2025 Federal Budget: What it Means for Businesses, Professionals and Doctors
Last week, the federal government delivered Canada Strong: Budget 2025. Within Budget 2025, Canadians were introduced to important incentives and measures in the wake of economic uncertainty and an era of substantial change. While the top personal and corporate tax rates remained unaffected, the budget explored other avenues that will impact professionals, including doctors, creating new opportunities and compliance risks to navigate.
Here, we’re highlighting three key takeaways from Budget 2025 and what we’d encourage you to pay attention to:
Investment and Business Growth Incentives
- Budget 2025 proposes to introduce temporary 100% immediate expensing (first-year write-off) for eligible buildings used for manufacturing or processing, acquired on or after Budget Day and used before 2030.
- Under the SR&ED Program, the budget proposes to increase the annual expenditure limit to $6 million from the previously announced $4.5 million.
- These measures encourage “invest now” behaviour in sectors such as manufacturing, processing, tech and life-sciences. Therefore, if your corporation belongs to one of these sectors or if you’re thinking about growth capital, there is a tax-planning window.
Top Statutory Rates are Unchanged, but Major Tweaks Elsewhere
- While the 2025 Federal Budget left the personal and corporate income-tax rate tables unchanged, the government had already committed to reducing the lowest federal personal tax rate from 15% to 14.5% (effective July 1, 2025) and to 14% in 2026. This affects how non-refundable tax credits are valued.
-For professionals (e.g doctors operating through a professional corporation) and owners, the lack of rate rise is a relief, but maintaining the right balance of salary versus dividend and understanding investment/write-off incentives becomes even more critical.
Compliance, Trust Planning and Tax Avoidance Signals
-The federal government also proposes to tighten rules around tiered corporate structures (parent company and one or more subsidiaries), mismatched year-ends and deferral via investment income.
-There are also changes to the GST and HST regime which affect certain healthcare services (e.g. clarifying manual osteopathic services which are now taxable). The budget introduces the Productivity Super-Deduction, a collection of measures covering all new capital investment which allows businesses to write off a larger share of the cost of these investments, making it easier for businesses to invest and grow.
Budget 2025 focuses on addressing the economic challenges Canadians are facing. While there are no significant new tax increases, several targeted tax initiatives will affect doctors, professional corporations and service-based business owners. Overlooking them could lead to surprise CRA audits or missed planning opportunities.
At Bluestar CPA, our integrated team of accountants helps physicians and incorporated professionals stay proactive, compliant and tax efficient. Whether you need advice on personal or corporate tax planning or support during an audit, we’re here to help. Contact us to learn more.