Canada

Canada's individual tax summary reflects all 2025 federal, provincial and territorial budgets. The summary is based on enacted and proposed legislation and assumes that the proposed legislation will become law. Generally, budget proposals and draft legislation are enacted into law, even with a minority federal government, which is currently the case.

Capital gains inclusion rate

The federal government has cancelled draft legislative proposals that would have increased the capital gains inclusion rate from one half to two thirds for the portion of capital gains realised by individuals after 24 June 2024) that exceeds an annual 250,000 Canadian dollars (CAD) threshold. See Capital gains in the Income determination section for more information.

Federal personal income tax (PIT) rate

Draft legislation reduces the lowest marginal PIT rate from 15% to 14.5% for 2025 and to 14% for 2026. See Personal income tax rates in the Taxes on personal income section for more information.

Alternative minimum tax for high-income individuals

For taxation years that begin after 2023, recently enacted legislation increases the alternative minimum tax rate and exemption and broaden its calculation base. See Alternative Minimum Tax (AMT) in the Taxes on personal income section and our Tax Insights ‘Changes to the alternative minimum tax are enacted: How will it affect individuals and trusts starting 2024?' at www.pwc.com/ca/taxinsights for more information.

Voluntary Disclosures Program (VDP)

The CRA has revised its VDP for applications submitted after 30 September 2025. The changes simplify and allow greater access to, and enhance the benefit relief that may be obtained from, the VDP. See Voluntary Disclosures Program in the Tax administration section and our Tax Insights ‘The Canada Revenue Agency revises its Voluntary Disclosures Program effective October 1, 2025' at www.pwc.com/ca/taxinsights for more information.

Reporting requirements for trusts

Draft legislation (i) reduces the number of trusts that would need to file a trust return (and report certain additional information), and (ii) defers the start of the revised bare trust filing requirement until the 2026 taxation year. See Reporting requirements for trusts in the Other issues section and our Tax Insights 'Finance proposes to reduce the scope of the enhanced trust reporting rules' (1 November 2024 update) at www.pwc.com/ca/taxinsights for more information.