Post-election changes to your taxes:

With Mark Carney and the Liberals returning to power, tax policy is set to remain a top priority. Promises are aimed at easing the cost of living for Canadians, especially seniors, healthcare workers, and low—to middle-income families. Here’s what to expect and when.

Key Proposed Tax Changes

1. Lower Personal Income Tax
The Liberals plan to reduce the lowest federal tax rate from 15% to 14%. This minor cut could still benefit over 22 million Canadians, potentially saving families about $825 annually.

2. RRIF Withdrawal Reduction for Seniors
To help retirees manage taxes and preserve their savings, a one-year 25% cut to the minimum withdrawal requirements from Registered Retirement Income Funds (RRIFs) is proposed. This would provide flexibility, especially in volatile market conditions.

3. GST Exemption on Home Heating
To address rising utility costs, particularly during the winter, the Liberals propose temporarily removing the 5% GST from home heating bills. This could save households hundreds of dollars, offering immediate relief to those relying on gas, propane, or heating oil.

4. Tax Credit for Health Care Workers
A new refundable tax credit of up to $1,100 per year is planned for Personal Support Workers (PSWs). This “Healthcare Workers Hero Tax Credit” aims to reward frontline workers and address staffing shortages, particularly in long-term and community care.

Implementation Timeline

Most measures would roll out gradually, starting in late 2025 or 2026. The GST removal on heating could be in place by the 2025–2026 winter, while other changes, like the RRIF relief and healthcare tax credit, are expected to take effect in the 2026 tax year—impacting returns filed in early 2027. A proposed boost to the GIS for low-income seniors could begin by mid-2026.