The 2025 Federal Budget, Canada Strong, was released on November 4, outlining several updates that impact individuals, businesses, and specific industries. While tax rates remain unchanged, the Budget introduces new credits, extended incentives, and important filing deferrals worth noting. Here are the key takeaways:

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🔹 Personal Measures

Automatic Tax Filing for Low-Income Individuals
CRA will gain authority to automatically file taxes for qualifying individuals starting in the 2025 tax year.

5% Tax Credit for Personal Support Workers
A refundable credit (up to $1,100) for eligible workers in health-care settings from 2026–2030.

Top-Up Non-Refundable Tax Credit
Introduced to maintain the value of nonrefundable tax credits as the lowest tax bracket rate is reduced.

Canada Disability Benefit
One-time supplemental payment of $150 for each disability tax credit certification.

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🔹 Business Measures

Accelerated CCA & “Productivity Super-Deduction”
Many accelerated Capital Cost Allowance measures are extended or reinstated, including:

Immediate expensing for productivity-enhancing assets (Class 44, 46, 50)

Accelerated CCA reinstated for manufacturing, clean energy, and zero-emission equipment

Immediate expensing for some manufacturing and processing buildings

Dividend Refund Anti-Avoidance Rule
New rules limit tax deferral strategies involving tiered corporate structures with mismatched year-ends.

SR&ED Enhancements
Expenditure limit increases to $6 million and expansion of eligibility for the enhanced 35% credit.

Worker Misclassification Enforcement
Significant funding to address improper employee/contractor classification—particularly in trucking.

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🔹 International Tax Measures

Updated Transfer Pricing Framework
Modernized rules aligned with OECD guidelines, including increased penalties and faster documentation timelines.

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🔹 Sales & Excise Measures

Underused Housing Tax Eliminated beginning in the 2025 calendar year.

Luxury Tax Removed for aircraft and vessels (vehicles are still subject to the tax).

New GST/HST Reverse-Charge Mechanism introduced to help prevent carousel fraud.

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🔹 Other Measures

Bare Trust Filing Requirements Deferred to the 2026 taxation year.

NPO Reporting Requirements Deferred to 2027.

Broader anti-avoidance rules were added to prevent circumvention of the 21-year deemed disposition rule.

Additional funding, policy changes, and administrative updates affecting EI, foreign credential recognition, labour standards, and more.

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🔹 Previously Announced Measures Moving Forward

The Budget confirms that numerous previously announced measures will proceed, including:

The increase of the lifetime capital gains exemption to $1.25 million

Tax-free Canada carbon rebates for small businesses

Charitable donation extensions

Clean economy tax incentives

Various technical amendments and updates across the Income Tax Act, GST/HST, and Global Minimum Tax Act

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Want the full analysis?

Download the complete Stoutenberg & Company 2025 Federal Budget Commentary for in-depth explanations, charts, and legislative details.

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