What do I need to know about the new Federal Budget?

Here’s the answer to this week’s reader question.

“What’s the TLDR on the Federal Budget? What do I need to know?”

—Dave

What should you know about Canada’s Federal Budget 2025

Each year, the Federal Government releases a budget, which acts like a blueprint for the government’s economic plans. For 2025, Canada’s meaty new budget focuses on big, bold ambitious projects intended to improve the country’s economic trajectory in the face of American tariffs, but there are still a few tasty nuggets for everyday Canadians to snack on. 

Prime Minister Mark Carney’s first budget, which was announced on November 4, has been labelled a “Trump survival plan,” designed to bolster the economy in the face of ongoing tariff tensions.

It sets out a long-term vision by the Federal Government to make Canada a clean energy superpower, tighten the immigration system, increase defence spending, and build housing and infrastructure, increasing the deficit and reducing public service spending to afford it all. All of those things will eventually impact everyday Canadians (especially in the face of a challenging job market) but that’s not all.

In the short term, everyday Canadians can expect some modest tax breaks, lower bank fees, and maybe a Canadian representative in the Eurovision Song Contest. 

Here are some highlights from budget 2025. 

Keeping the Trudeau legacy alive 

Though Canada’s last Prime Minister was pushed out of office by an angry chorus of critics, he did introduce some popular changes that his replacement plans to keep. 

Prime Minister Carney will continue to fund his predecessor’s signature social programs, including:

• $10-a-day childcare and early learning 
• Free dental care for uninsured Canadian households earning less than $90,000
• National Pharmacare, which helps lower medication costs 
• The Canada Child Benefit, which sends cash to parents of kids under 18  
• The Canada Disability Benefit, which gives money directly to those with disabilities 
• The National School Food Program, which provides free lunches to kids 

Addressing bank fees 

Canada’s big banks collect billions in “excess” bank fees, making it harder for Canadians to access their own money, and the government is looking to change that. 

Though the budget doesn’t make any concrete plans the Government promises to “review” things like e-Transfer Fees and ATM fees, with updates promised in 2026.  

When Canadians cash a cheque, for example, their banks typically withhold anything over $100. Budget 2025 aims to increase that to $150, so that Canadians can access more of their cash more quickly. 

The Government is also moving to eliminate exit fees, that charge an average of about $150 to move registered investment accounts—like registered retirement savings plans (RRSPs), tax-free savings accounts (TFSAs), registered education savings plans (RESPs) and others—from one bank to another. 

Tax breaks (we mostly knew about already) 

Spoiler alert: The Prime Minister already spilled the beans on this budget’s biggest tax break for middle class families, which he blurted out back in May. 

That policy cut the lowest personal income tax rate from 15% to 14%, saving an estimated 22 million Canadians about $420 starting in 2026. 

Same goes for eliminating the consumer carbon tax, which Carney already announced back in March, and the Automatic Federal Benefits program announced on October 10th. That program will see the CRA automatically file taxes and distribute benefits to millions of low income Canadians, no paperwork required. 

As for new tax perks, Budget 2025 proposes a Personal Support Tax Credit that would give PSWs a 5% tax credit, worth up to $1,100 per year. The rest only affect those with a private jet, boat or an extra house, following the “axe-ing” of some luxury taxes. 

Canadians taking over European pop? 

While this might not directly affect you, if you’re not a singer or a fan of pop music/international competition, it’s too good not to mention. The wacky, over-the-top European music competition that launched the careers of ABBA, Celine Dion, Olivia Newton-John, Johnny Logan, and countless others may soon have its first official Canadian participant (Celine represented Switzerland in 1988). 

That’s because Budget 2025—a 400-page document otherwise dedicated to serious political and economic policies—includes a plan to “explore participation in Eurovision.” 

The Budget earmarked $150 million in funding increases for CBC/Radio-Canada, and $400 million to fund various Canadian cultural organizations. It also suggests both could be bolstered by a Team Canada in Eurovision, which began accepting non-European entries in 2015. 

A high-speed ride along the St. Lawrence

The Federal Budget is looking to take some big swings on some major projects, like clean energy, defence, and infrastructure, including a high-speed rail line stretching from Toronto to Quebec City. 

Budget 2025 includes $81.8 billion in defence spending over the next five years and $51 billion for housing, roads, water, sewage, healthcare, and other local infrastructure projects. It also seeks to fast track a high-speed rail project that will move passengers from Montreal to Toronto in just three hours at 300 km/h, bringing its construction down from eight years to four. 

The federal budget and your money

Overall, the budget is heavy on investments designed to bolster the economy long-term, light on things that will affect the average Canadians pocketbook in the short-term. That said, some previously announced middle class tax cuts, benefits for parents and those with disabilities, and the ongoing funding of popular Trudeau-era social programs—plus, a promise to lower bank fees—will offer some immediate relief in difficult economic times. 

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