2025 Federal Budget Commentary

Dear Clients,

On November 4, 2025, the Federal Government tabled Budget 2025, which proposed various provisions impacting individuals and businesses.

Some of the items of interest include the following:

• Higher rate depreciation – A variety of new and extended accelerated capital cost allowance (CCA) measures would apply on capital asset acquisitions in the near future.
• Bare trust filings – Filings in respect of bare trusts would be deferred until the 2026 year.
• Underused housing tax (UHT) – The UHT would be cancelled starting with the 2025 year.
• Intercorporate dividends – In certain situations, a new rule would suspend tax refunds that would normally be received on dividends paid to affiliated corporations.
• Automatic tax filings – The government would commence an initiative to automatically file tax returns for certain low-income Canadians.

The government has also confirmed the cancellation of the proposed increase to the capital gains inclusion rate and the Canadian entrepreneurs’ incentive.