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FinancialPlanning 2026
Expect to see tax changes when filing return Canadians heading into the 2025 tax filing season will see a range of federal tax changes and updated benefits as the Canada Revenue Agency opens its online services on Feb. 23. BY ABIOLA ODUTOLA
One of the most significant fed- eral changes is the reduction in the lowest personal income tax rate. The tax rate on income up to $57,375 has been reduced from 15 per cent to 14.5 per cent for 2025 and is scheduled to drop further to 14 per cent for 2026. The change could represent tax savings of up to $286 for the year, though many Canadians may not notice a major difference at filing time because the reduction was already reflected in payroll deduc- tions starting last summer. While many of the changes are modest, understanding them ahead of time can help filers avoid surprises and ensure they receive the benefits they qualify for, UFile national tax specialist Gerry Vitto- ratos told the Sun. “It should not have a big effect on the tax refund itself because the reduction has already been applied to payroll taxes since July 2025,” Vittoratos said in an email. “Many workers would have seen slightly higher take-home pay in the second half of last year.” The lower tax rate also affects the value of non-refundable tax credits, which are calculated using the same percentage, he said. At the same time, indexed increases to the basic personal amount and tax brackets mean more income is exempt from taxation. Vittoratos said the basic per- sonal amount increased by $424 between 2024 and 2025, resulting in roughly $61 in tax savings for eligible taxpayers. “Canadians whose income sits near tax bracket thresholds may see additional savings because more of their income remains taxed at the lowest rate,” he said. He said another new measure is the Canada Groceries and Essen- tials Benefit, which enhances the existing GST credit. “Eligible individuals will re- ceive a one-time top-up pay- ment equivalent to a 50 per cent increase, expected to be paid by June 2026, followed by a 25 per cent increase in benefit amounts for five years starting in July 2026,” he said. “Eligibility will be tied to GST credit qualification, meaning filing a tax return remains essen-
Feb. 23 marks the first day that Canadians can begin filing their income tax and benefit returns online. A Canada Revenue Agency sign in Ottawa is shown in a 2021 photo. (The Canadian Press files)
tial to receive the benefit.” Vittoratos said businesses will also see changes through the Ac- celerated Investment Incentive, allowing companies that acquire and put depreciable property into use between 2025 and 2029 to claim up to triple the allowable first-year depreciation expense. “The measure is designed to en- courage investment by improving short-term cash flow, though it applies only in the first year an as- set is put into use,” he said. For lower-income Canadians, he said, the federal government is introducing automatic tax fil- ing in certain situations to help ensure eligible individuals receive benefits that typically require fil- ing a return. Under the program, the CRA may prepare a tax return on behalf of eligible individuals whose income information is al- ready available through official
slips and who meet specific in- come and filing criteria. Individu- als will have 90 days to review or modify the information before a return is finalized, and they will be able to opt out of the process. Vittoratos said many taxpayers overlook how closely benefits are tied to filing a return, even when little or no tax is owed. Programs such as the Canada Child Bene- fit, Canada Workers Benefit and Guaranteed Income Supplement are calculated using information from annual tax filings, while oth- ers, including the Canada Disabil- ity Benefit and Canadian Dental Care Plan, require separate appli- cations but still rely on tax infor- mation to determine eligibility, he said. While there are a few brand-new deductions for 2025, Canadians often miss changes introduced in federal budgets or economic
statements that take effect imme- diately or retroactively. “Everybody would be well served to at least look at the high- lights of the budgets and econom- ic statements in order to benefit from changes made right away,” Vittoratos said. With online filing approaching, Vittoratos said Canadians need to prepare for enhanced security measures, including mandatory backup multi-factor authentica- tion for CRA online accounts. “Filers should ensure passwords are secure, particularly when us- ing banking credentials through partner sign-in options, encrypt tax documents where possible and use secure portals rather than email when exchanging sensitive information,” he said.
UFile national tax specialist Gerry Vittoratos says while many of Can- ada Revenue Agency’s tax changes are modest, understanding them ahead of time can help filers avoid surprises and ensure they receive the benefits they qualify for. (Supplied)
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Breakups even harder if you can’t afford to move out Living under the same roof with your for- mer partner after a breakup is a tricky situ- ation. and internet costs, and it’s easier to pay bills in a dual-income household, she said. “It can be quite a shock to them in terms of how expensive things can be after leaving the relationship,” Thom said. BY RITIKA DUBEY
It’s a tough spot some cash-strapped Ca- nadians have found themselves in: not be- ing able to leave the shared apartment be- cause they don’t have enough money for a new place. Experts say they need to weigh factors such as safety and emotional capacity against staying in the shared home while they plan and save up money for an exit. The move has to be thought through in stages, said Chantel Chapman, founder of Trauma of Money, a certification program that teaches professionals a trauma-sensi- tive approach to money. First, it’s important to identify the urgency of moving out, she said. If you’re not safe in the environment, the urgency is high. “If that’s the case, then you don’t real- ly have the privilege of planning. It’s more about survival,” she said. Chapman said in these circumstances, it would be better to stay with a friend or fam- ily member to avoid dealing with an unsafe or difficult environment. If there’s no safety concern, there’s a bit
Thom said you also need to figure out what happens to the current home — who moves out and who stays, who will embark on an exhausting hunt for a new home and shoulder the overall cost of moving. “There’s just a lot of decision fatigue that can happen during that time,” she said. After the breakup but while you’re still in the same space, Thom said it’s important to set boundaries and emotionally detach yourself, such as limiting interactions in shared spaces and having minimal conver- sations about daily life or future plans. That might mean not having meals to- gether, cooking together or going shopping together, for example. Chapman said people who’ve lived to- gether for a long time need to check their legal rights and responsibilities. She said if a couple has a cohabitation agreement, it would help look at the assets or liabilities they each brought into the re- lationship. Chapman said prioritizing needs is im- portant in this situation and whether you choose to stay or leave right away, there are pros and cons. Prioritizing finances may mean facing awkward situations in the shared home for a few weeks or months, while focusing on mental health by moving quickly risks rush- ing into a decision — or a new place — that may not be good for you. Thom said prolonging your stay after the breakup can also raise the risk of being pulled back into the relationship. The af- fordability panic, combined with the fresh hurt of a relationship breakdown, can make it really easy to romanticize the relationship even when it has run its course, she said. “They’re afraid of what the future is going to look like without their life partner, and also financially,” Thom said. “People need to just recognize that, yeah, it might be tough for a little while, but things will get better.”
A couple walks among the fall leaves in downtown Vancouver, B.C., in a 2022 photo. (The Canadi- an Press files)
more room to think through the change. While it looks different for everyone, Chapman said to start with mapping what moving out would look like and how much
it would cost. Then plan realistically how quickly you’d be able to acquire the funds to do so. Take that timeline and compare it with your emotional capacity, she said. “There’s a lot of back and forth between the dollars and the budget required, and then your emotional capacity, your emo- tional budget,” Chapman said. Heather Thom often hears concerns from her clients about whether they’d be able to move out, find a place that’s still close to work or family and land on their feet again. “There are so many things that they would have to figure out,” said Thom, a registered professional counsellor and life coach. “But it’s also they’re starting over and it could be very scary.” Thom said it’s important to set a deadline for moving out so you can mentally prepare. She suggested allowing yourself two to three months to get your finances in order. “A lot of people who are living togeth- er have shared expenses and they might not necessarily think about that right away when they break up,” Thom said. Many couples share rent, groceries, utility
... Slow Yourfutureisn’tasprint Financialwellbeingisaboutsteadyprogress.Whetherit’salittle oralot,everycontributiontoan RRSP makesadifference.
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