The deadline for filing your 2024 income tax return is April 30, 2025. Stay informed about the latest tax changes and benefits available to maximize your savings and ensure compliance. This guide outlines the key updates and important deductions and credits separated into sections for Individuals and Families, and Self-Employed Individuals.
For Individuals and Families
Alternative Minimum Tax (AMT)
-
Increased minimum tax rate and basic exemption threshold.
-
Modified calculation for adjusted taxable income affecting foreign tax credits and minimum tax carryovers.
-
Limited value on most non-refundable tax credits.
Canada Pension Plan (CPP) Enhancement
• The standard CPP contribution rate remains at 5.95% for both employees and employers on earnings up to $68,500 (the Year’s Maximum Pensionable Earnings or YMPE) in 2024.
• Additionally, employees and employers each contribute an extra 4% on earnings between the YMPE ($68,500) and the Year’s Additional Maximum Pensionable Earnings (YAMPE) of $73,200 in 2024.
Home Buyers’ Plan (HBP)
-
Withdrawal limit increased from $35,000 to $60,000 after April 16, 2024, with temporary repayment relief available.
Volunteer Firefighters and Search and Rescue Volunteers
Basic Personal Amount (BPA)
• For 2024, the Basic Personal Amount (BPA) has increased to $15,705 for taxpayers with net income up to $173,205.
• For taxpayers with net incomes above this amount, the BPA is gradually reduced, reaching a minimum of $14,138 at incomes of $235,675 or higher.
Short-term Rentals
Popular Tax Credits and Deductions
Canada Training Credit (CTC) Eligible taxpayers aged 26 to 65 can claim this refundable tax credit to cover a portion of eligible tuition and fees for training or courses to enhance their skills.
Canada Caregiver Credit (CCC) This non-refundable tax credit supports individuals caring for family members or dependents with a physical or mental impairment. The amount varies based on the dependent’s relationship, net income, and circumstances.
Child Care Expenses Child care expenses, such as daycare, nursery schools, day camps, and boarding schools, are deductible if incurred to enable a parent or guardian to work, pursue education, or conduct research.
Disability Tax Credit (DTC) The DTC provides a non-refundable tax credit for individuals with disabilities or their caregivers to reduce the amount of income tax payable. Applicants must have a certified disability lasting at least 12 months.
Moving Expenses Deductible moving expenses include transportation and storage costs, travel expenses, temporary living costs, and incidental expenses incurred when relocating at least 40 kilometers closer to a new work location, educational institution, or business location.
Interest Paid on Student Loans Interest paid on eligible student loans can be claimed as a non-refundable tax credit. The loans must be under federal, provincial, or territorial student loan programs.
Donations and Gifts Donations made to registered charities or other qualified organizations qualify for non-refundable federal and provincial tax credits. Typically, you can claim eligible amounts up to 75% of your net income.
GST/HST Credit The GST/HST credit is a quarterly refundable payment designed to offset the impact of sales tax on low to moderate-income individuals and families. Eligibility is automatically assessed based on your annual tax return.
For Self-Employed Individuals
CPP Contributions
Filing and Payment Deadlines
-
Tax Return Deadline: June 16, 2025 (June 15 is Sunday).
-
Balance due must be paid by April 30, 2025.
Reporting Business Income
Digital Platform Operators
Mineral Exploration Tax Credit
Need Assistance?
If you’re unsure about your eligibility for specific credits or deductions, reach out to your tax consultant or tax advisor for personalized guidance. They can help you optimize your tax return, maximize your savings, and ensure compliance with CRA regulations.
OAS Clawback 2025: What Retirees Need to Know About the Recovery Tax
/in 2025, Blog, Investment, pension plan, Retirees, retirement /by Zdyb Financials Ltd.OAS Clawback 2025
If you’ve worked hard to build your retirement income, the last thing you want is to see your government benefits clawed back. Yet for many Canadians, the Old Age Security (OAS) recovery tax—commonly called the OAS clawback—can quietly reduce this valuable benefit.
Here’s how the recovery tax works in 2025, what happens if you delay OAS to age 70, and the strategies we use to help our clients minimize or avoid the clawback.
What is the OAS Recovery Tax?
OAS is a monthly benefit available to most Canadians aged 65 and older. However, once your income exceeds a certain level, the government recovers part or all of your OAS through the recovery tax.
This is calculated based on Line 23400 of your tax return—net income before adjustments. In 2025, the clawback begins when your income exceeds $93,454. For every dollar above that amount, you must repay 15 cents of your OAS.
If your income reaches approximately $151,668 (age 65–74) or $157,490 (age 75+), you could lose your entire OAS benefit for the year.
How Much is the OAS Benefit in 2025?
From July through September 2025, the maximum monthly OAS payment is:
$734.95 for individuals aged 65–74 (about $8,820 annually)
$808.45 for individuals aged 75+ (reflecting a 10% enhancement introduced in 2022)
These amounts are indexed quarterly to inflation and are subject to clawback if your Line 23400 income exceeds the threshold.
What Happens if You Delay OAS Until 70?
You can choose to delay receiving OAS up to age 70, increasing your monthly benefit by 0.6% for each month deferred—a total boost of up to 36% if you wait the full five years.
While a higher payment may sound appealing, it can also lead to larger OAS repayments if your income—including CPP, investment returns, or pension income—exceeds the recovery threshold. Delaying OAS often makes sense for healthy individuals who expect to live into their late 80s or beyond and have lower taxable income during the deferral period.
How the OAS Recovery Tax Works
Example: Alan is 68 and receives the maximum OAS: $8,820 annually. In 2025, the clawback threshold begins at $93,454. Alan’s line 23400 income is $100,000—that’s $6,546 over the clawback threshold. As a result, he must repay: $6,546 × 15% = $981.90
This leaves Alan with $7,838.10 in OAS benefits for the year. If he earns more, the repayment increases proportionally. Once Alan’s income reaches around $151,668 (if aged 65–74) or $157,490 (if aged 75+), his entire OAS would be clawed back.
The recovery tax calculation is automatic and appears on your Notice of Assessment each spring, adjusting your OAS payments for the following July–June period.
Strategies to Reduce or Avoid the OAS Clawback
The good news? There are practical ways to lower your Line 23400 income without compromising your lifestyle. Here are some of the strategies we use to help our clients keep more of their benefits:
Use a TFSA for Retirement Income
Withdrawals from a Tax-Free Savings Account (TFSA) don’t count toward Line 23400. Drawing income from a TFSA instead of taxable accounts can help preserve your OAS and reduce your tax burden.
Manage RRIF Withdrawals
RRIF withdrawals are fully taxable and included in Line 23400. If you don’t need the full minimum withdrawal, we may recommend delaying full RRSP-to-RRIF conversion or converting just part each year starting at age 65. This can help smooth your income and avoid large spikes.
Delay OAS or Split Withdrawals Over Time
If you’re planning to delay OAS, we’ll help ensure you’re not unintentionally stacking income in the deferral years. Likewise, we can help you spread RRSP-to-RRIF conversions over several years to avoid unnecessary spikes in income.
Pension Income Splitting
If you’re married or in a common-law relationship, you can split up to 50% of eligible pension income with your spouse. This reduces your taxable income and can keep you below the clawback threshold—especially effective when one spouse earns significantly less.
Choose Tax-Efficient Investments
Not all investment income is taxed equally:
Capital gains: 50% taxable; more clawback-friendly
Eligible dividends: grossed up for Line 23400 purposes, potentially triggering more clawback despite the tax credit
Interest income: fully taxable and the least efficient for minimizing clawback
We can help structure your investments to be as clawback-friendly as possible.
Donate Securities Instead of Cash
Donating appreciated publicly traded securities directly to a registered charity eliminates the capital gains tax, reduces net income, and supports a cause—all while lowering recovery tax exposure.
Defer Large Income Events
Selling a property, realizing a large capital gain, or cashing a pension lump sum can push you into full clawback territory. If possible, we can help you plan these events to spread them over several years or delay them to a lower-income year.
Consider Leveraged Investing
Some higher-net-worth clients use leveraged investment strategies—borrowing to invest in tax-efficient, capital-gains-producing assets. Interest may be deductible, and investment income can be structured to reduce Line 23400. This is a high-risk strategy and something we’ll discuss carefully if appropriate.
Talk to Your Financial Advisor
Everyone’s income, retirement timing, and tax situation are unique. That’s why we take the time to understand your goals, project your Line 23400 income, explore different scenarios, and build a personalized strategy designed to minimize the recovery tax while keeping your lifestyle in mind.
The OAS recovery tax can quietly chip away at your retirement income—but it doesn’t have to. With the right guidance and a plan tailored to you, it’s possible to keep more of what you’ve worked so hard to earn.
If you’re already retired or approaching retirement, now is the perfect time to sit down and talk. Together, we’ll review where you stand, explore your options, and build a strategy that keeps more of your income working for you. We’re here to help you make the most of your retirement—let’s get started.
Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or tax advice. Always consult a qualified professional regarding your specific situation. We are not responsible for any actions taken based on this content.
Sources: Old Age Security Payment Amount – Government of Canada: https://www.canada.ca/en/services/benefits/publicpensions/old-age-security.html
Old Age Security Pension Recovery Tax– Government of Canada: https://www.canada.ca/en/services/benefits/publicpensions/old-age-security/recovery-tax.html
Personal Life Insurance Planning
/in Blog, life insurance /by Zdyb Financials Ltd.Personal Life Insurance Planning
When thinking about life insurance, one of the most important steps is figuring out how much coverage you need. Everyone’s situation is unique, but a helpful starting point is understanding your coverage options and thinking about the areas of your life that need protection.
Understanding the Different Types of Life Insurance
There are four main types of life insurance: Term, Term to 100, Universal Life, and Whole Life. Here’s how they compare:
Term Life Insurance
Term life insurance provides coverage for a specific number of years—typically 10, 20, or 30 years. It offers fixed premiums for the length of the term, and if renewed, premiums will increase based on your age. This type of insurance provides a fixed death benefit during the coverage period and does not build any cash value.
Ideal For: Families with children, people with mortgages or temporary debts
Death Benefit – Common Uses: Income replacement, mortgage protection, child education
Term to 100
Term to 100 offers lifetime coverage with level premiums that are payable until age 100. It is a cost-effective way to get permanent insurance, as it does not accumulate cash value. The policy provides a death benefit as long as premiums are paid.
Ideal For: Those wanting lifetime coverage without investment features
Death Benefit – Common Uses: Final expenses, estate taxes, leaving a small legacy
Universal Life Insurance
Universal life insurance is a flexible form of permanent insurance that includes both a death benefit and a tax-advantaged investment component. You can adjust your premium payments and death benefit within certain limits. The policy’s cash value depends on how much you contribute and the performance of the chosen investments. Funds can be used for investment growth, savings, personal use, and retirement planning.
Ideal For: People who want long-term coverage with savings but require flexibility
Death Benefit Uses: Advanced estate planning, long-term wealth transfer
Cash Value Uses: Emergency funding, retirement planning, education funding, large purchases
Whole Life Insurance
Whole life insurance provides permanent coverage with level premiums and a death benefit. It also builds cash value over time, which you can borrow against, withdraw from, or use to help pay premiums. The cash value may be accessed for emergencies, supplementing retirement income, large purchases, or other long-term needs.
Ideal For: People who want long-term coverage with savings
Death Benefit Uses: Estate planning, legacy, long-term protection
Cash Value Uses: Emergency funding, retirement planning, education funding, large purchases
The need for life insurance
Once you understand your options, the next step is identifying the purpose of the insurance in your life. Most needs fall into three main categories:
Dependents
Whether it’s young children, a spouse, or even elderly parents, many families have one or more people who depend on their income. In these cases, life insurance plays an important role in maintaining the household’s financial stability. It can help pay for groceries, monthly bills, childcare, tuition, or even a car replacement down the road. Think of it as a financial bridge that helps your family maintain their standard of living while they adjust to life without your income.
Debts
Do you have a mortgage? A home equity line of credit? Maybe a personal loan or credit cards with balances that carry over month to month? If something unexpected were to happen, life insurance can ensure those debts don’t fall on your family’s shoulders. A properly structured policy can provide enough to pay off major liabilities, giving your family financial breathing room and the security of keeping their home or lifestyle intact.
Final Expenses
End-of-life costs often catch families off guard. Between funeral expenses, legal and accounting fees, final tax returns, and probate costs, the total can easily reach into the tens of thousands. A life insurance policy can provide immediate funds to help cover these costs without dipping into savings or relying on credit. For many retirees or aging parents, this is one of the biggest reasons to have a policy—even a small one.
Bringing It All Together
Choosing the right life insurance depends on your personal and family goals. Whether you’re protecting your home, your loved ones’ lifestyle, or planning for future expenses, there’s a policy that fits your needs.
If you’re not sure where to start, a good first step is reviewing your current debts, thinking through future costs, and considering who depends on you.
We’re here to help you choose the right coverage—get in touch.
Disclaimer
This article is for informational purposes only and does not constitute financial, legal, or tax advice. Always consult a qualified professional regarding your specific situation. We are not responsible for any actions taken based on this content.
2025 British Columbia Tax Rates
/in 2025, Blog, tax /by Zdyb Financials Ltd.Stay updated on British Columbia’s tax rates for 2025! This infographic covers marginal tax rates, federal tax brackets, and personal marginal tax rates for various income levels. Whether you’re calculating capital gains, dividends, or general taxable income, this breakdown helps you plan efficiently.
Tax Tips for Filing Your 2024 Income Tax Return
/in 2025, Blog, financial advice, incorporated professionals, individuals, Investment, pension plan, personal finances, Professionals, tax /by Zdyb Financials Ltd.The deadline for filing your 2024 income tax return is April 30, 2025. Stay informed about the latest tax changes and benefits available to maximize your savings and ensure compliance. This guide outlines the key updates and important deductions and credits separated into sections for Individuals and Families, and Self-Employed Individuals.
For Individuals and Families
Alternative Minimum Tax (AMT)
Increased minimum tax rate and basic exemption threshold.
Modified calculation for adjusted taxable income affecting foreign tax credits and minimum tax carryovers.
Limited value on most non-refundable tax credits.
Canada Pension Plan (CPP) Enhancement
• The standard CPP contribution rate remains at 5.95% for both employees and employers on earnings up to $68,500 (the Year’s Maximum Pensionable Earnings or YMPE) in 2024.
• Additionally, employees and employers each contribute an extra 4% on earnings between the YMPE ($68,500) and the Year’s Additional Maximum Pensionable Earnings (YAMPE) of $73,200 in 2024.
Home Buyers’ Plan (HBP)
Withdrawal limit increased from $35,000 to $60,000 after April 16, 2024, with temporary repayment relief available.
Volunteer Firefighters and Search and Rescue Volunteers
Amounts increased from $3,000 to $6,000 for eligible individuals completing at least 200 hours of combined volunteer service.
Basic Personal Amount (BPA)
• For 2024, the Basic Personal Amount (BPA) has increased to $15,705 for taxpayers with net income up to $173,205.
• For taxpayers with net incomes above this amount, the BPA is gradually reduced, reaching a minimum of $14,138 at incomes of $235,675 or higher.
Short-term Rentals
Expenses related to non-compliant short-term rentals are no longer deductible after January 1, 2024.
Popular Tax Credits and Deductions
Canada Training Credit (CTC) Eligible taxpayers aged 26 to 65 can claim this refundable tax credit to cover a portion of eligible tuition and fees for training or courses to enhance their skills.
Canada Caregiver Credit (CCC) This non-refundable tax credit supports individuals caring for family members or dependents with a physical or mental impairment. The amount varies based on the dependent’s relationship, net income, and circumstances.
Child Care Expenses Child care expenses, such as daycare, nursery schools, day camps, and boarding schools, are deductible if incurred to enable a parent or guardian to work, pursue education, or conduct research.
Disability Tax Credit (DTC) The DTC provides a non-refundable tax credit for individuals with disabilities or their caregivers to reduce the amount of income tax payable. Applicants must have a certified disability lasting at least 12 months.
Moving Expenses Deductible moving expenses include transportation and storage costs, travel expenses, temporary living costs, and incidental expenses incurred when relocating at least 40 kilometers closer to a new work location, educational institution, or business location.
Interest Paid on Student Loans Interest paid on eligible student loans can be claimed as a non-refundable tax credit. The loans must be under federal, provincial, or territorial student loan programs.
Donations and Gifts Donations made to registered charities or other qualified organizations qualify for non-refundable federal and provincial tax credits. Typically, you can claim eligible amounts up to 75% of your net income.
GST/HST Credit The GST/HST credit is a quarterly refundable payment designed to offset the impact of sales tax on low to moderate-income individuals and families. Eligibility is automatically assessed based on your annual tax return.
For Self-Employed Individuals
CPP Contributions
Enhanced CPP contribution rate for self-employed individuals.
Filing and Payment Deadlines
Tax Return Deadline: June 16, 2025 (June 15 is Sunday).
Balance due must be paid by April 30, 2025.
Reporting Business Income
Report income on a calendar-year basis for sole proprietorships and partnerships.
Digital Platform Operators
New reporting rules requiring platform operators to collect and report seller information.
Mineral Exploration Tax Credit
Eligibility extended for flow-through share agreements signed before April 2025.
Need Assistance?
If you’re unsure about your eligibility for specific credits or deductions, reach out to your tax consultant or tax advisor for personalized guidance. They can help you optimize your tax return, maximize your savings, and ensure compliance with CRA regulations.
Sources
Canada Revenue Agency. “What’s New for the 2024 Tax-Filing Season.” Canada.ca, Government of Canada, www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/whats-new.html
Canada Revenue Agency. “Maximum Pensionable Earnings and Contributions for 2024.” Canada.ca, Government of Canada, www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2023/maximum-pensionable-earnings-contributions-2024.html
“7 Biggest Tax Changes Canadians Need to Know in 2025.” TurboTax Canada, Intuit, turbotax.intuit.ca/tips/7-biggest-tax-changes-canadians-need-to-know-in-2025?srsltid=AfmBOoq7eGj8qrkZ6vLpu4Cogfkln4e7PFGD3aYMrdADQ4za4cbHxo5F
“Popular Canadian Tax Benefits, Deductions and Credits in 2023.” TurboTax Canada, Intuit, turbotax.intuit.ca/tips/popular-canadian-tax-benefits-deductions-and-credits-in-2023-14180
“Personal Tax: What’s New for the 2024 Tax Year.” CPA Canada, Chartered Professional Accountants Canada, www.cpacanada.ca/news/Accounting/Tax/personal-tax-2024
Canada Revenue Agency. “Basic Personal Amount.” Canada.ca, Government of Canada, www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/basic-personal-amount.html
Bank of Canada Announces Interest Rate Cut Amid Economic Uncertainty
/in 2025, Blog, Government Budget, Investment, tax /by Zdyb Financials Ltd.On March 12, the Bank of Canada announced another reduction in its benchmark interest rate, bringing it down to 2.75%. This decision comes as the Canadian economy faces ongoing pressures, including uncertainty surrounding U.S. trade policies, slower job growth, and persistent inflation concerns.
These rate adjustments aim to help stabilize the economy during this unpredictable time, providing support to consumers and businesses as policymakers navigate a challenging economic landscape.
Staying Focused Amid Market Fluctuations
During times like these, market uncertainty can feel overwhelming, but history has shown that markets tend to recover over time. While short-term fluctuations can be unsettling, a well-balanced and diversified approach helps manage risk and keeps you positioned for long-term success. The key is to remain patient and avoid making impulsive decisions based on temporary market movements.
We understand that recent market volatility, driven by changing trade policies and shifting interest rates, may cause concern about how your investments and finances could be affected. It’s natural to feel uncertain during periods of economic turbulence. However, it’s important to remember that markets have historically proven resilient, eventually recovering from downturns and periods of uncertainty.
Rather than reacting to day-to-day changes, it’s important to stay focused on the bigger picture. Market cycles come and go, and those who stay committed to a structured investment approach are often better positioned to navigate challenges and take advantage of future opportunities.
We’re Here to Support You
Your financial well-being remains our highest priority. If you have questions or concerns about your investments or if you’d simply like reassurance about your current strategy, please reach out. We’re always here to offer guidance, clarity, and support as you navigate these uncertain times.
Let’s connect—schedule a call with us today.
Source: Bank of Canada. “Bank of Canada Announces Interest Rate Cut Amid Economic Uncertainty.” 12 Mar. 2025.
https://www.bankofcanada.ca/2025/03/fad-press-release-2025-03-12/
2025 Canadian Controlled Private Corporation Tax Rates
/in 2025, Blog, tax /by Zdyb Financials Ltd.Canadian corporate tax rates for 2024–2025 feature distinct categories for small business, active business, and investment income, each with its own tax considerations. Small businesses can benefit from reduced rates on up to $500,000 of active income, helping entrepreneurs reinvest in their companies and foster growth. In contrast, income from passive investments is subject to a higher rate, which is partially refundable when certain dividends are distributed, encouraging businesses to weigh the advantages and drawbacks of retaining earnings in investment accounts.
The first infographic provides a clear overview of Canada’s federal corporate tax rates for Canadian-Controlled Private Corporations (CCPCs). It delineates how small business income, active business income, and investment income are each subject to different federal rates, factoring in abatements, deductions, and refundable components. This visual snapshot helps business owners quickly grasp which portions of their earnings are taxed favorably and which are subject to higher rates.
The second infographic breaks down the combined federal and provincial tax rates applied to different types of income. It shows that small business income is taxed at a notably low rate, offering a favorable environment for qualifying enterprises. In contrast, active business income is subject to a higher combined rate, reflecting its broader income base once the small business threshold is exceeded.
Meanwhile, investment income stands apart with a considerably steeper tax rate—often exceeding 50%. This higher rate underscores the tax system’s intent to differentiate between income generated through active operations and income derived from investments, thereby encouraging businesses to reinvest in core activities rather than rely predominantly on passive earnings.
2025 Canada Money Facts
/in 2025, Blog, tax /by Zdyb Financials Ltd.Staying informed about financial limits and benefits is essential for effective planning. The 2025 Canada Money Facts infographic provides a clear breakdown of key financial limits, including TFSA, RRSP, FHSA, RESP, CPP, and OAS. Here’s what you need to know:
Tax-Free Savings Account (TFSA)
The 2025 TFSA contribution limit is $7,000, bringing the cumulative contribution room to $102,000 for those who have never contributed since its inception. This account remains a flexible, tax-free way to grow your savings.
Registered Retirement Savings Plan (RRSP)
The RRSP contribution limit for 2025 is $32,490, based on 18% of earned income from the previous year, with a required income of $180,500 to maximize contributions. Contributing to an RRSP can provide tax deferral benefits and help with long-term retirement planning.
First Home Savings Account (FHSA)
Introduced to help first-time homebuyers, the FHSA limit remains at $8,000 for 2025, with a cumulative limit of $24,000. Contributions are tax-deductible, and withdrawals for a first home purchase are tax-free.
Registered Education Savings Plan (RESP)
The lifetime RESP contribution limit remains at $50,000 per beneficiary, with a maximum annual CESG grant of $500 and a lifetime CESG maximum of $7,200. This is a great way to plan for a child’s future education.
Canada Pension Plan (CPP) & Old Age Security (OAS)
CPP retirement benefits can reach up to $17,196 annually, while disability benefits max out at $20,079.
OAS pensions for 2025 provide up to $8,732 per year (ages 65-74) or $9,605 per year (age 75+), but high-income earners may face a clawback if net income exceeds $93,454.
This infographic is a quick reference to help Canadians stay on top of their savings and retirement planning. Whether you’re maximizing contributions, planning for retirement, or saving for a child’s education, understanding these limits ensures you’re making the most of available benefits.
Stay ahead in 2025 by planning wisely and optimizing your financial future!
How Tariffs Affect Your Wallet: A Canadian Perspective on the US–Canada Trade War
/in 2025, Blog, Government Budget, tax /by Zdyb Financials Ltd.Explaining the US–Canada Trade War
What Is It All About?
The US–Canada trade war has far-reaching implications for every Canadian, affecting everything from the cost of groceries to the stability of our economy. The US–Canada trade war refers to the series of tariff impositions and trade barriers that the United States and Canada have used as negotiating tools in various disputes. Historically, while the two countries share one of the world’s largest trading relationships, disagreements have erupted over issues such as softwood lumber, dairy, steel, and aluminum [1, 2]. In recent developments, U.S. President Donald Trump ordered a 25% tariff on all Canadian goods—with a 10% tariff on energy—to go into effect on February 4, 2025 [3]. Effective February 3, 2025- this has now been delayed 30 days.
What’s the Timeline so far?
Pre-Announcement and Rumors: In the weeks leading up to February 4, President Trump had repeatedly threatened to impose steep tariffs on Canada, along with China and Mexico. Early reports even suggested that the tariffs might be postponed until March 1 [3].
Confirmation of Tariffs: Shortly after these speculations, the White House clarified that the tariffs were indeed set to take effect on February 4, leaving little room for negotiation or delay [3].
Immediate Economic Reactions: Once announced, the Canadian dollar (loonie) took a significant hit, dropping to approximately US$0.68 per Canadian dollar, signaling market concerns about the economic impact [3].
Canadian Retaliation: In response to the U.S. measures, Prime Minister Justin Trudeau declared that Canada would retaliate with a 25% tariff on American goods. This response includes immediate tariffs on $30 billion worth of U.S. products, with additional measures on another $125 billion scheduled to begin three weeks later to give Canadian companies time to adjust [4].
Enhanced Border Security and Tariff Pause Announcement: In a statement on February 3, 2025 shared via social media, Prime Minister Trudeau commented: “I just had a good call with President Trump. Canada is implementing our $1.3 billion border plan — reinforcing the border with new choppers, technology and personnel, enhanced coordination with our American partners, and increased resources to stop the flow of fentanyl. Nearly 10,000 frontline personnel are and will be working on protecting the border. In addition, Canada is making new commitments to appoint a Fentanyl Czar, we will list cartels as terrorists, ensure 24/7 eyes on the border, launch a Canada-U.S. Joint Strike Force to combat organized crime, fentanyl and money laundering. I have also signed a new intelligence directive on organized crime and fentanyl and we will be backing it with $200 million. Proposed tariffs will be paused for at least 30 days while we work together.”
This announcement not only outlines significant border security enhancements but also temporarily pauses the proposed tariffs, giving both nations time to coordinate their responses [4, 18].
How Tariffs come into play
Tariffs are essentially taxes imposed on imported goods. The current measures reflect a tit-for-tat strategy. The United States has imposed a 25% tariff on Canadian goods and an additional 10% on energy products [3]. In response, Canada announced it will counter with a 25% tariff on American goods [4]. These aggressive measures are meant to protect domestic industries and gain leverage in negotiations. However, they also create uncertainty for businesses, raise production costs, and ultimately result in higher prices for consumers [5].
The Broader Economic Picture
For individuals, the main takeaway is that these trade policies disrupt the balance of supply and demand. Tariffs can:
Increase Costs: Importers and manufacturers face higher costs that are passed on to consumers.
Shift Markets: Businesses may alter where and how they source materials, impacting product availability and quality.
Impact Jobs: Industries may slow down, affecting employment and wage growth.
Fuel Inflation: As production expenses rise, so do retail prices, adding inflationary pressure to the economy [6, 7].
How the Tariffs Affects Canada
Direct Economic Impacts
Tariffs affect key sectors of the Canadian economy in several ways. Recent news indicates that the Canadian dollar has taken an immediate hit, falling further to a level where one Canadian dollar is now worth approximately US$0.68 [3]. This depreciation means that imported goods will become even more expensive for Canadians. Specific sectors affected include:
Manufacturing and Exports: Higher prices make Canadian goods less competitive in the U.S. market.
Agriculture: Farmers risk losing market access if American tariffs restrict Canadian produce and meat.
Consumer Prices: Increased production costs are passed on to consumers, causing everyday items—from electronics and clothing to food—to become more expensive over time. This not only contributes to inflation but also erodes Canadians’ purchasing power [8, 9].
Additionally, industries such as automotive manufacturing may experience significant disruptions since vehicle parts frequently cross the border and could become uneconomical to ship.
Indirect Effects on Personal Finances
The ripple effects of the tariffs can significantly impact daily life:
Higher Living Costs: As companies face increased input costs from tariffs, consumers are likely to see a gradual increase in prices for everyday goods, further contributing to inflation.
Increased Cost of Goods: Basic commodities and consumer products may rise in price, reducing household purchasing power.
Investment Uncertainty: Market volatility is likely as investors react to the uncertain effects of the tariffs on corporate profits and economic growth.
Employment Concerns: Industries severely impacted by tariffs may delay hiring or reduce their workforce, leading to concerns over job security and income levels [10, 11].
Government and Business Responses
To mitigate these challenges, both the Canadian government and businesses are taking proactive steps:
Diversification: Shifting trade relations toward new markets to lessen dependence on the U.S.
Innovation: Investing in technology and automation to reduce reliance on imported goods.
Support for Local Industries: Prime Minister Justin Trudeau has urged Canadians to buy domestic products, and several provinces have taken non-tariff actions—such as pulling U.S. liquor from store shelves—to pressure U.S. consumers and prompt a tariff rollback [4, 12, 13].
The Case for Buying Canadian
Strengthening the Local Economy
Purchasing Canadian-made products supports local businesses and helps keep money circulating within the national economy. When you choose domestic goods, you contribute to:
Job Creation: Local companies are more likely to hire Canadians, which can help reduce unemployment and boost regional growth.
Economic Stability: A strong local economy can shield consumers from international market fluctuations and inflation, offering a more predictable environment for personal finances.
Innovation and Quality: Canadian firms reinvest in research and development to remain competitive, so buying Canadian helps promote ongoing innovation and quality improvements [14, 15].
Practical Tips for Buying Canadian
Read Labels: Look for products that clearly state they are made in Canada; local certifications and branding help you identify them.
Support Local Retailers: Shop at local stores and markets whenever possible, as these businesses are more directly affected by trade disruptions and inflation.
Be an Informed Consumer: Stay updated on the sectors most affected by tariffs and inflation so you can adjust your purchasing decisions and budget accordingly [16].
Balancing Your Budget
Managing your personal finances becomes even more crucial when prices rise:
Budget Adjustments: Expect imported goods to become more expensive due to tariffs and inflation, so plan your monthly budget with a buffer for these increased costs.
Diversify Spending: Strike a balance between purchasing domestic and international products, taking availability and price into account.
Monitor Economic Trends: Keep an eye on economic news, particularly regarding inflation and price changes, to make informed decisions about savings, investments, and major purchases [17].
Final Thoughts
The US–Canada trade war, marked by a complex mix of tariffs, countermeasures, and inflationary pressures, is poised to affect personal finances significantly. As production costs rise due to these measures, companies often pass increased expenses on to consumers, driving up prices and adding to inflation. Recent events—including the dramatic fall of the loonie and swift retaliatory actions by Canada—underscore the real impact of these trade disputes. Despite the challenges posed by the trade war, Canadians have shown remarkable resilience. By supporting local businesses and making informed financial decisions, we can navigate these uncertain times and emerge stronger.
Disclaimer: This article is for informational purposes only and should not be considered personalized financial advice. Always consult a professional advisor for guidance tailored to your individual circumstances.
Works Cited
Government of Canada. Trade and Investment. Retrieved from https://www.international.gc.ca/trade-commerce/index.aspx?lang=eng
USTR. United States Trade Representative. Retrieved from https://ustr.gov/
CNN. “Trump Tariffs on Canada.” CNN, 1 Feb. 2025, https://www.cnn.com/2025/02/01/economy/trump-tariffs-mexico-canada-china-increased-costs/index.html
Reuters. “Canada’s Trudeau Announces Counter-Tariffs.” Reuters, 2 Feb. 2025, https://www.reuters.com/world/americas/canadas-trudeau-announces-counter-tariffs-2025-02-02/
Investopedia. “Tariff.” Retrieved from https://www.investopedia.com/terms/t/tariff.asp
BBC. “What Are Tariffs?” Retrieved from https://www.bbc.com/news/business-23939589
Investopedia. “Inflation.” Retrieved from https://www.investopedia.com/terms/i/inflation.asp
Conference Board of Canada. Retrieved from https://www.conferenceboard.ca/
Statistics Canada. Retrieved from https://www.statcan.gc.ca/
Bank of Canada. Economic Research. Retrieved from https://www.bankofcanada.ca/research/
CBC. Business News. Retrieved from https://www.cbc.ca/news/business
Innovation, Science and Economic Development Canada. Retrieved from https://www.ic.gc.ca/eic/site/icgc.nsf/eng/home
Business News Network. Retrieved from https://www.bnnbloomberg.ca/
Canadian Chamber of Commerce. Retrieved from https://chamber.ca/
Retail Council of Canada. Retrieved from https://www.retailcouncil.org/
Canadian Consumer Handbook. Retrieved from https://www.canada.ca/en/competition-consumer.html
Financial Consumer Agency of Canada. Retrieved from 18https://www.canada.ca/en/financial-consumer-agency.html
X, 2025. Retrieved from https://x.com/JustinTrudeau/status/1886529228193022429
TFSA vs RRSP 2025
/in Blog, Investment, rrsp, Tax Free Savings Account /by Zdyb Financials Ltd.When looking to save money in a tax-efficient manner, Tax-Free Savings Accounts (TFSA) and Registered Retirement Savings Plans (RRSP) can offer significant tax benefits. To assist you in understanding the distinctions, we will compare the following:
The differences in deposits between TFSAs and RRSPs
The differences in withdrawals between TFSAs and RRSPs
TFSA versus RRSP – Difference in deposits
When comparing deposit differences between TFSAs and RRSPs, there are several key considerations:
The amount of contribution room available
The ability to carry forward unused contributions
The tax deductibility of contributions
The tax treatment of growth in the account
How much contribution room do I have?
If you have never contributed to a TFSA since 2009, you can contribute up to $102,000 today. This table outlines the contribution amount you are allowed each year since TFSAs were created, including this year:
Regarding RRSPs, the limit for tax deductions is 18% of your pre-tax earned income from the previous year, with a maximum limit of $32,490. To illustrate, if your pre-tax income in 2024 was $60,000, your deduction limit for 2024 would be $10,800 (18% x $60,000). If your pre-tax income was $200,000, the maximum limit of $32,490 would apply.
How much contribution room can I carry forward?
Suppose you opt not to contribute to your TFSA each year or do not contribute the maximum amount. In that case, you can carry forward your unused contribution room indefinitely, provided you are a Canadian resident, over 18 years of age, and have a valid social insurance number. If you make a withdrawal, the amount withdrawn will be added to your annual contribution room for the next calendar year.
In contrast, for an RRSP, you can carry forward your unused contribution room until age 71. Once you reach 71, you are required to convert your RRSP into an RRIF. Withdrawals from an RRSP do not create additional contribution room.
The tax deductibility of contributions
Your TFSA contributions are not tax-deductible and are made with after-tax dollars.
Your RRSP contributions are tax-deductible and made with pre-tax dollars.
Tax Treatment of Growth
It is essential to contribute to both RRSP and TFSA because of the different tax treatment of the growth within them.
A TFSA is ideal for short-term goals, such as saving for a down payment on a house or a vacation, as its growth is entirely tax-free. When withdrawing from your TFSA, you will not have to pay any income tax on the amount withdrawn. On the other hand, the growth within an RRSP is tax-deferred. This means you will not pay taxes on your RRSP gains until age 71, at which point you convert the RRSP into an RRIF and start withdrawing money.
RRSPs are more suitable for long-term goals such as retirement because, in retirement, you will have a lower income and be in a lower tax bracket, resulting in less tax on your RRIF income.
TFSA versus RRSP – Differences in withdrawals
There are several areas to focus on when comparing differences in withdrawal:
Conversion Requirements
Tax Treatment
Government Benefits
Contribution Room
Conversion Requirements
For a TFSA, there are never any conversion requirements as there is no maximum age for a TFSA.
For an RRSP, you must convert it to a Registered Retirement Income Fund (RRIF) if you turn 71 by December 31st, 2025.
Tax Treatment of Withdrawals
One of the most attractive things about a TFSA is that all your withdrawals are tax-free! Therefore, they are recommended for short-term goals; you don’t have to worry about taxes when you take money out to pay for a house or a dream vacation.
With an RRSP, if you make a withdrawal, it will be taxed as income except in two cases:
The Home Buyers Plan lets you withdraw up to $60,000 tax-free, but you must pay it back within fifteen years.
The Lifelong Learning Plan lets you withdraw up to $20,000 ($10,000 maximum per year) tax-free, but you must pay it back within ten years.
How will my government benefits be impacted?
If you are withdrawing from your TFSA or RRSP, it’s essential to know how that will affect any benefits you receive from the government.
Since TFSA withdrawals are not considered taxable income, they will not impact your eligibility for income-tested government benefits.
RRSP withdrawals are considered taxable income and can affect the following:
Income-tested tax credits such as Canada Child Tax Benefit, the Working Income Tax Benefit, the Goods and Services Tax Credit, and the Age Credit.
Government benefits including Old Age Security, Guaranteed Income Supplement and Employment Insurance.
How will a withdrawal impact my contribution room?
If you withdraw from your TFSA, the amount you withdrew will be added on top of your annual contribution room for the following calendar year. If you withdraw from your RRSP, you do not open any additional contribution room.
The Takeaway
RRSPs and TFSAs can both be great savings vehicles. However, there are significant differences between them which can affect your finances. If you need help navigating these differences, please do not hesitate to contact us. We’re here to help.
2025 Financial Calendar
/in Blog, Family, Financial Planning, personal finances, rrsp, tax, Tax Free Savings Account /by Zdyb Financials Ltd.Welcome to our 2025 financial calendar! This calendar is designed to help you keep track of important financial dates and deadlines, such as tax filing and government benefit distribution. You can bookmark this page for easy reference or add these dates to your personal calendar to ensure you don’t miss any important financial obligations.
If you need help with your taxes, tax packages will be available starting February 2024. Don’t wait until the last minute to get started on your tax return – make an appointment with your accountant to ensure you’re ready to go when tax season arrives.
Important 2024 Dates to Know
On January 1, 2025, the contribution room for your Tax-Free Savings Account (TFSA) opens again. For those that are eligible, the contribution rooms for your Registered Retirement Savings Plan (RRSP), First Home Savings Account (FHSA), Registered Education Savings Plan (RESP), and Registered Disability Savings Plan (RDSP) will also be available.
For your Registered Retirement Savings Plan contributions to be eligible for the 2024 income tax year, you must make them by March 3, 2025.
GST/HST credit payments will be issued on:
January 3
April 4
July 4
October 3
Canada Child Benefit payments will be issued on the following dates:
January 20
February 20
March 20
April 17
May 20
June 20
July 18
August 20
September 19
October 20
November 20
December 12
The government will issue Canada Pension Plan and Old Age Security payments on the following dates:
January 29
February 26
March 27
April 28
May 28
June 26
July 29
August 27
September 25
October 29
November 26
December 22
The Bank of Canada will make interest rate announcements on:
January 29
March 12
April 16
June 4
July 30
September 17
October 29
December 10
April 30, 2025, is the last day to file your personal income taxes, and tax payments are due by this date. This is also the filing deadline for final returns if death occurred between January 1 and October 31, 2024.
May 1 to June 30, 2025, would be the filing deadline for final tax returns if death occurred between November 1 and December 31, 2024. The due date for the final return is six months after the date of death.
The tax deadline for all self-employment returns is June 16, 2025. Payments are due April 30, 2025.
The final Tax-Free Savings Account, First Home Savings Account, Registered Education Savings Plan and Registered Disability Savings Plan contributions deadline is December 31, 2025.
December 31, 2025 is also the deadline for 2025 charitable contributions.
December 31, 2025 is also the deadline for individuals who turned 71 in 2025 to finish contributing to their RRSPs and convert them into RRIFs.
Please reach out if you have any questions.
Sources:
https://www.canada.ca/en/revenue-agency/services/tax/individuals/life-events/doing-taxes-someone-died/prepare-returns/filing-deadlines.html
https://www.canada.ca/en/revenue-agency/services/child-family-benefits/benefit-payment-dates.html
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/important-dates-rrsp-rrif-rdsp.html
https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2024/planning-file-your-tax-return-on-paper-here-what-you-need-know.html
https://www.bankofcanada.ca/2024/08/bank-canada-publishes-2025-schedule-policy-interest-rate-announcements-other-major-publications/
https://www.canada.ca/content/dam/cra-arc/camp-promo/smll-bsnss-wk-e.pdf