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2025 Federal Budget - Canada


🔍 Key points

 

 

Here are the key points to remember:

 

 

1. Investments and expenditures

 

 

  • The budget includes new commitments of $141.4 billion over the next five years.

  • Objective: to strengthen the Canadian economy, increase productivity, diversify trade, and cope with global shocks.

 

 

 

2. Tax measures for businesses

 

 

  • Introduction of a super productivity deduction: enhanced tax incentive for new capital investments.

  • Immediate charge-off for eligible manufacturing or processing buildings acquired after November 4, 2025.

  • Enhanced tax credit for research and development (SR&ED) activities: ceiling raised.

  • Increased incentives for critical minerals and the manufacture of clean technologies.

 

 

 

3. Measures for individuals and taxation

 

 

  • Increase in the "cumulative capital gains exemption": it will apply up to $1.25 million of eligible capital gains.

  • Temporary tax credit for personal support workers (up to $1,100 per year).

  • Simplification and streamlining of eligible investments in registered plans (RRSP, TFSA, etc.) for a new structure starting in 2027.

  • Abolition of the tax on under-utilized housing (TLSU) from the calendar year 2025.

 

 

 

4. Other notable measures

 

 

  • Modernization of transfer pricing rules for Canadian companies with foreign operations.

  • Strengthening measures to combat financial fraud, improving access to bank funds, etc.

 

 

 

 

 

🎯 Implications for your context — MTLAF & clients

 

 

Given your role (business, technology, international), here's what stands out:

 

  • For service or technology companies in which you invest or develop: the super productivity deduction and the immediate transfer of capital investments can significantly improve after-tax profitability.

  • For entrepreneurs with holdings or incorporated companies: the increase in the capital gains exemption (up to $1.25M) is a lever to consider in exit or liquidity strategies.

  • For individuals in your client portfolio: the simplification of registered plans and tax credits (e.g. for attendants or personal support) can be value-added arguments in your recommendations.

  • For international compliance: the new transfer pricing rules reinforce the importance of engaging with companies that have cross-border operations (e.g., Canada ↔ USA) — a relevant point for your "cross-border" vision.

 
 
 

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