2025 federal budget summary

On November 4, 2025, the Minister of Finance and National Revenue, François-Philippe Champagne, tabled the 2025 Federal Budget – A Strong Canada.
This budget focuses on sustainable economic growth, targeted tax relief, and administrative simplification for individuals and businesses.

Key Corporate Measures

Immediate expensing for manufacturing and processing buildings, applicable to assets acquired and first used before 2030.
Accelerated Investment Incentive extended, allowing full first-year deductions for clean energy equipment, data infrastructure, and productivity-enhancing assets.
RS&DE Program reform:
- Enhanced refundable credit threshold increased from $4.5M to $6M.
- Simplified pre-approval process to reduce review times by 50%.
- Broader eligibility for public corporations and reinstatement of capital expenditure eligibility.
Critical Mineral Exploration Credit (CMEC) expanded to include additional minerals such as bismuth, tungsten, molybdenum, and niobium.
Clean Technology Manufacturing Credit extended to new critical minerals (e.g., gallium, scandium).
Transfer pricing rules modernized to align with the OECD’s arm’s-length principle, clarifying documentation and penalty thresholds.

Key Personal Measures

Introduction of a refundable tax credit (5%) for personal support workers earning eligible income in recognized health care institutions.
Automated tax filing for low-income individuals through the Canada Revenue Agency, ensuring access to benefits without filing barriers.
Capital gains inclusion rate increase cancelled.
Canadian Entrepreneur Incentive repealed.

Sales and Excise Tax Measures

Elimination of the Underused Housing Tax and the Luxury Tax on aircraft and vessels, effective 2025.
GST exemption for first-time homebuyers on new homes up to $1 million, with partial relief up to $1.5 million.
Clarification that manual osteopathy services (non-medical doctors) remain subject to GST/HST.

International Taxation

Rules updated to address misclassified employment and corporate layering deferrals.
Clearer definition of Canadian risk assets in foreign affiliate income (FAPI).

Overall Direction

The 2025 Federal Budget reinforces Canada’s fiscal stability and competitiveness through targeted tax incentives, simplified compliance, and renewed support for innovation and clean technologies.