Yesterday, November 4th, 2025, the federal government announced Budget 2025. The budget contains several items that pertain to people with disabilities and people living on low incomes. We’ve listed them below. DABC will issue a statement with our thoughts on the budget in the near future.

Read the full budget here: https://budget.canada.ca/2025/home-accueil-en.html.

Have questions? Email taxaid@dabc.ca or call 236-477-1717  for questions specifically relating to tax measures, and email dtc@dabc.ca  or call 604-923-8136 for all other questions.

Delivering Automatic Federal Benefits for Low-Income Individuals

• Automatic Federal Benefits for the 2026 tax year. These individuals will be able to review and confirm a pre-filled income tax return, and the Canada Revenue Agency (CRA) will automatically file these individuals’ taxes to ensure they receive government benefits they qualify for—including benefits that these Canadians may not be aware they are entitled to.
• To help individuals with lower incomes receive the benefits to which they are entitled, Budget 2025 also proposes to amend the Income Tax Act to allow the CRA to file a tax return on behalf of certain eligible individuals with lower incomes in simple tax situations who do not owe tax and do not file themselves.

Protecting Against Economic Abuse in Financial Institutions

• Budget 2025 proposes to introduce a voluntary Code of Conduct for the Prevention of Economic Abuse for federally regulated banks. This code, to be overseen by the Financial Consumer Agency of Canada, will set clear expectations for how banks can identify, prevent, and respond to economic abuse to better protect Canadians.

Personal Support Workers Tax Credit

• Budget 2025 proposes to introduce a temporary Personal Support Workers Tax Credit, under which eligible personal support workers employed in the remaining provinces and territories could claim a refundable tax credit equal to 5 per cent of their eligible earnings, providing support of up to $1,100 per year.

Lowering Barriers to Access the Canada Disability Benefit

• Budget 2025 proposes funding of $115.7 million over four years, beginning in 2026-27, and $10.1 million per year ongoing, for a one-time supplemental Canada Disability Benefit payment of $150 in respect of each Disability Tax Credit certification, or re-certification, giving rise to a Canada Disability Benefit entitlement. This one-time payment would be retroactive to the launch of the Canada Disability Benefit. Following successful completion of the regulatory process, the first supplemental payments are expected to be made to Canada Disability Benefit recipients before the end of 2026-27.
• In addition, the government is committed to looking at ways to provide such a payment in respect of other Disability Tax Credit certifications as part of its work to review and reform the process to apply for the credit.
• Budget 2025 confirms the government’s intention to bring forward legislation to exempt the Canada Disability Benefit from being treated as income under the Income Tax Act.

Top-Up Tax Credit

The rate applied to most non-refundable tax credits is based on the first marginal personal income tax rate. In very rare cases where an individual’s non-refundable tax credit amounts exceed the first income tax bracket threshold ($57,375 in 2025), the decrease in the value of these credits may exceed their tax savings from the rate reduction.  To ensure that no one in this circumstance has their tax liability increased by the middle-class tax cut, and to help Canadians transition to the lower credit rate, Budget 2025 proposes to introduce a new non-refundable Top-Up Tax Credit. The credit would effectively maintain the current 15-per-cent rate for non-refundable tax credits claimed on amounts in excess of the first income tax bracket threshold.

Qualified Investments for Registered Plans

Budget 2025 proposes the following amendments to simplify, streamline, and harmonize the qualified investment rules for Registered Retirement Savings Plans (RRSPs), Registered Retirement Income Funds (RRIFs), Tax-Free Savings Accounts (TFSAs), Registered Education Savings Plans (RESPs), Registered Disability Savings Plans (RDSPs), First Home Savings Accounts (FHSAs), and Deferred Profit Sharing Plans (DPSPs).

As of January 1, 2027,

• RDSPs would be permitted to acquire shares of specified small business corporations, venture capital corporations, and specified cooperative corporations
• Shares of eligible corporations and interests in small business investment limited partnerships and small business investment trusts would no longer be qualified investments.

Home Accessibility Tax Credit

At present, if the eligibility criteria for both credits are met, taxpayers can claim both HATC and Medical Expense credits in respect of the same expense. Budget 2025 proposes to amend the Income Tax Act such that an expense claimed under the Medical Expense Tax Credit cannot also be claimed under the Home Accessibility Tax Credit. This measure would apply to the 2026 and subsequent taxation years.

Canada Carbon Rebate

With the removal of the federal fuel charge as of April 1, 2025, the government provided a final quarterly CCR payment starting in April 2025 to eligible households. To support the winding down of mechanisms to return fuel charge proceeds, Budget 2025 proposes to amend the Income Tax Act to provide that no CCR payments would be made in respect of tax returns, or adjustment requests, filed after October 30, 2026.

April 16th, 2024

Today, the federal government released Budget 2024. Included in the Budget is new information about the Canada Disability Benefit Act (CDB), which received Royal Assent on June 22nd, 2023, but has yet to come into force.

Budget 2024 reveals the following updates about the CDB:

• The CDB will likely provide a maximum of $2,400 per year to eligible Canadians with disabilities.
• Only people with disabilities, ages 18-64, who live on low incomes and have been found eligible for the Disability Tax Credit (DTC) will be eligible for the CDB.
• Eligible Canadians will likely begin receiving CDB payments as of July 2025.
• The federal government will provide $243 million over six years, beginning in 2024-25, and $41 million per year ongoing, to cover the cost of the medical forms required to apply for the Disability Tax Credit, to expand access to the DTC and therefore the CDB.
• The federal government is calling on provinces and territories to ensure that CDB payments are not clawed back from provincial or territorial income/disability supports.

While DABC is happy to see a timeline for the enactment of the Canada Disability Benefit and the government’s recommendation against clawbacks, we are extremely disappointed to learn about the Disability Tax Credit eligibility requirement and the proposed $2,400/year cap. It can be very difficult for people with disabilities to be approved for the DTC due to its strict eligibility requirements, and $2,400/year is woefully inadequate; it will not lift most people with disabilities who are eligible for the CDB out of poverty.

DABC will continue to provide feedback to the government on the development of the Canada Disability Benefit.

In more positive news for Canadians with disabilities, “Budget 2024 announces the government’s intention to amend the Income Tax Act to make additional expenses eligible for the Disability Supports Deduction, subject to certain conditions, such as:

• service animals trained to perform specific tasks for people with certain severe impairments;
• alternative computer input devices, such as assistive keyboards, braille display, digital pens, and speech recognition devices;
• and, ­ergonomic work chairs and bed positioning devices, including related assessments.”

Read the full Budget plan here: https://budget.canada.ca/2024/report-rapport/budget-2024.pdf.