[Fall 2025 GPS] Canada: The Long-Awaited Budget!

On November 4, 2025, Canada’s Finance Minister tabled the 2025 federal budget. The budget outlines an ambitious investment strategy to stimulate economic growth. It introduces enhanced tax credits and incentives to boost innovation, clean technology, and capital investment.

There wasn't much in the budget that related to many of our clients. Below are selected budget items for individuals. The budget cancelled the following:
 

• The increase in capital gains inclusion rates; so the rate remains unchanged at 50%,
• The Underused Housing Tax (UHT),
• The Luxury Tax on Aircraft and Vessels,
• Canada Carbon Rebate, which winds down after April 2025.

In addition, the government will remove the Goods and Services Tax (GST) on new houses priced up to $1 million purchased by first-time buyers. A portion of the GST will be removed from homes costing between $1 million and $1.5 million.
 

Also, Marginal personal income tax rates are scheduled to decrease from 15% to 14.5% in 2025, then to 14% in 2026.

Bare Trusts Update:

Previously, the government announced enhanced trust reporting rules for taxation years ending on or after December 31, 2023. Under these rules, all trusts, unless specific conditions are met, must file a T3 return (including Bare Trusts). Bare trusts were exempt from the enhanced reporting rules for the 2023 and 2024 tax years. Further exemptions were released in a draft legislation on August 15, 2025, to provide additional time for implementation and compliance.