It has been more than 18 months since Budget 2024 – and nearly a year since the previous government’s ill-fated Fall Economic Statement – and much has changed in the interim.

There is a new government in Ottawa with campaign promises to deliver on and a new administration in Washington whose protectionist policies pose a threat to Canada’s economy. These factors, together with perennial challenges related to sluggish productivity growth, housing supply and affordability.

This is widely regarded as the most hyped up budget in recent memory and as such we wanted to make sure that we provide you with an overview of the key points from this budget, as well as how this may impact you.

Spoiler alert: the budget failed to deliver on the hype with virtually no changes that impact the personal finance and taxes of average Canadians.

Some of the major initiatives include support for industries most affected by tariffs, an aim to double non-U.S. exports over the next decade, an increase in defense spending, a reduction in permanent resident and temporary resident admissions.

What impact does the budget have for you and your families?

• The previous government’s proposed capital gains changes to the increased inclusion rate for corporations and individuals is officially walked back
• There is no immediate increased tax burden for income, dividends, or capital gains from your investment portfolio
• If you have privately held business interests, there is confirmation of an increase to the Lifetime Capital Gains Exemption (LCGE) to $1.25M (from $1m). This means that for a qualified small business owner, there’s more room for tax-exempt capital gains.
• There are new tax incentives for capital investments in machinery & equipment, especially in the critical minerals sectors and low-carbon facilities
• There will be an elimination of GST for first-time home buyers (on homes up to $1M)

How much does it cost to walk back previous tax measures brought forth by the previous Liberal government?

• Canceling the capital gains tax increased costs $23.6B over six years
• Repealing the digital services tax costs $6.8B over six years
• Canceling the consumer carbon tax costs $4.2B in the current fiscal year

Overall, the budget is perhaps not quite as bold from an investment perspective as some expected. It’s important to note that as a minority government, the Liberals will need the support of a handful of opposition MPs to pass this budget. We think that’s likely given the Liberals’ are just two seats shy of a majority.

Our team will continue to stay on top of these developments, and what sort of impacts they’ll have. The Canadian investments in our portfolios have performed well this year, and we will continue to work with our portfolio advisory group to position ourselves appropriately moving forward, while considering the budget’s emphasis on clean technology manufacturing and mineral exploration.

If you have any questions about this or anything else, please reach out to us at boschmanwealth@rbc.com.

 

Source: RBC Global Asset Management “Federal Budget – 2025” – November 4th 2025 by Josh Nye