Markets Plus First Look at the 2025 Canadian Federal Budget
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Nov 6, 2025 
Doug Porter, Chief Economist at BMO, and Dante Rossi, BMO Wealth Director of Tax Planning, discuss the upcoming 2025 Canadian federal budget. They explore modest growth expectations amid global uncertainty and analyze key tax measures affecting individuals and businesses. Topics include the productivity super deduction, new personal tax credits, and housing initiatives aimed at affordability. Porter addresses implications of rising unemployment and the Canadian dollar's slide, while Rossi highlights missing elements in tax reform.
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Modest Net Spending Increase
- The 2025 budget adds only modest net new spending, about $4–5 billion next year, roughly 0.1% of GDP.
- Doug Porter views it as technocratic, consolidating prior announcements rather than being transformational.
Super Deduction To Boost Investment
- The budget's flagship tax move is a productivity "super deduction" to accelerate cost recovery on capital investments.
- Immediate expensing includes manufacturing buildings and expanded CCA for productivity-enhancing assets.
Act On Enhanced SR&ED Rules
- Firms doing R&D should evaluate increased SR&ED benefits, including expanded eligibility and higher refundable credits.
- Public companies and larger spenders gain from higher limits and restored capital expenditure eligibility.