Liberal Election Platform: Potential Tax Related Changes

Posted on September 22nd, 2025 in Domestic Tax, General Business

With the most recent federal election resulting in a Liberal minority government, individuals and businesses should be aware of their tax-related platform proposals, as summarized in the listing below. Many are broad and lack detail, and some were previously announced by the former government.

Business items included:

• reintroducing the Multi-Unit Rental Building (MURB) tax incentive for home builders (first introduced in the 1970s);
• broadening the critical mineral exploration tax credit by expanding qualifying minerals to include critical minerals necessary for defence, semiconductors, energy, and other clean technologies;
• expanding eligible activities under Canadian exploration expenses to include the costs of technical studies, such as engineering, economic, and feasibility studies for critical minerals projects;
• modifying the clean technology manufacturing investment tax credit to include critical mineral mine development expenses for brownfield sites while expanding the list of priority critical minerals;
• extending the Carbon Capture, Utilization and Storage (CCUS) investment tax credit to 2035; • reinstating the CCA accelerated investment incentive, including immediate expensing for manufacturing or processing machinery and equipment, clean energy generation, energy conservation equipment, and zeroemission vehicles;
• increasing the claimable amount under the Scientific Research and Experimental Development tax incentive program (SR&ED) for Canadian companies to $6 million (from $3 million);
• establishing a Canadian patent box which, according to the costing submission made to the Parliamentary Budget Officer, would carry a tax rate that is half of the current federal corporate income tax rate on income derived from certain types of intellectual property, effective July 1, 2025;
• expanding the flow-through share regime to include certain startups, allowing investors to deduct eligible R&D expenses directly;
• reducing/removing interprovincial trade barriers and achieving mutual recognition of credentials; and
• introducing a 20% Artificial Intelligence (AI) deployment tax credit for small and medium-sized businesses in respect of qualifying AI adoption projects, if the taxpayer can demonstrate that the AI expenditure increases jobs.

CRA items included:

• introducing automatic tax filing, starting with low-income households and seniors;
• leveraging technology to better identify and prosecute instances of tax evasion, fix loopholes, and strengthen enforcement; and
• collecting an additional $3.75 billion from increasing penalties and fines over a three-year period.

Capital gains/losses items included:

• cancelling the proposed increase to the capital gains inclusion rate, thereby retaining the 50% inclusion rate.

Corporate tax items included:

• conducting a review of the corporate tax system based on the principles of fairness, transparency, simplicity, sustainability, and competitiveness.

Employment items included:

• expanding the labour mobility tax deduction to cover tradespeople who travel more than 120 km from their home to a job site (currently 150 km), as well as significantly increasing the per-year tax deduction limit (no amounts were provided);
• supporting workers affected by US tariffs by implementing various EI measures; and
• enhancing the EI system to better reflect the modern workforce with flexible support.

Estate planning items included:

• reducing the minimum amount that must be withdrawn from a Registered Retirement Income Fund (RRIF) by 25% for one year; and
• increasing the guaranteed income supplement (GIS) by 5%.

GST/HST items included:

• reducing GST costs for first-time homebuyers by eliminating the GST on homes up to $1 million and reducing it on homes between $1 million and $1.5 million.

Personal items included:

• reducing the marginal tax rate on the lowest tax bracket by 1%; • reviewing and reforming the process to apply for the Disability Tax Credit (DTC);
• introducing an apprenticeship grant of up to $8,000 for registered apprentices (it would convert to an interest-free loan if the program was not completed) in addition to the current $20,000 interest-free loan provided to apprentices; and
• introducing a refundable health care workers hero tax credit for personal support workers valued at up to $1,100 a year.

 

Watch for developments in these areas!