On April 17, the Canadian government released its 2025 federal budget, unveiling a series of new tax measures designed to raise revenue from high-income earners and large corporations. These adjustments come as part of a broader fiscal strategy to support housing affordability, bolster healthcare services, and accelerate green energy investments.
A cornerstone of the new budget is the increase in the capital gains inclusion rate—from 50% to 66.67%—for individuals earning over CAD $250,000 annually and for corporations. This move is projected to generate billions in additional revenue over the next five years. Finance Minister Chrystia Freeland stated that the measure ensures the wealthiest Canadians contribute more toward the country's social priorities.
In tandem, the budget introduces a corporate minimum tax targeting large, profitable companies that have paid little to no taxes in recent years. This change seeks to close loopholes and reinforce the government's commitment to tax fairness, while supporting public services that benefit all Canadians.
The new tax revenues are earmarked for several high-impact initiatives. A significant portion will be directed toward the construction of affordable housing units, addressing the nationwide housing crisis. The federal government pledged over CAD $15 billion to build 250,000 homes by 2031, with a focus on urban centers where demand is most acute.
Healthcare funding also sees a notable boost. An additional CAD $11 billion is allocated over five years to support provinces and territories, with an emphasis on reducing surgical backlogs and expanding mental health services. This initiative reflects the government’s ongoing efforts to strengthen the healthcare system post-pandemic.
Another highlight is a renewed commitment to green energy and climate action. The budget outlines over CAD $9 billion in clean energy investments, including incentives for renewable energy projects and subsidies for consumers adopting electric vehicles. These measures align with Canada’s long-term goal of achieving net-zero emissions by 2050.
While the tax changes have drawn criticism from some business groups and high-income stakeholders, many economists argue they are necessary to sustain Canada’s growing social programs without increasing the federal debt burden.
In summary, the 2025 federal budget signals a shift toward progressive taxation to support critical national priorities. By targeting high-income earners and large corporations, the government aims to build a more equitable and sustainable future for all Canadians.
