price increase in 2026 the same way: a renewal invoice that’s noticeably higher than last year’s. By then, the window to do anything practical about it has usually closed.
From July 1, 2026, Microsoft is updating commercial pricing across most Microsoft 365 suites, with some plans rising by as much as 16%. Existing customers stay on current pricing until their next renewal after that date, which makes the next few months the practical window to review plans, audit licences, or lock in current rates.
It’s also a chance to look at how much of your current subscription you’re actually using. According to the Canadian Federation of Independent Business, 92% of Canadian small businesses use digital tools, but only 10% have fully integrated them across their operations.
Here’s what’s changing, why, and what to do before July.
What’s Changing on July 1, 2026
Microsoft announced the update in December 2025, with new commercial list pricing taking effect on July 1, 2026, for both new purchases and renewals. The full details are on Microsoft’s pricing and packaging update page.
The plans most relevant to Calgary SMBs and professional services firms:
- Microsoft 365 Business Basic: USD $6 to $7 per user/month (+16.7%)
- Microsoft 365 Business Standard: USD $12.50 to $14 per user/month (+12%)
- Microsoft 365 Business Premium: unchanged at USD $22 per user/month
- Office 365 E3: USD $23 to $26 per user/month (+13%)
- Microsoft 365 E3: USD $36 to $39 per user/month (+8.3%)
- Frontline plans (F1 and F3): the largest jumps, ranging from 25% to 43% depending on configuration
Standalone Microsoft Teams and Copilot SKUs are not part of this update. Canadian pricing will mirror these percentage changes in local currency.
Why Microsoft Is Making This Change: The Microsoft 365 Copilot Update
Microsoft attributes the increase to the volume of capability added to the platform, citing over 1,100 features rolled into Microsoft 365 services in 2025 alone. The Microsoft 365 Copilot update is the headline addition, but the changes break down into three areas that actually matter for Calgary businesses:
AI built into the apps your team already uses: Copilot Chat enhancements and Copilot Chat Analytics are moving into the base Business and Enterprise plans, rather than sitting behind a separate Copilot licence. That brings AI capabilities directly into Word, Excel, PowerPoint, Outlook, and OneNote. AI is becoming part of the software your team already runs, not a separate purchase.
Enhanced security: Business Basic and Standard plans gain URL time-of-click protection, which scans links the moment a user clicks rather than at the time the email arrived. That closes a real gap in phishing defence, particularly given how convincing AI-generated phishing has become – the Canadian Centre for Cyber Security warns that threat actors are now using large language models to generate personalized phishing messages at scale. The 2025 CIRA Cybersecurity Survey found 43% of Canadian organizations were targeted by a cyberattack in the last 12 months. Business Premium and E3 customers also get Microsoft Defender for Office 365 Plan 1 folded in.
Endpoint and IT management: Intune Remote Help and Advanced Analytics are being added to Business Premium and E3, alongside 50GB of additional mailbox storage across most Business tiers. Tools that previously required separate licensing are moving inside the suite.
What This Means for Your Calgary Business
The cost impact is the obvious starting point. A 50-seat Calgary firm on Business Standard will see roughly CAD $900 in additional annual cost once their renewal lands after July 1. Larger firms running a mix of Business Premium and E3 will see that compound faster.
The bigger question is whether your current plan still fits. A pre-renewal audit usually surfaces a handful of things worth acting on:
- Over-licensing. Departed staff still occupy licences and shared mailboxes with paid licences attached, and sales reps are assigned Business Premium when they only need Business Basic.
- Tier mismatch. With Business Standard rising to $14 and Business Premium unchanged at $22, the cost gap is narrowing. For teams that genuinely need Premium’s security and device management capabilities, the case for upgrading is stronger now, not weaker.
- Duplicated spend. Some of the new included features may overlap with third-party tools you’re already paying for. URL time-of-click protection and Defender for Office Plan 1 are the most likely candidates.
For most Calgary businesses, the price increase is less of a budget shock and more of a prompt to look at the subscription properly. CFIB research found that for every $1 small businesses invest in digital tools, they see $1.60 in return on average, rising to $2.40 for those who fully integrate the tools across their operations. The renewal you’ve quietly auto-renewed for three years is often the one with the most to gain from a review – and the kind of work managed IT services in Calgary should be doing as a matter of course.
What to Do Before July 1
A short, prioritized list for the next few months:
- Run a licence audit: Pull usage reports from the Microsoft 365 admin centre and identify inactive accounts, over-licensed users, and overlap with third-party security or device management tools.
- Map your renewal timing: Subscriptions renewing between July and December 2026 are the highest-leverage early-renewal candidates. Renewing 30 to 90 days early can typically lock in current pricing for a full annual term.
- Decide on the AI question: With Copilot Chat moving into base plans, work out whether the bundled capability is enough or whether specific roles still warrant the full Microsoft 365 Copilot add-on.
- Plan around the security additions: Make sure you’re not about to keep paying for tools Microsoft is about to include in your subscription.
Get Your Microsoft 365 Plan Reviewed Before July
The Microsoft 365 price increase 2026 is locked in, but how it lands on your invoice isn’t. A short review of your current plan, licence count, and renewal date is usually enough to identify whether you should renew early, change tier, or restructure your subscription entirely.
Get in touch with us today for a no-obligation Microsoft 365 plan review before July.
FAQs
- When does the Microsoft 365 price increase 2026 take effect? New commercial pricing applies from July 1, 2026, for new purchases and renewals. Existing customers stay on current pricing until their next renewal after that date.
- Which Microsoft 365 plans are not changing? Microsoft 365 Business Premium and Office 365 E1 list prices remain unchanged. Standalone Microsoft Teams and Copilot SKUs are also outside this update.
- What is the Microsoft 365 Copilot update bringing to base plans? Copilot Chat enhancements and Copilot Chat Analytics are being added to most Business and Enterprise suites, bringing AI into Word, Excel, PowerPoint, Outlook, and OneNote at the suite level rather than as a separate purchase.
- Can I lock in current Microsoft 365 pricing before July? Yes, in most cases. Renewing 30 to 90 days early at your current tier typically locks in pre-increase pricing for a full annual term. A managed IT partner can confirm whether your specific subscription qualifies.
