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Canada's New Tax Cut Is Officially on — Here's How Much More Your Next Paycheque Should Have

  • Canada’s new government dropped the lowest federal tax rate to 14% on July 1, with the CRA updating payroll tables to implement the change.
  • In May, Canada’s newly-elected government proposed tax cuts aimed at lowering living costs, which were subsequently implemented on July 1 to provide immediate financial relief.
  • Analysis indicates nearly 22 million Canadians benefit, with up to $420 per person and a 14.5% rate in 2025 before dropping to 14%.
  • Employers began withholding less tax, adding roughly $206 per person over 13 pay periods, providing immediate financial relief for Canadians.
  • Beyond immediate relief, the $27 billion savings over five years may encourage provinces to consider their own tax revisions, influenced by Carney's initiative signaling a shift in fiscal policy.
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The Globe & Mail broke the news in Canada on Monday, June 30, 2025.
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