2025 Federal Budget Highlights

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2025 Federal Budget Highlights

On November 4, 2025, the budget was delivered by the Honourable François-Philippe Champagne, Minister of Finance and National Revenue.

The 2025 Federal Budget focuses on stability, simplicity, and long-term growth. There are no broad tax increases or major new spending programs. Instead, the government is emphasizing restraint, modernization, and productivity.

For individuals and business owners, the goal is clear: help Canadians access benefits more easily, encourage investment in innovation and clean energy, and update trust and estate rules to maintain fairness across the system.

Economic Overview

Canada’s federal deficit is projected at $78.3 billion for 2025–26. The government aims to stabilize the debt-to-GDP ratio while maintaining funding for priorities such as housing, defence, and clean energy.

Spending will focus on programs that improve productivity, while efficiency reviews across departments are expected to reduce overlap and administrative costs. This marks a shift toward sustainable fiscal management and practical, targeted investments.

Personal and Family Tax Measures

Several measures are designed to make life more affordable, particularly for first-time home buyers, caregivers, and lower-income households.

Eliminating the GST for First-Time Home Buyers

First-time home buyers will not pay the 5 percent federal GST on new homes priced up to $1 million. For new homes between $1 million and $1.5 million, a partial GST reduction applies. This change provides meaningful savings and makes new construction more accessible for Canadians entering the housing market.

Home Accessibility Tax Credit

Starting in 2026, expenses can no longer be claimed under both the Home Accessibility Tax Credit and the Medical Expense Tax Credit. The rule prevents duplicate claims but continues to support renovations that make homes safer and more accessible for seniors or individuals with disabilities.

Top-Up Tax Credit

To balance the reduction in the lowest federal tax bracket—from 15 percent to 14.5 percent in 2025, and 14 percent in 2026—the government introduced a Top-Up Tax Credit to preserve the value of non-refundable credits such as tuition, medical, and charitable amounts. This temporary measure, available from 2025 through 2030, ensures Canadians receive the same credit value even as rates decrease.

Personal Support Workers (PSW) Tax Credit

A new refundable tax credit equal to 5 percent of eligible income, up to $1,100 per year, will be available for certified personal support workers beginning in 2026. The measure acknowledges the importance of care professionals and provides direct relief to those in long-term and community-care roles.

Automatic Federal Benefits

Starting in 2025, the Canada Revenue Agency will begin automatically filing simple tax returns for eligible Canadians who do not normally file. This will allow low-income earners and seniors to receive benefits such as the Canada Workers Benefit, GST/HST Credit, and Canada Carbon Rebate automatically. Those with more complex financial situations will continue to file regular returns.

Registered Plans, Trusts, and Estate Planning

The budget introduces several changes affecting trusts and registered plans—key tools in long-term financial and estate planning.

Bare Trust Reporting Rules

Implementation of new bare trust reporting requirements has been delayed. The rules will now apply to taxation years ending December 31, 2026, or later. This postponement gives individuals, trustees, and professionals more time to prepare for the new filing obligations.

The 21-Year Rule for Trusts

Trusts—particularly most personal or family trusts—are generally considered to have sold and repurchased their capital property every 21 years (a “deemed disposition”). This rule prevents indefinite deferral of capital-gains tax on assets that grow in value.

When property is moved on a tax-deferred basis from one trust to another, the receiving trust normally inherits the original 21-year anniversary date so that tax timing does not reset.

Some estate-planning arrangements have transferred trust property indirectly—for example, through a corporation or a beneficiary connected to a second trust—so that the transfer did not appear to be trust-to-trust. These arrangements effectively extended the period before capital gains would be recognized.

Budget 2025 broadens the anti-avoidance rule to include indirect transfers. Any transfer of property made on or after November 4, 2025, that effectively moves assets from one trust to another will retain the original 21-year schedule.

For families that use trusts in estate or business-succession planning, this change reinforces the importance of reviewing structure and timing. Trusts remain valuable for asset protection, legacy planning, and income distribution—this update simply ensures consistent application of the 21-year rule.

Qualified Investments for Registered Plans

Beginning January 1, 2027, all registered plans—RRSPs, TFSAs, FHSAs, RDSPs, and RESPs—will follow a single harmonized list of qualified investments. Small-business shares will no longer qualify for new contributions, though existing holdings will remain grandfathered. The update simplifies compliance and clarifies which assets can be held in registered accounts.

Business and Investment Incentives

For business owners, Budget 2025 provides opportunities to reinvest, innovate, and modernize operations, with emphasis on manufacturing, research, and clean technology.

Immediate Expensing for Manufacturing and Processing Buildings

Businesses can now claim a 100 percent deduction for eligible manufacturing and processing buildings acquired after Budget Day and available for use before 2030. This full write-off improves cash flow and encourages earlier expansion. The benefit will gradually phase out after 2033.

Scientific Research and Experimental Development (SR&ED)

The refundable SR&ED tax credit limit has increased from $3 million to $6 million per year, effective for taxation years beginning after December 16, 2024. This expansion strengthens support for small and medium-sized Canadian businesses investing in innovation and technology.

Tax Deferral Through Tiered Corporate Structures

To prevent deferrals of tax on investment income, new rules will suspend dividend refunds for affiliated corporations with mismatched fiscal year-ends. This ensures consistent taxation within corporate groups and aligns refund timing with income recognition.

Agricultural Co-operatives

The tax deferral for patronage dividends paid in shares has been extended to December 31, 2030, continuing to support agricultural co-operatives and their members.

Clean Technology and Clean Electricity Investment Credits

Clean-technology and clean-electricity incentives have been expanded to include additional critical minerals—such as antimony, gallium, germanium, indium, and scandium—used in advanced manufacturing and renewable energy production. The Canada Growth Fund can now invest in qualifying projects without reducing the amount of credit companies can claim, keeping the incentive structure attractive for green investment.

Canadian Entrepreneurs’ Incentive

The government has confirmed it will not proceed with the previously proposed Canadian Entrepreneurs’ Incentive. The existing Lifetime Capital Gains Exemption remains unchanged and continues to apply to the sale of qualified small-business shares.

Tax Simplification and Repealed Measures

To simplify administration and reduce complexity, two taxes are being repealed:

– Underused Housing Tax, beginning in 2025

– Luxury Tax on aircraft and vessels for purchases made after November 4, 2025

In addition, the Canada Carbon Rebate will issue its final household payment in April 2025, with no rebates available for returns filed after October 30, 2026. These changes are meant to streamline compliance and eliminate programs that were costly to administer.

Government Direction and Spending Priorities

Beyond taxation, the budget sets out the government’s broader policy priorities.

Downsizing Government: A comprehensive efficiency review is underway to eliminate duplication across departments and generate long-term savings.

Cuts to Immigration: To ease pressure on housing and infrastructure, temporary-resident levels will be reduced by about 20 percent over two years, while maintaining pathways for essential workers.

Defence Spending: Canada will invest an additional $7 billion over five years to strengthen NATO participation, Arctic defence, and cybersecurity. By 2030, defence spending is expected to reach 1.8 percent of GDP.

Oil and Gas Emission Cap: A phased-in cap starting in 2026 will allow companies to meet targets through carbon-capture and clean-tech investments rather than penalties.

Final Thoughts

For individuals, the most relevant updates include GST relief for first-time home buyers, improved benefit access, and continued tax relief for caregivers and support workers. For business owners, the focus remains on productivity—through immediate expensing, expanded SR&ED credits, and clean-tech investment incentives. For families using trusts or inter-generational structures, the clarified 21-year rule reinforces transparency in estate planning.

If you’d like to review what these changes mean for you or your business, please get in touch. We can look at your goals and make sure you’re well prepared for the year ahead.

What You Need to Know About RRIFs

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What You Need to Know About RRIFs: Turning Your RRSP Into Retirement Income

As retirement approaches, many Canadians start wondering: what happens to all the savings they’ve been building in their RRSP? The good news is, your RRSP doesn’t just stop working for you when you turn 71. Instead, it can be converted into a Registered Retirement Income Fund (RRIF)—a flexible way to draw steady income while keeping your investments working.

What is an RRIF, and how is it different from an RRSP?

An RRIF is essentially the next stage of your RRSP. While an RRSP is designed for growing your retirement savings, an RRIF is designed for drawing income from them. You’re required to convert your RRSP into an RRIF (or an annuity) by the end of the year you turn 71, though you can convert earlier if it suits your needs.

Unlike an RRSP, you can’t contribute new money to an RRIF, and you’re required to withdraw at least a minimum amount each year. The investments inside your RRIF—like GICs, stocks, bonds, mutual funds—can continue to grow tax-deferred, but your withdrawals are taxable as income.

How do you transfer funds into an RRIF and what can you hold in it?

Converting your RRSP to an RRIF is straightforward. You open an RRIF account at your financial institution and transfer all or part of your RRSP into it. There are no taxes payable on this transfer itself.

Your RRIF can hold the same types of investments you had in your RRSP. That means you can continue to hold stocks, bonds, GICs, mutual funds, ETFs, and even cash. Many people simply carry their RRSP portfolio over to the RRIF unchanged, but it’s also an opportunity to adjust your investments to align with your income needs and risk comfort level.

Do you have to convert all your RRSPs at once?

If you have more than one RRSP account, you don’t have to convert all of them into an RRIF at the same time. You can convert just one account, a portion of your savings, or all of them—whatever works best for your situation.

Some people convert one RRSP early to supplement income while leaving the rest to grow. Others choose to convert all their accounts into one or more RRIFs for simplicity. Just keep in mind that by December 31 of the year you turn 71, all RRSP funds must be converted—whether into RRIFs, annuities, or withdrawn as cash.

You can also have more than one RRIF if you prefer to keep different investments or strategies separate. Each RRIF has its own minimum withdrawal based on its balance at the start of each year.

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When should you convert your RRSP?

You must convert your RRSP into an RRIF no later than December 31 of the year you turn 71, but you don’t have to wait until then. Some Canadians choose to convert earlier, especially if they retire before age 71 and want to start drawing from their savings. Others may convert a portion of their RRSP to an RRIF early to smooth out taxable income over several years or to supplement other income sources.

Can you convert before age 71?

Yes. You can convert your RRSP to an RRIF at any age, as long as you’re ready to begin taking taxable withdrawals. For example, someone retiring at age 60 may decide to convert part of their RRSP to an RRIF and leave the rest in the RRSP to continue growing.

Converting your RRSP to a RRIF at retirement

By the end of the year you turn 71, you can no longer contribute to an RRSP — and you must convert it into an income stream. The most common way to do this is by transferring it into a Registered Retirement Income Fund (RRIF).

A RRIF keeps your investments tax-sheltered, but you’re required to withdraw a minimum amount each year, which is taxable. The minimum starts small and increases as you age.

Alternatively, you can purchase an annuity to guarantee income for life, but a RRIF gives you more flexibility to manage your investments and withdrawals.

Understanding RRIF Minimum Withdrawals

One of the key rules with an RRIF is that you must withdraw at least a minimum amount each year, starting the year after you open the account. This minimum is calculated as a percentage of the total value of your RRIF on January 1 each year, and the percentage increases as you age.

For example, if you are 71, the minimum is about 5.28% of your RRIF balance. At 80, it’s about 6.82%, and it continues to rise each year. You can always withdraw more than the minimum if you need to, but you cannot withdraw less.

If you’d like to lower your required withdrawals, you can choose to have the minimum based on your younger spouse’s age when you set up the RRIF. This option is helpful if you want to keep more money invested and reduce taxable income in the early years.

It’s important to plan these withdrawals carefully, especially if you don’t need all the income right away. Any funds you withdraw that you don’t spend can be invested in a TFSA or a non-registered account, depending on your available contribution room and tax strategy.

What if you don’t need the money immediately?

Even if you don’t need the income right now, you still have to withdraw at least the minimum each year. There’s no option to skip withdrawals altogether, but you can reinvest the money in a non-registered account or a TFSA if you have contribution room, allowing it to continue growing tax-efficiently.

How are RRIF withdrawals taxed?

Withdrawals from an RRIF are considered taxable income in the year you take them. Your financial institution will issue a T4RIF slip, which shows the taxable amount (Box 16) and any tax withheld. You report the taxable amount on line 13000 of your personal tax return under “Other income.” Any tax already withheld is credited when you file.

It’s a good idea to plan your RRIF withdrawals alongside other income sources (like CPP or OAS) to help manage your overall tax bill and avoid moving into a higher tax bracket.

What happens at death? Choosing a beneficiary and successor annuitant

When you open an RRIF, you can name a beneficiary or a successor annuitant. If you name your spouse as a successor annuitant, they can take over the RRIF without tax consequences, continuing to receive income from it. If you name your spouse or a financially dependent child as a beneficiary, the RRIF can be transferred to them with reduced tax consequences. If no beneficiary is named, the full value of the RRIF is included as income on your final tax return.

Naming the right person and understanding the tax implications is an important step in ensuring your retirement savings benefit your loved ones as you intended.

Your RRIF is more than just a requirement after age 71—it’s a flexible and valuable way to turn your hard-earned savings into a sustainable income stream. Planning how and when to convert your RRSP, understanding your minimum withdrawal requirements, and choosing a beneficiary thoughtfully can help you get the most out of your retirement savings.

If you’d like help reviewing your options, reach out—we’d be happy to guide you through the process.

Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or tax advice. Always consult a qualified professional regarding your specific situation. We are not responsible for any actions taken based on this content.

Sources:

Government of Canada. Registered Retirement Income Fund: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/completing-slips-summaries/t4rsp-t4rif-information-returns/payments/chart-prescribed-factors.html

Tax Tips. Registered Retirement Income Fund: https://www.taxtips.ca/rrsp/rrif-minimum-withdrawal-factors.htm

Supporting Your Aging Parents Without Sacrificing Your Own Stability

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Supporting Your Aging Parents Without Sacrificing Your Own Stability

It starts gradually. A missed bill here. A forgotten appointment there. Then one day you realize your parents may no longer be able to manage everything on their own. You want to help—but you also have a job, a family, and your own responsibilities. For many adults, stepping in to support aging parents financially or emotionally is one of the most challenging roles they’ll take on.

As life expectancy increases, more Canadians are finding themselves caring for elderly parents while still raising children or building their own future. The emotional weight is one thing—but the financial implications and paperwork can feel overwhelming. The good news? With thoughtful preparation and open communication, you can protect your loved ones while staying grounded yourself.

Start with Honest, Compassionate Conversations

Talking about money, health, or legal documents with your parents isn’t easy. Many people avoid these topics because they’re uncomfortable or feel “too personal.” But waiting until there’s a crisis—like a fall, hospitalization, or memory loss—can limit your options and lead to rushed decisions.

Start with small, respectful conversations. Ask your parents what they would like help with, and offer to support them in ways that don’t feel intrusive. Share a story about someone else who went through this—it can make the conversation feel less like a confrontation and more like a shared concern.

If you have siblings, try to align with them first. It’s helpful to present a united and supportive front, even if only one person is taking the lead. Having an agreed-upon approach can also reduce misunderstandings or resentment down the line.

Gather the Right Information Early

One of the best things you can do is help your parents create an “Information Checklist.” This isn’t just about knowing where their money is—it’s about understanding the full picture of their finances, obligations, and preferences.

Here are some items to include in that checklist:

  • Personal information: Social Insurance Number, health care card, date of birth, current address, emergency contacts
  • Financial accounts: bank accounts, insurance policies, pensions, RRSPs/RRIFs, TFSAs
  • List of monthly bills: utilities, credit cards, insurance premiums, phone, internet, property tax
  • Legal documents: will, power of attorney (financial and medical), healthcare directive, deeds or titles
  • Login credentials (if possible): online banking, CRA account, utility portals
  • Health records: medication list, primary doctor, pharmacy, care history

Organize everything into one place—either a binder, secure folder, or encrypted digital file. The goal isn’t to take control right away—it’s to be ready if and when it’s needed

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Understand the Legal Side of Helping

Even if your parents trust you to step in, you can’t simply start managing their accounts without legal authority. A power of attorney (POA) document gives you the right to act on their behalf for financial and/or medical matters. This must be signed while your parent is mentally capable.

If you already have POA documents in place, don’t stop there. Reach out to their bank, insurance company, and investment firm to confirm they accept the documents—or if they require their own internal forms. Some institutions may ask for a doctor’s letter confirming incapacity before they will recognize the POA.

Also consider notifying government agencies like Service Canada or provincial health bodies if you have POA status. It can take time for your authority to be processed, so doing it in advance saves delays later.

Without a valid POA, you may need to apply for guardianship or trusteeship through the courts, which can be a lengthy and stressful process.

Create a Plan—And Keep It Flexible

Every parent’s situation is unique. Some may be fiercely independent and want to remain hands-off. Others might be relieved to delegate things like bill payments or appointment scheduling. The key is to agree on a shared plan that respects their wishes while also addressing practical concerns.

For some families, that might mean gradually taking on tasks like organizing bill payments, helping with taxes, or reviewing insurance coverage. For others, it could involve preparing for bigger decisions—like exploring home care options or moving to assisted living.

Try to balance compassion with clarity. It’s okay to say, “I want to make sure everything is in place now, so we don’t have to scramble later.” Helping your parents remain involved in decisions for as long as possible preserves their dignity and autonomy.

You can also revisit the plan as their needs evolve. A yearly check-in to review their financial documents, renew insurance policies, and update contact information is a great habit to adopt.

Use Tools and Resources to Lighten the Load

Managing someone else’s affairs can feel like a second job. Thankfully, there are tools that can help. Automatic bill payments and direct deposit can reduce the risk of missed due dates. Transaction monitoring services can flag suspicious activity and help prevent fraud. Some families use shared calendars or caregiver apps to stay on top of appointments and responsibilities.

Look into local and government resources too. Your province may offer programs that subsidize home care, equipment, or transportation. Some non-profits run adult day programs or offer respite services for caregivers.

If your parents have insurance—like long-term care coverage or disability insurance—review the policy now. Understanding what it does (and doesn’t) cover will help you avoid surprises later.

Moving Forward with Confidence

Caring for aging parents isn’t just about responding to emergencies—it’s about planning ahead so everyone feels supported, respected, and safe. By opening the lines of communication early, organizing important documents, and clarifying legal authority, you’ll be in a much better position to help when it’s needed most.

This stage of life can feel overwhelming, but you don’t have to go through it alone. Start by creating a simple checklist with your parents. Schedule a conversation this month—just one. Taking that small first step today can make a big difference tomorrow. We can help.

Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or tax advice. Always consult a qualified professional regarding your specific situation. We are not responsible for any actions taken based on this content.

Why a Critical Illness Insurance Top-Up Could Make a Big Difference

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Most of us don’t expect to face a serious illness in our lifetime. But the truth is, health challenges such as cancer, heart disease, or stroke are more common than many people realize. In fact, about half of Canadians will develop cancer at some point in their lives. The question is—would your family or business be financially ready if something unexpected happened?

Critical illness insurance is designed to provide a lump-sum payment if you’re diagnosed with a covered illness. Many employees have some level of coverage through work, and some business owners purchase policies personally. But here’s the challenge: the amount of coverage included in a standard policy often isn’t enough to fully protect your income, household, or business. That’s where a “top-up” comes in.

Adding extra coverage can help close the gap, offering peace of mind and flexibility at a time when you’d want to focus fully on recovery.

Understanding the gap in coverage

Group insurance provided through an employer is a valuable benefit, but it usually comes with limits. For example, coverage amounts may be capped at a set level, such as $25,000 or $50,000. While helpful, this amount might not go far if you’re facing months away from work or costly medical treatments not fully covered by government health care.

For families, this shortfall can mean dipping into savings or going into debt just to keep up with everyday bills. For business owners, it could mean not having enough cash flow to keep operations running smoothly while stepping away to focus on health. A top-up ensures your coverage reflects your actual financial responsibilities, not just a general amount offered in a group plan.

Why families consider a top-up

If you’re raising children or supporting loved ones, an unexpected illness can bring financial stress on top of emotional strain. Mortgage payments, daycare costs, grocery bills, and education savings don’t pause when life takes a turn. A top-up can provide additional funds to help cover household expenses or even allow a spouse to take time off work to provide care.

Think of it as a financial cushion that allows your family to focus on what matters most—supporting your recovery—without the added worry of how to make ends meet.

Why employees might need more than their work plan

Relying only on your workplace benefits can leave you underinsured. Employer coverage usually ends if you change jobs, retire, or if your company makes changes to its benefits package. That means you could lose coverage at a time when it might be harder to qualify for new insurance.

By topping up your coverage personally, you’re not only increasing your protection—you’re also making sure you have something portable that stays with you, no matter where your career takes you. This stability can be especially valuable for professionals in industries where job changes are common.

Why business owners look at top-ups differently

For business owners, the stakes are even higher. A serious illness doesn’t just affect you personally—it can affect your entire company. From paying employees and suppliers to covering rent and utilities, your business may still need to run while you’re focused on treatment and recovery.

A top-up can provide a financial buffer to keep things running smoothly. It may also give you flexibility to hire temporary help, reduce workload, or take the time you need without rushing back before you’re ready. This not only protects your own livelihood but also helps safeguard your employees and clients who depend on you.

The benefits of a top-up

When deciding whether to add more coverage, here are some of the benefits families, employees, and business owners often value:

  • Peace of mind: Knowing you’re covered beyond the basics can relieve stress.
  • Financial flexibility: The lump-sum payment can be used for anything—from medical costs to everyday expenses.
  • Control: Unlike some insurance benefits, you choose how the funds are used.
  • Portability: A personal top-up stays with you, even if your job changes.
  • Business continuity: For entrepreneurs, extra coverage can help keep the business stable while you recover.

At its core, a critical illness insurance top-up is about creating a stronger safety net. It’s about having the right level of protection for your specific needs, rather than relying on a “one-size-fits-all” amount that may fall short.

Life is unpredictable, but preparing for the unexpected can make a big difference. By topping up your coverage, you’re helping ensure that if illness strikes, you and your loved ones can focus on what really matters—healing and moving forward.

If you’re unsure how much coverage is right for you, it may help to review your current benefits, your family’s expenses, and any business obligations you’re responsible for.

This is for informational purposes only and does not constitute financial, legal, or tax advice. Always consult a qualified professional regarding your specific situation. We are not responsible for any actions taken based on this content.

Helping Employees Get the Most Out of Their Health Benefits

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Helping Employees Get the Most Out of Their Health Benefits

You can provide the most generous benefits package in the world, but if employees don’t understand how to use it, it won’t have the impact you hoped for. Across Canada, many employees leave valuable health and wellness resources untapped simply because they don’t know what’s available or how to access it. For business owners and HR professionals, educating employees about their benefits isn’t just a nice extra—it’s an essential step toward creating a healthier, more loyal, and more productive workforce.

When Benefits Go Unused, Everyone Misses Out

Offering benefits is a major investment. Extended health coverage, dental care, paramedical services, and wellness allowances all come with costs to the company. When employees fail to take advantage of these resources, it’s not only a missed opportunity for them—it’s also a lost return on investment for the organization.

Imagine a scenario: an employee suffers ongoing back pain but doesn’t realize physiotherapy is covered under your plan. They avoid treatment, their pain worsens, and productivity drops. Months later, a preventable issue becomes a bigger concern that impacts both their well‑being and your team’s efficiency. This is what happens when benefits are underused—they don’t provide the intended health, morale, or retention impact.

Educating employees ensures they view benefits not as fine print in a handbook but as tools to support their daily lives. A team that knows how to access preventative health care, mental health services, and family coverage options is a team that stays healthier and feels more valued.

Why Health Benefits Education Can Be Challenging

Despite the clear value, helping employees understand health benefits often comes with hurdles.

Information overload on day one: New hires receive a mountain of onboarding materials. By the time they get to the benefits booklet, attention and energy are running low.

Confusing terminology: Words like “deductible,” “co‑insurance,” or “coordination of benefits” are not part of everyday language. Without translation into plain English, many employees tune out.

Irregular communication: Many organizations only discuss benefits once a year during open enrollment. Without reminders or ongoing conversations, details fade quickly.

Reactive awareness: Employees often learn about benefits only when a medical issue arises. By then, stress and urgency can make it harder to absorb new information.

Turning Health Benefits into Everyday Value

Clear and consistent communication helps employees view their benefits as practical tools rather than abstract policies. Here are strategies to bring health benefits to life:

Break information into small, digestible pieces
: Instead of a single benefits session, share one feature at a time. For instance, start with paramedical coverage one month, mental health supports the next, and vision care later. This keeps information approachable and memorable.

Use relatable examples
: Paint a picture of real-life use. “If your child needs braces, our dental plan can cover 50% of the cost up to $2,000” is easier to grasp than a page of percentages and annual maximums. Stories connect the benefit to employees’ daily lives.

Incorporate wellness education into your culture
: Lunch‑and‑learns, wellness newsletters, or quick “Did you know?” messages in internal chats can keep health resources top of mind. The goal is to normalize talking about benefits as part of workplace well‑being.

Highlight preventative care
: Preventative services—like annual eye exams, physiotherapy after minor strains, or mental health counselling—often save employees and employers from bigger issues down the road. When staff understand that benefits support staying healthy, not just reacting to illness, they’re more likely to use them proactively.

Offer multiple ways to learn
: Some employees prefer reading a guide, others learn best through short videos, and some want to ask questions in a small group session. A mix of formats ensures the message reaches everyone.

Measuring the Impact of Your Efforts

It’s important to know whether your education efforts are working. Instead of guessing, consider these approaches:

Track utilization rates for paramedical services, wellness allowances, and mental health support. An increase often reflects better awareness.

Monitor enrollment levels for optional coverage, such as enrolling in optional critical illness protection.

Collect employee feedback via short surveys to gauge confidence in understanding their benefits.

Watch for retention improvements and fewer sick days, as engaged employees tend to stay longer and take a more proactive approach to their health.

Even small increases in understanding can create noticeable improvements in morale and the return on your benefits investment.

When employees know their benefits, they feel supported. When they use those benefits, they’re healthier, happier, and more productive. And when they see their workplace investing in their well‑being, loyalty naturally grows.

Helping employees understand their health benefits is an ongoing effort, not a single presentation. If your organization hasn’t revisited how benefits are communicated, this is a perfect time to start. A clear, proactive education strategy can turn an underused expense into a meaningful tool for engagement and wellness.

We can help you create a tailored communication strategy to educate your team, improve benefit utilization, and strengthen employee loyalty.

Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or tax advice. Always consult a qualified professional regarding your specific situation. We are not responsible for any actions taken based on this content.

OAS Clawback 2025: What Retirees Need to Know About the Recovery Tax

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OAS Clawback 2025

If you’ve worked hard to build your retirement income, the last thing you want is to see your government benefits clawed back. Yet for many Canadians, the Old Age Security (OAS) recovery tax—commonly called the OAS clawback—can quietly reduce this valuable benefit.

Here’s how the recovery tax works in 2025, what happens if you delay OAS to age 70, and the strategies we use to help our clients minimize or avoid the clawback.

What is the OAS Recovery Tax?

OAS is a monthly benefit available to most Canadians aged 65 and older. However, once your income exceeds a certain level, the government recovers part or all of your OAS through the recovery tax.

This is calculated based on Line 23400 of your tax return—net income before adjustments. In 2025, the clawback begins when your income exceeds $93,454. For every dollar above that amount, you must repay 15 cents of your OAS.

If your income reaches approximately $151,668 (age 65–74) or $157,490 (age 75+), you could lose your entire OAS benefit for the year.

How Much is the OAS Benefit in 2025?

From July through September 2025, the maximum monthly OAS payment is:

  • $734.95 for individuals aged 65–74 (about $8,820 annually)

  • $808.45 for individuals aged 75+ (reflecting a 10% enhancement introduced in 2022)

These amounts are indexed quarterly to inflation and are subject to clawback if your Line 23400 income exceeds the threshold.

What Happens if You Delay OAS Until 70?

You can choose to delay receiving OAS up to age 70, increasing your monthly benefit by 0.6% for each month deferred—a total boost of up to 36% if you wait the full five years.

While a higher payment may sound appealing, it can also lead to larger OAS repayments if your income—including CPP, investment returns, or pension income—exceeds the recovery threshold. Delaying OAS often makes sense for healthy individuals who expect to live into their late 80s or beyond and have lower taxable income during the deferral period.

How the OAS Recovery Tax Works

Example: Alan is 68 and receives the maximum OAS: $8,820 annually. In 2025, the clawback threshold begins at $93,454. Alan’s line 23400 income is $100,000—that’s $6,546 over the clawback threshold. As a result, he must repay: $6,546 × 15% = $981.90

This leaves Alan with $7,838.10 in OAS benefits for the year. If he earns more, the repayment increases proportionally. Once Alan’s income reaches around $151,668 (if aged 65–74) or $157,490 (if aged 75+), his entire OAS would be clawed back.

The recovery tax calculation is automatic and appears on your Notice of Assessment each spring, adjusting your OAS payments for the following July–June period.

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Strategies to Reduce or Avoid the OAS Clawback

The good news? There are practical ways to lower your Line 23400 income without compromising your lifestyle. Here are some of the strategies we use to help our clients keep more of their benefits:

Use a TFSA for Retirement Income

Withdrawals from a Tax-Free Savings Account (TFSA) don’t count toward Line 23400. Drawing income from a TFSA instead of taxable accounts can help preserve your OAS and reduce your tax burden.

Manage RRIF Withdrawals

RRIF withdrawals are fully taxable and included in Line 23400. If you don’t need the full minimum withdrawal, we may recommend delaying full RRSP-to-RRIF conversion or converting just part each year starting at age 65. This can help smooth your income and avoid large spikes.

Delay OAS or Split Withdrawals Over Time

If you’re planning to delay OAS, we’ll help ensure you’re not unintentionally stacking income in the deferral years. Likewise, we can help you spread RRSP-to-RRIF conversions over several years to avoid unnecessary spikes in income.

Pension Income Splitting

If you’re married or in a common-law relationship, you can split up to 50% of eligible pension income with your spouse. This reduces your taxable income and can keep you below the clawback threshold—especially effective when one spouse earns significantly less.

Choose Tax-Efficient Investments

Not all investment income is taxed equally:

  • Capital gains: 50% taxable; more clawback-friendly

  • Eligible dividends: grossed up for Line 23400 purposes, potentially triggering more clawback despite the tax credit

  • Interest income: fully taxable and the least efficient for minimizing clawback

We can help structure your investments to be as clawback-friendly as possible.

Donate Securities Instead of Cash

Donating appreciated publicly traded securities directly to a registered charity eliminates the capital gains tax, reduces net income, and supports a cause—all while lowering recovery tax exposure.

Defer Large Income Events

Selling a property, realizing a large capital gain, or cashing a pension lump sum can push you into full clawback territory. If possible, we can help you plan these events to spread them over several years or delay them to a lower-income year.

Consider Leveraged Investing

Some higher-net-worth clients use leveraged investment strategies—borrowing to invest in tax-efficient, capital-gains-producing assets. Interest may be deductible, and investment income can be structured to reduce Line 23400. This is a high-risk strategy and something we’ll discuss carefully if appropriate.

Talk to Your Financial Advisor

Everyone’s income, retirement timing, and tax situation are unique. That’s why we take the time to understand your goals, project your Line 23400 income, explore different scenarios, and build a personalized strategy designed to minimize the recovery tax while keeping your lifestyle in mind.

The OAS recovery tax can quietly chip away at your retirement income—but it doesn’t have to. With the right guidance and a plan tailored to you, it’s possible to keep more of what you’ve worked so hard to earn.

If you’re already retired or approaching retirement, now is the perfect time to sit down and talk. Together, we’ll review where you stand, explore your options, and build a strategy that keeps more of your income working for you. We’re here to help you make the most of your retirement—let’s get started.

Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or tax advice. Always consult a qualified professional regarding your specific situation. We are not responsible for any actions taken based on this content.

Sources: Old Age Security Payment Amount – Government of Canada: https://www.canada.ca/en/services/benefits/publicpensions/old-age-security.html

Old Age Security Pension Recovery Tax– Government of Canada: https://www.canada.ca/en/services/benefits/publicpensions/old-age-security/recovery-tax.html 

Personal Life Insurance Planning

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Personal Life Insurance Planning

When thinking about life insurance, one of the most important steps is figuring out how much coverage you need. Everyone’s situation is unique, but a helpful starting point is understanding your coverage options and thinking about the areas of your life that need protection.

Understanding the Different Types of Life Insurance

There are four main types of life insurance: Term, Term to 100, Universal Life, and Whole Life. Here’s how they compare:

Term Life Insurance

Term life insurance provides coverage for a specific number of years—typically 10, 20, or 30 years. It offers fixed premiums for the length of the term, and if renewed, premiums will increase based on your age. This type of insurance provides a fixed death benefit during the coverage period and does not build any cash value.

Ideal For: Families with children, people with mortgages or temporary debts

Death Benefit – Common Uses: Income replacement, mortgage protection, child education

Term to 100

Term to 100 offers lifetime coverage with level premiums that are payable until age 100. It is a cost-effective way to get permanent insurance, as it does not accumulate cash value. The policy provides a death benefit as long as premiums are paid.

Ideal For: Those wanting lifetime coverage without investment features

Death Benefit – Common Uses: Final expenses, estate taxes, leaving a small legacy

Universal Life Insurance

Universal life insurance is a flexible form of permanent insurance that includes both a death benefit and a tax-advantaged investment component. You can adjust your premium payments and death benefit within certain limits. The policy’s cash value depends on how much you contribute and the performance of the chosen investments. Funds can be used for investment growth, savings, personal use, and retirement planning.

Ideal For: People who want long-term coverage with savings but require flexibility

Death Benefit Uses: Advanced estate planning, long-term wealth transfer

Cash Value Uses: Emergency funding, retirement planning, education funding, large purchases

Whole Life Insurance

Whole life insurance provides permanent coverage with level premiums and a death benefit. It also builds cash value over time, which you can borrow against, withdraw from, or use to help pay premiums. The cash value may be accessed for emergencies, supplementing retirement income, large purchases, or other long-term needs.

Ideal For: People who want long-term coverage with savings

Death Benefit Uses: Estate planning, legacy, long-term protection

Cash Value Uses: Emergency funding, retirement planning, education funding, large purchases

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The need for life insurance

Once you understand your options, the next step is identifying the purpose of the insurance in your life. Most needs fall into three main categories:

Dependents

Whether it’s young children, a spouse, or even elderly parents, many families have one or more people who depend on their income. In these cases, life insurance plays an important role in maintaining the household’s financial stability. It can help pay for groceries, monthly bills, childcare, tuition, or even a car replacement down the road. Think of it as a financial bridge that helps your family maintain their standard of living while they adjust to life without your income.

Debts

Do you have a mortgage? A home equity line of credit? Maybe a personal loan or credit cards with balances that carry over month to month? If something unexpected were to happen, life insurance can ensure those debts don’t fall on your family’s shoulders. A properly structured policy can provide enough to pay off major liabilities, giving your family financial breathing room and the security of keeping their home or lifestyle intact.

Final Expenses

End-of-life costs often catch families off guard. Between funeral expenses, legal and accounting fees, final tax returns, and probate costs, the total can easily reach into the tens of thousands. A life insurance policy can provide immediate funds to help cover these costs without dipping into savings or relying on credit. For many retirees or aging parents, this is one of the biggest reasons to have a policy—even a small one.

Bringing It All Together

Choosing the right life insurance depends on your personal and family goals. Whether you’re protecting your home, your loved ones’ lifestyle, or planning for future expenses, there’s a policy that fits your needs.

If you’re not sure where to start, a good first step is reviewing your current debts, thinking through future costs, and considering who depends on you.

We’re here to help you choose the right coverage—get in touch.

Disclaimer

This article is for informational purposes only and does not constitute financial, legal, or tax advice. Always consult a qualified professional regarding your specific situation. We are not responsible for any actions taken based on this content.

2025 New Brunswick Tax Rates

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Stay updated on New Brunswick’s tax rates for 2025! This infographic covers marginal tax rates, federal tax brackets, and personal marginal tax rates for various income levels. Whether you’re calculating capital gains, dividends, or general taxable income, this breakdown helps you plan efficiently.

Source: Canada Revenue Agency. Canadian Income Tax Rates for Individuals – Current and Previous Years. Government of Canada, https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/canadian-income-tax-rates-individuals-current-previous-years.html

Tax Tips for Filing Your 2024 Income Tax Return

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The deadline for filing your 2024 income tax return is April 30, 2025. Stay informed about the latest tax changes and benefits available to maximize your savings and ensure compliance. This guide outlines the key updates and important deductions and credits separated into sections for Individuals and Families, and Self-Employed Individuals.

For Individuals and Families

Alternative Minimum Tax (AMT)

  • Increased minimum tax rate and basic exemption threshold.

  • Modified calculation for adjusted taxable income affecting foreign tax credits and minimum tax carryovers.

  • Limited value on most non-refundable tax credits.

Canada Pension Plan (CPP) Enhancement

• The standard CPP contribution rate remains at 5.95% for both employees and employers on earnings up to $68,500 (the Year’s Maximum Pensionable Earnings or YMPE) in 2024.

• Additionally, employees and employers each contribute an extra 4% on earnings between the YMPE ($68,500) and the Year’s Additional Maximum Pensionable Earnings (YAMPE) of $73,200 in 2024.

Home Buyers’ Plan (HBP)

  • Withdrawal limit increased from $35,000 to $60,000 after April 16, 2024, with temporary repayment relief available.

Volunteer Firefighters and Search and Rescue Volunteers

  • Amounts increased from $3,000 to $6,000 for eligible individuals completing at least 200 hours of combined volunteer service.

Basic Personal Amount (BPA)

• For 2024, the Basic Personal Amount (BPA) has increased to $15,705 for taxpayers with net income up to $173,205.

• For taxpayers with net incomes above this amount, the BPA is gradually reduced, reaching a minimum of $14,138 at incomes of $235,675 or higher.

Short-term Rentals

  • Expenses related to non-compliant short-term rentals are no longer deductible after January 1, 2024.

Popular Tax Credits and Deductions

Canada Training Credit (CTC) Eligible taxpayers aged 26 to 65 can claim this refundable tax credit to cover a portion of eligible tuition and fees for training or courses to enhance their skills.

Canada Caregiver Credit (CCC) This non-refundable tax credit supports individuals caring for family members or dependents with a physical or mental impairment. The amount varies based on the dependent’s relationship, net income, and circumstances.

Child Care Expenses Child care expenses, such as daycare, nursery schools, day camps, and boarding schools, are deductible if incurred to enable a parent or guardian to work, pursue education, or conduct research.

Disability Tax Credit (DTC) The DTC provides a non-refundable tax credit for individuals with disabilities or their caregivers to reduce the amount of income tax payable. Applicants must have a certified disability lasting at least 12 months.

Moving Expenses Deductible moving expenses include transportation and storage costs, travel expenses, temporary living costs, and incidental expenses incurred when relocating at least 40 kilometers closer to a new work location, educational institution, or business location.

Interest Paid on Student Loans Interest paid on eligible student loans can be claimed as a non-refundable tax credit. The loans must be under federal, provincial, or territorial student loan programs.

Donations and Gifts Donations made to registered charities or other qualified organizations qualify for non-refundable federal and provincial tax credits. Typically, you can claim eligible amounts up to 75% of your net income.

GST/HST Credit The GST/HST credit is a quarterly refundable payment designed to offset the impact of sales tax on low to moderate-income individuals and families. Eligibility is automatically assessed based on your annual tax return.

For Self-Employed Individuals

CPP Contributions

  • Enhanced CPP contribution rate for self-employed individuals.

Filing and Payment Deadlines

  • Tax Return Deadline: June 16, 2025 (June 15 is Sunday).

  • Balance due must be paid by April 30, 2025.

Reporting Business Income

  • Report income on a calendar-year basis for sole proprietorships and partnerships.

Digital Platform Operators

  • New reporting rules requiring platform operators to collect and report seller information.

Mineral Exploration Tax Credit

  • Eligibility extended for flow-through share agreements signed before April 2025.

Need Assistance?

If you’re unsure about your eligibility for specific credits or deductions, reach out to your tax consultant or tax advisor for personalized guidance. They can help you optimize your tax return, maximize your savings, and ensure compliance with CRA regulations.

Sources

Bank of Canada Announces Interest Rate Cut Amid Economic Uncertainty

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On March 12, the Bank of Canada announced another reduction in its benchmark interest rate, bringing it down to 2.75%. This decision comes as the Canadian economy faces ongoing pressures, including uncertainty surrounding U.S. trade policies, slower job growth, and persistent inflation concerns.

These rate adjustments aim to help stabilize the economy during this unpredictable time, providing support to consumers and businesses as policymakers navigate a challenging economic landscape.

Staying Focused Amid Market Fluctuations

During times like these, market uncertainty can feel overwhelming, but history has shown that markets tend to recover over time. While short-term fluctuations can be unsettling, a well-balanced and diversified approach helps manage risk and keeps you positioned for long-term success. The key is to remain patient and avoid making impulsive decisions based on temporary market movements.

We understand that recent market volatility, driven by changing trade policies and shifting interest rates, may cause concern about how your investments and finances could be affected. It’s natural to feel uncertain during periods of economic turbulence. However, it’s important to remember that markets have historically proven resilient, eventually recovering from downturns and periods of uncertainty.

Rather than reacting to day-to-day changes, it’s important to stay focused on the bigger picture. Market cycles come and go, and those who stay committed to a structured investment approach are often better positioned to navigate challenges and take advantage of future opportunities.

We’re Here to Support You

Your financial well-being remains our highest priority. If you have questions or concerns about your investments or if you’d simply like reassurance about your current strategy, please reach out. We’re always here to offer guidance, clarity, and support as you navigate these uncertain times.

Let’s connect—schedule a call with us today.

Source: Bank of Canada. “Bank of Canada Announces Interest Rate Cut Amid Economic Uncertainty.” 12 Mar. 2025. 

https://www.bankofcanada.ca/2025/03/fad-press-release-2025-03-12/