As we step into 2025, residents across Canada are seeing adjustments to federal, provincial, and municipal taxes. From income brackets to property taxes and everyday expenses, here’s a detailed breakdown of how these changes will impact your finances in the coming year.
Federal Tax Changes
- Basic Personal Amount: Increased by $424 to $16,129, providing a higher non-refundable tax credit.
- Income Tax Brackets: Adjustments to reflect inflation:
- 15% bracket: Ceiling raised to $57,375 (previously $55,867).
- 20.5% bracket: Ceiling increased to $114,750 (up from $111,733).
- 26% bracket: Ceiling now $177,882 (from $173,205).
- 29% bracket: Ceiling raised to $253,414 (from $246,752).
- 33% bracket: Now applies to income over $253,414.
- Canada Pension Plan (CPP): Maximum pensionable earnings rise to $71,500 (+$2,800), with contributions increasing by $166.60 to a maximum of $4,034.10.
- Employment Insurance (EI): Tax rate reduced to 1.64%, but higher insurable earnings mean increased contributions by up to $28 for employees and $40 for employers.
- Carbon Tax: Rises to $95/tonne on April 1, adding 3.3 cents per litre to gasoline prices.
Manitoba Tax Changes
Personal and Income Taxes
- Basic Personal Amount: Increased by $189 to $15,969, but phased out for incomes over $200,000 and eliminated entirely at $400,000.
- Income Tax Brackets:
- 10.8% bracket: Ceiling up to $47,564 (from $47,000).
- 12.75% bracket: Ceiling rises to $101,200 (up from $100,000).
- 17.4% bracket: Now applies to incomes above $101,200.
Fuel Tax
- The provincial fuel tax returns at 12.5 cents per litre, impacting motorists across Manitoba.
Credits for Renters
- Renters receive an increased tax credit of $575 (+$50).
Changes to Provincial Property Taxes
- Education Tax Credit:
- Properties with education taxes of $1,500 or less: Fully eliminated through a $1,500 credit.
- Properties with taxes exceeding $1,500: Receive reductions proportional to the credit.
- Higher-value properties (taxes over $3,000) see increased payments, as the 50% credit is replaced by the $1,500 cap.
Property Reassessments (Winnipeg Only)
- Properties with value increases exceeding 9.5% see higher tax bills, while those below the threshold see reduced taxes. The reassessment affects both municipal and provincial property taxes.
Municipal Tax and Fee Changes (Winnipeg)
- Property Taxes: Proposed 5.95% increase, adding $121 for homes valued at $371,000.
- Transit Fares: Adult fares rise by 10 cents to $3.35.
- City Fees: Increased by 5% across most categories.
- Waste Diversion Fee: Up $13 to $93 per household.
- Water and Sewer Rates:
- Water: Up 5 cents per cubic metre to $2.09.
- Sewer: Up 26 cents per cubic metre to $3.47.
- Mobile Home Licences: Monthly fees increase by 70 cents for the first 400 square feet and 15 cents for each additional 100 square feet.
What These Changes Mean for You
In 2025, taxpayers can expect:
- Higher Take-Home Pay: Adjusted income brackets and higher personal amounts will slightly reduce tax burdens for most earners.
- Increased Costs at the Pump: Rising carbon and provincial fuel taxes will impact daily commuters and transport expenses.
- Property Tax Variability: Reassessments and changes to education tax credits will create winners and losers depending on property values.
- Higher Living Costs: Municipal fee hikes and increased utility rates will put additional pressure on household budgets.
With a mix of tax relief and cost increases, Canadians, especially in Manitoba and Winnipeg, should review their budgets to account for these changes. Speak to a tax professional to maximize credits and deductions available in 2025.