Summary#

This bill is the first act to implement Budget 2025. It changes many tax rules, launches new clean‑economy incentives, sets up “open banking” and a national framework for stablecoins, ends the federal underused housing tax, and creates an act for a National School Food Program. It also funds new housing delivery and speeds up approvals for a high‑speed rail network in Quebec and Ontario.

Key changes include:

• Taxes: higher Lifetime Capital Gains Exemption (LCGE), new $10 million capital gains exemption for sales to worker co‑ops/employee trusts, more disability supports, enhanced R&D (SR&ED), many clean‑tech credits, and faster writeoffs for business assets and new rentals.
• Housing: ends the federal Underused Housing Tax starting in 2025; extends the enhanced GST rental rebate to co‑ops and student residences; adds a 10% accelerated writeoff for purpose‑built rentals; creates and funds “Build Canada Homes.”
• Digital finance: creates open banking (consumer‑driven banking) under Bank of Canada oversight; creates a Stablecoin Act with strict redemption and reserve rules; strengthens bank rules on cheque holds and fraud.
• Climate and clean growth: adds and extends clean‑economy investment tax credits (clean electricity, clean tech, manufacturing, hydrogen, carbon capture), and sets 50‑year LNG export licence maximums.
• Other: repeals the Digital Services Tax; ends the luxury tax on aircraft and boats; backs a National School Food Program; enables the Quebec–Ontario High‑Speed Rail Network; improves biosafety rules for human pathogens; and changes sanctions, pensions, and several financial sector laws.

What it means for you#

• Families and individuals
  • Higher LCGE: more of the gain on selling a small business or farm/fishing property can be tax‑free (up to $1.25 million for sales on/after June 25, 2024).
  • Disability: more items count under the Disability Supports Deduction; the Canada Disability Benefit will not be counted as taxable income.
  • National School Food Program: sets a long‑term federal funding commitment and vision for school food (no benefit amounts are specified in this bill).
• Workers and students
  • Personal Support Workers Tax Credit: from 2026 to 2030, up to $1,100 per year (5% of eligible wages, capped) if you are an eligible personal support worker.
  • Student aid: federal aid will be denied (from Aug. 1, 2029) for students attending private, for‑profit schools outside Canada.
• Homebuilders and renters
  • Purpose‑built rentals: 10% accelerated writeoff for new eligible rental projects; expanded GST rental rebate to co‑ops and qualifying student residences.
  • Underused Housing Tax: ends for 2025 and later (the act is repealed in 2035).
• Small businesses and innovators
  • SR&ED: higher limits and more eligible spending, including some capital; broader access for certain public firms.
  • Faster writeoffs: immediate expensing for productivity assets and reinstated accelerated investment incentives.
  • $10 million capital gains exemption for selling a business to a worker co‑op; improvements to employee ownership transfers.
• Consumers and bank customers
  • Open banking: you can safely direct your bank to share your data with accredited firms (no screen‑scraping), with clear consent and dashboards.
  • Fraud protection: banks must get express consent to activate certain account features, allow you to set transaction limits, notify you of changes, and report on consumer‑targeted fraud.
  • Cheque holds: first $250 must be available immediately; removes extra delay for cheques not deposited in person.
• Crypto users and firms
  • Stablecoins: issuers must redeem at par, hold high‑quality reserves with qualified custodians, follow governance and risk rules, and be listed by the Bank of Canada. No interest/yield may be paid on the coin itself.
• Travellers and transport users
  • High‑speed rail: a legal framework to build and assess the Quebec–Ontario HSR, with tailored land tools and Indigenous knowledge protections.
  • Air travel: updated aviation safety/security rules, including a new offence for unauthorized interference with drones.
• First Nations and Indigenous governments
  • New opt‑in authority to levy value‑added taxes on fuel, alcohol, cannabis, tobacco and vaping on reserve/settlement lands.
• Sanctions and security
  • Allows Finance to require banks to report sanctioned assets and remit profits from those assets to the Receiver General.

Expenses#

Estimated impact: would increase federal tax expenditures and program spending, with some specified one‑time allocations.

• Housing and land:
  • Up to $11.5 billion from the Consolidated Revenue Fund to fund Build Canada Homes operations.
  • Up to $1.515 billion for Canada Lands Company (capital contribution or share purchases).
• Clean‑economy credits: New and expanded refundable investment tax credits (clean electricity, clean technology, manufacturing, hydrogen, CCUS) will increase tax expenditures over several years. Exact totals depend on take‑up.
• Repeals and tax changes:
  • Repeals the Digital Services Tax (potential refunds of amounts paid; amounts not specified).
  • Ends Underused Housing Tax from 2025 (revenue decrease).
  • Ends luxury tax on aircraft and vessels (revenue decrease).
• Infrastructure bank: raises the Canada Infrastructure Bank capital limit to $45 billion (not an immediate expense).
• National School Food Program Act: sets a vision and funding commitment; no amounts in this bill text.
• Borrowing Authority Act: raises the federal borrowing limit to $2.541 trillion (financing capacity; not a direct expense).

Proponents' View#

• Helps affordability and growth: larger capital gains exemption, disability supports, and school food funding support families; faster writeoffs and SR&ED upgrades spur investment and productivity.
• Boosts rental supply: GST relief for co‑ops/student housing and faster writeoffs improve project viability.
• Drives clean growth: strong, bankable clean‑economy credits to attract private capital and grid decarbonization (clean electricity ITC).
• Modern finance with safeguards: open banking empowers consumers with secure data sharing; stablecoin rules protect users with full backing and redemption at par.
• Cuts red tape to innovate: time‑limited exemptions to test clean‑tech/fintech regulation encourage competition and new services.
• Clearer, smarter enforcement: stronger lab biosafety; targeted sanctions reporting; longer LNG licence certainty for major projects.
• HSR framework: accelerates delivery while ensuring impact assessments by segment and confidentiality of Indigenous knowledge.

Opponents' View#

• Fiscal cost and revenue loss: new credits, higher exemptions, and repealed taxes reduce revenues or raise spending without firm totals; borrowing limit increase may worry fiscal hawks.
• Housing signal risk: ending the Underused Housing Tax may weaken tools to deter vacant foreign‑owned homes.
• Complexity and compliance: many tax and credit changes add administrative burden; open banking and stablecoin regimes require new oversight capacity.
• Capital gains fairness: higher LCGE mainly benefits higher‑income owners of businesses and assets.
• Consumer/data risks: open banking could increase exposure to scams or privacy breaches if not tightly enforced.
• Crypto concerns: setting a stablecoin regime may be seen as legitimizing crypto risks; strict rules could also push activity offshore.
• HSR land powers: new expropriation and right‑of‑first‑refusal tools may face opposition from affected landowners and municipalities.