Recent changes in the federal budget are poised to significantly impact the financial landscape for Canadians. From tax reductions to available public services, numerous measures have been proposed that aim to alleviate financial burdens and improve access to essential amenities.
Key Changes in the Federal Budget
Tax Reductions for Middle-Class Canadians
On July 1, the marginal tax rate for the lowest income bracket dropped from 15% to 14%. This change is expected to return up to $420 to affected taxpayers. Approximately 45% of this tax relief will benefit Canadians earning below $57,400, while 40% will assist those with incomes ranging from $57,400 to $114,800.
The total value of this tax reduction is projected at $27.2 billion over five years, currently under discussion in Parliament as part of Bill C-4.
Elimination of GST for First-Time Homebuyers
The budget also proposes the removal of the Goods and Services Tax (GST) for first-time homebuyers purchasing new homes valued at up to $1 million. For homes valued between $1 million and $1.5 million, a reduction in GST is planned. Buyers must finalize contracts by May 27, 2025, to qualify.
This initiative aims to make homeownership more accessible, particularly for young families, with an estimated tax relief of $3.9 billion over five years.
Reduction of Banking Fees
The government is reviewing banking fees, including those related to ATMs and Interac transfers. The goal is to reduce unnecessary costs for Canadians. An estimated $150 is currently incurred in average fees for transferring investment accounts between institutions, which Ottawa plans to eliminate.
Details regarding these banking fee changes are expected to be released in 2026. These measures will affect federally regulated institutions, which include banks but exclude credit unions like Desjardins.
Access to Cultural and Recreational Activities
The federal budget proposes free access to national parks and museums during the holiday season, aimed at increasing public engagement. The “Un Canada fort” pass will provide free or discounted entry to national parks, museums, and art galleries, as well as VIA Rail services.
Since its launch in summer 2025, this initiative has reportedly led to a 15% increase in museum attendance and a 10% boost in visits to Parks Canada sites.
- Funding for the Pass: $116 million will be allocated over two years.
Improving Access for Low-Income Canadians
Many Canadians with low income do not file tax returns, losing access to benefits like the GST/HST credit and the Canadian Child Benefit. The government plans to automate the disbursement of federal benefits starting with the 2026 tax year, requiring individuals to verify prefilled tax returns.
- Impact: Approximately 5.5 million low-income Canadians will benefit by the 2028 tax year.
Provisions for Individuals with Disabilities
The budget includes a one-time payment of $150 to taxpayers applying for or renewing a disability tax certificate, which facilitates access to the Canadian Disability Benefit. It also seeks to legislate that benefits will not be included in income calculations under the Income Tax Act.
- Funding for Disability Measures: $115.7 million will be invested over four years.
These proposed changes, currently under consideration, signal a concerted effort by the government to enhance financial relief and accessibility for a wide range of Canadians.
