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May 15, 2025 at 18:07
Today, Terry Sheehan, MP for Sault Ste. Marie—Algoma, welcomed the federal government’s announcement of a new middle-class tax cut — one of the first major actions by Prime Minister Mark Carney’s new government to make life more affordable for Canadians. This will put more money in the pockets of Canadians, and build a more affordable Canada.
The federal government will reduce the lowest marginal personal income tax rate from 15% to 14%, effective July 1, 2025. Once legislated, this measure will provide tax relief for nearly 22 million Canadians, saving two-income families up to $840 next year.
“This middle-class tax cut will provide relief for many people in Sault Ste. Marie—Algoma. It is a real, practical change that will help people in their everyday lives,” said Sheehan. “This is just the beginning. We are focused on building a more affordable Canada where everyone has a fair chance to succeed.”
The tax cut responds directly to calls from Canadians for meaningful action on the rising cost of living. It’s part of a broader plan by the federal government to build an economy that works for everyone.
- Income is reported and tax is calculated on an annual basis. To reflect a one-percentage-point cut in the lowest tax rate coming into effect halfway through the year, the full-year tax rate for 2025 will be 14.5 per cent and the full-year rate for 2026 and future tax years will be 14 per cent. The Canada Revenue Agency will update its source deduction tables for the July to December 2025 period so that pay administrators are able to reduce tax withholdings as of July 1. This means that, effective July 1, individuals with employment income and other income subject to source deductions could have tax withheld at 14 per cent. Otherwise, individuals will realize this tax relief when they file their 2025 tax returns in spring 2026.
- The bulk of tax relief will go to those with incomes in the two lowest tax brackets (i.e., those with taxable income under $114,750 in 2025), including nearly half to those in the first bracket ($57,375 and below in 2025).
The rate applying to most non-refundable tax credits will continue to be the same as the lowest personal income tax rate.
- Sheehan welcomes middle-class tax cut - May 15, 2025
- Terry Sheehan seeks re-election in Sault Ste. Marie and Algoma - March 24, 2025
- Statement from MP Terry Sheehan in Response to American Tariffs - February 11, 2025
