2025 Tax Updates Every Canadian Should Know About

You're Paying a Lower Tax Rate

The Government of Canada cut the lowest federal marginal rate from 15% to 14% effective July 1st 2025. Because it only applied for half of the year, your 2025 effective rate is 14.5%. From 2026 onwards, the full 14% kicks in.

For most Canadians this means up to $420 back. Couples could see up to $840. This applies automatically — there's no form to fill out, nothing extra to claim.

Because the lowest rate also sets the value of most nonrefundable tax credits, a new "top up tax credit" was introduced alongside the cut to make sure those credits didn't shrink in value.

A New Grocery Benefit Replaced the GST Credit – It Pays More

The Canada Groceries and Essentials Benefit is the newly renamed and expanded version of what was the GST/HST credit. An eligible family of four can receive up to $1,890 this year and roughly $1,400 annually for the four years that follow. A single eligible person can get up to $950 this year.

The important detail – you only get it if you file. The CRA determines your eligibility automatically based on your return. But if you don't file, you're leaving it on the table. The CRA's benefits calculator can give you an estimate based on your income before you file.

Owe Money? You Can Now Set Up a Payment Plan Online – No Phone Call Required

If you end up owing taxes this year and can't pay in full by April 30th, you now have a better option than calling the CRA and waiting on hold. The new "Manage Balance" service inside MyAccount lets you set up a repayment plan entirely online for tax debts of $1K or more. However, interest still accrues from May 1st if you don't pay in full by the deadline.

It's a meaningful improvement over the old process and it removes one of the most frustrating parts of owing money to the CRA.