On November 4, 2025, Minister of Finance and National Revenue François-Philippe Champagne tabled the new Liberal Government’s first budget, titled Canada Strong (Budget 2025).
In the face of global uncertainty and significant economic shifts, Budget 2025 is intended to be an investment budget aimed at transforming Canada’s economy to one that is stronger, more self-sufficient, and more resilient to global shocks.
It includes a total of $60 billion in savings and revenues over five years, and makes generational investments in housing, infrastructure, defence, productivity and competitiveness.
Budget 2025 also projects an historical deficit of $78.3 billion, including $45.4 billion in capital investments and $33 billion in expenses.
Insight:
Budget 2025 does not propose changes to the following items:
- Personal income tax rates (but reaffirms the reduction of the lowest marginal personal income tax rate which was originally announced in May 2025);
- Corporate income tax rates;
- The capital gains inclusion rate of 50%;
- The principal residence exemption; and
- Required minimum withdrawals from Registered Retirement Income Funds (RRIF).
Budget 2025 also does not introduce a wealth tax for individuals.
Budget 2025 does not reinstate the Multiple Unit Rental Building (MURB) cost allowance program, which was previously in effect from 1974 and 1981.
Highlights:
Empowering Canadians
- Reduce the lowest personal marginal tax rate:
- From 15% to 14.5% (for 2025) and 14% (for 2026+)
- Top-Up Tax Credit available for 2025 to 2030 if overall taxes increase due to rate reduction
- Deliver automatic federal benefits to eligible individuals in 2026:
- Allow the Canada Revenue Agency to file pre-populated tax returns, subject to taxpayer opt-in and approval
- Automate access to certain federal benefits, e.g., GST/HST credit, Canada Child Benefit
- Reduce cost of ownership for first-time home buyers:
- Eliminate Goods and Services Tax on new homes up to $1 million
- Reduce Goods and Services Tax on new homes between $1 million and $1.5 million
- Enhance the Canada Disability Benefit program:
- One-time supplemental payment of $150 to help offset costs of applying for the Disability Tax Credit
- Exempt the Canada Disability Benefit from being treated as income for tax purposes
Building a stronger Canadian economy
- Introduce a Productivity Super-Deduction:
- Enhanced tax incentives allowing businesses to write off a larger share of the cost of new capital investments
- Examples include:
- Immediate 100% expensing of manufacturing or processing machinery and equipment, and associated buildings
- Immediate expensing of productivity-enhancing assets, such as computers and patents
- Enhanced first-year write-off for most other capital assets
- Enhance the Scientific Research and Experimental Development Tax Incentives:
- Increase the annual expenditure limit for the special 35% refundable tax credit to $6 million
Improving government efficiency
- Repeal the Underused Housing Tax
- Eliminate the Luxury Tax on aircraft and vessels
