Canada Implements Middle-Class Tax Cuts and Business Incentives

The Treasury Board of Canada implemented several tax changes for the 2025 season to provide middle-class relief and strengthen national competitiveness amid an ongoing trade war. The primary measure is a middle-class tax cut that reduces the first tax bracket from 15 percent to 14.5 percent for the first $57,000 earned in 2025, with a further decrease to 14 percent planned for 2026.

To support businesses and self-employed individuals, the federal government expanded the Accelerated Investment Incentive. This allows for 100 percent immediate expensing of indispensable assets, including manufacturing buildings and electric vehicles.

At the provincial level, the Government of Quebec reduced its first tax bracket to 14 percent. However, the provincial administration also eliminated several university deductions and credits, including expert tax holidays and foreign research credits. Additionally, Quebec is transitioning most official correspondence to French only.