New year, new tax measures — what to expect in 2025
CBC
The coming year will see some changes to existing tax measures, but those changes are expected to have only minor impacts on individuals.
Daniel Rogozynski of the University of Waterloo's School of Accounting and Finance told CBC News that, for the most part, 2025 will be a "status quo year" on the tax front.
"There's not a lot there because they really can't do a lot," he said. "You can't reduce taxes because they're borrowing all this money, and they really can't spend a ton of extra money because they're borrowing all this money."
Rogozynski said the tax change Canadians are most likely to notice is the GST/HST holiday, which will give consumers a break on the cost of some essential goods for a two-month period.
That measure took effect on December 14, runs until February 15, 2025 and affects a specific list of goods and food items.
The parliamentary budget officer says the tax break will cost the federal government $1.46 billion and cost provinces with harmonized sales taxes $1.26 billion — but all of that could end up on the federal government's books if the provinces decide not to waive compensation for the federal government's measure.
"It really doesn't change the economics of people that much and it doesn't change the economics of Canada, other than spending money that we don't have," Rogozynski said.
"I think that if you really look at the GST thing, it's a two-month sugar high."
In the 2024 budget, the federal government increased the capital gains tax inclusion rate — the taxable percentage — from 50 to 66 per cent on capital gains above $250,000 per year for individuals.
It also announced that all capital gains earned by corporations and trusts would start being taxed at the two-thirds rate, instead of the 50 per cent rate.
A capital gain is the difference between the cost of an asset — an investment property, a stock or a mutual fund — and its total sale price.
The change was introduced in the budget's annex but has yet to pass through Parliament.
The Canada Revenue Agency (CRA) began enforcing the change provisionally on June 25 and will continue to do so until the legislation passes or a new government ends the measure.
Next year will be the first full year for the new capital gains inclusion rate.
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