Federal budget 2025 highlights

Updated on November 6, 2025. 

The first federal budget under Prime Minister Mark Carney has arrived. This is the first budget in over 17 months, and the changes could affect group retirement members now, and in their future planning. We explore highlights that we believe will be most relevant to employers, plan sponsors, and Canadian workers. 

Retirement plans

Simplifying rules for registered plan investments 

As you know, registered plans, such as group retirement plans, can only offer qualified investments. Over the years, the rules around these investments have expanded and become difficult to understand. Right now, to qualify, a corporation or trust has to register with the CRA—a complex process, which is why last year’s budget invited stakeholders to provide suggestions on how the rules could be modernized. 

Budget 2025 proposes replacing this process and instead have two new categories of qualified investments that don’t need registering. There are also changes to the rules for registered plan investments in small businesses, including:

• RRSPs, RRIFs, TFSAs, RESPs, and FHSAs may soon be able to invest in specified small business corporations, venture capital corporations, and specified cooperative corporations
• RRSPs, RRIFs, RESPs, and DPSPs may not be able to invest in eligible corporations and interests in small business investment limited partnerships and small business investment trusts anymore, although interests acquired before 2027 under the current rules will still be allowed. 

If approved, these changes would apply as of January 1, 2027. The qualified investment rules for registered plans (all except RDSPs) will be consolidated into the definition in the Income Tax Act for simplicity. Likewise, qualified investments will be updated and reorganized by asset class in the Income Tax Regulations.

Financial services

Banking fees

There are several proposed changes to banking fees and processes, including:

• Prohibiting investment and registered account transfer fees, which cost Canadians an average of $150 per account; the government plans to publish draft regulations on the matter by the spring of 2026 
• A review of fees charged by financial institutions, including ATM and Interac e-Transfer fees
• A plan to explore cross-border bank transfer fees, including fees for foreign exchange
• Finding ways to simplify moving primary chequing accounts to another Canadian institution 
• Increasing the first amount of immediately available funds from deposited cheques to $150 from $100
• Reducing the number of days banks hold deposited cheque funds before release

National anti-fraud strategy

Budget 2025 announced the government’s intention to develop a whole-of-government National Anti-Fraud Strategy, citing the increased sophistication of fraud and its effect on Canadians, especially seniors and newcomers.

This strategy will bring together financial institutions, technology, and telecommunications companies to develop a cross-sectoral approach to protect Canadians from evolving and highly complex fraud schemes.

Budget 2025 also announced its intention to amend the Bank Act: 

• Requiring banks to adopt anti-fraud policies
• Letting customers set transaction limits, consent to account features, and disable unnecessary ones
• Mandating banks to report fraud data to the Financial Consumer Agency of Canada, with anonymized data informing future policy 

A new Financial Crimes Agency will become Canada’s lead enforcement body against financial crimes, combining police and civilian expertise to tackle money laundering, organized crime, and online scams. Legislation will be introduced by spring 2026.

Tax

Income tax cut

Announced earlier this year, there’s a reduction on the lowest personal tax income rate, dropping the rate from 15% to 14%, and affecting nearly 22 million Canadians. According to Minister of Finance and National Revenue François-Philippe Champagne, the move could save families up to $840 per year. 

First-time home buyers’ GST rebate

There could be a new incentive for buyers looking to purchase a newly constructed home. The GST could be eliminated for first-time home buyers on new homes up to $1 million and reduced on homes between $1 million and $1.5 million. According to the budget, this measure will benefit buyers under 34.  

Automatic federal benefits

Starting in 2027, low-income Canadians could see their taxes filed automatically, allowing for the automatic receipt of government benefits such as the GST/HST credit and the Canada child benefit, among others. The change will affect one million people in its first year and more than five million by 2028.

Workforce

Immigration cuts

Plans are in place to reduce both permanent resident numbers and temporary resident admissions over the next three years. This decision could affect members of your workforce or their families.

• Permanent residents—Target of 380,000 yearly; there were 395,000 in 2025
• Temporary residents—Target of 385,000 in 2026 and 370,000 in 2027 and 2028; there were about 673,650 in 2025

Benefits

Healthcare

There were very few references to healthcare in the budget aside from the continuation of some social programs from the previous government, including the $10-a-day childcare program, Canadian Dental Care Plan, and pharmacare. 

Canada Disability Benefit supplement

Introduced in Budget 2024, the Canada Disability Benefit was intended to fill a gap between the Canada Child Benefit and the Old Age Security for persons with disabilities, supplementing existing provincial and territorial income support measures. 

In Budget 2025, a proposed one-time payment of $150 will help those receiving the Canada Disability Benefit to offset the cost of disability tax credit certification or re-certification. Recipients can receive up to $2,400 annually ($200 per month) with the credit. 

Next steps

The budget presentation is just the first step, and debates will follow. As a minority government, the Liberals will either need support from another party or for enough abstentions to allow the Liberal caucus to represent a majority of votes. A final vote on the budget’s approval is projected for November 17. 

1 Federal budget, 2025.