Overview

• The lowest personal income tax rate will drop from 15% to 14%, effective July 1, 2025, as part of the Liberal government’s cost-of-living relief plan.
• The measure is expected to provide $27 billion in tax savings over five years, with two-income families saving up to $840 annually by 2026.
• Nearly 22 million Canadians are projected to benefit, particularly those earning under CAD 114,750, with targeted relief for lower-income earners.
• The Canada Revenue Agency will adjust payroll tax tables starting July 1, allowing paycheques to reflect the rate change in real time.
• The tax cut, a key election promise from Prime Minister Mark Carney, requires parliamentary approval in the minority government and has raised concerns about funding for public services.