Budget 2025 Is Now Law: 10 Tax Changes That Matter for Individuals and Small Businesses

The 2025 federal budget was tabled on November 4, 2025. Its main tax measures became law when Bill C-15, the Budget 2025 Implementation Act, No. 1, received Royal Assent on March 26, 2026. Here are the changes most likely to affect Ontario individuals, families, and small businesses.

For individuals and families

1. A top-up credit that protects the value of your credits

When the lowest tax rate dropped to 14%, non-refundable credits lost a little value because they're calculated at that rate. The temporary top-up credit keeps the old 15% rate on the portion of your non-refundable credits that's above the first tax bracket threshold, for the 2025 to 2030 tax years. It mostly matters for people with large claims, like big medical bills or tuition.

2. Personal Support Workers Tax Credit

Eligible PSWs can claim a refundable credit of 5% of eligible earnings, up to $1,100 a year, for 2026 to 2030. See our guide to the Personal Support Workers Tax Credit.

3. No double claims for accessibility renovations

Starting with the 2026 tax year, an expense claimed under the Medical Expense Tax Credit can't also be claimed under the Home Accessibility Tax Credit.

4. The Canada Disability Benefit isn't taxable

Canada Disability Benefit payments are excluded from income, starting with 2025.

5. The Underused Housing Tax is gone

No UHT returns or tax for 2025 and later years, though obligations for 2022 to 2024 remain. Details in our post on the end of the Underused Housing Tax.

For businesses

6. Faster write-offs are back

Bill C-15 reinstated accelerated capital cost allowance through the Accelerated Investment Incentive, which gives a bigger first-year deduction on most new depreciable property. It also provides immediate expensing for certain productivity-enhancing assets. Since then, the government has proposed going much further with the Productivity Mega Deduction.

7. Purpose-built rental housing

New eligible purpose-built rental projects get an accelerated 10% capital cost allowance. The enhanced 100% GST rental rebate was also extended to qualifying co-operative housing and to student residences built by universities, public colleges, and school authorities.

8. Stronger SR&ED incentives

The Scientific Research and Experimental Development (SR&ED) program was enhanced. Budget 2025 raised the expenditure limit for the enhanced 35% refundable credit available to Canadian-controlled private corporations to $6 million (it was $3 million under the earlier rules), for tax years that begin on or after December 16, 2024. More of a growing company's R&D spending can now qualify for the richer credit.

9. Digital services tax repealed

The Digital Services Tax Act and its regulations were repealed. The government had announced in June 2025 that it was rescinding the tax.

10. No more luxury tax on aircraft and boats

The luxury tax no longer applies to subject aircraft and vessels, effective November 5, 2025. The luxury tax on vehicles still applies.

Other changes worth knowing

Alternative Minimum Tax: only 50% of investment counsel and management fees can be deducted when calculating AMT (Bill C-15).
Osteopathic services: services provided by osteopathic practitioners who aren't osteopathic physicians are confirmed as subject to GST/HST (Bill C-15).
Canada Carbon Rebate: with the consumer fuel charge removed as of April 1, 2025, the final household payment went out in April 2025.

What wasn't in Bill C-15

Some Budget 2025 measures were released separately, such as immediate expensing for manufacturing and processing buildings and the plan for the CRA to automatically file returns for some lower-income Canadians. We track those in our roundup of proposed tax changes in Canada.

Sources

Not sure which of these apply to you? Talk to us.