Well, that was a night! After a nail-biter of an election, Mark Carney and the Liberals have secured a minority government. It was close, it was divisive, and depending on who you ask — it’s either a new chapter or more of the same.

Now that the speeches are over and the signs are coming down, the real question is: what does this actually mean for your money?

While there’s still a lot that could shift in a minority Parliament, Carney’s platform includes a range of tax and policy proposals that could affect investors, retirees, and everyday Canadians alike. 

Let’s walk through what’s on the table — and what you might want to start thinking about for your own financial game plan.

Reduction to the Lowest Federal Income Tax Rate

One of Carney’s headline promises is to lower the federal income tax rate on the first bracket of taxable income — from 15% to 14%. 

For people that earn under roughly $53,000 annually, that’s a savings of up to $300 a year — or around $600 for two-income households.

It’s a positive move… in theory.

But the reality is that most people won’t notice a major difference. A few hundred dollars a year is helpful, but not transformative. 

Still, if you’re entering a year with reduced income — whether because you’re retiring, switching careers, or taking parental leave — even small changes like this are worth factoring into your cash flow projections!

Capital Gains Inclusion Rate to Remain at 50%

After a year of uncertainty and concern among investors, Carney’s government has officially reversed the Trudeau-era proposal to increase the capital gains inclusion rate to two-thirds for larger gains. The existing 50% inclusion rate will remain unchanged.

This is good news for investors who are concerned about paying more tax on their investment profits, as the government has decided to maintain the existing tax rules for capital gains. 

Decisions like this have a real impact on your bottom line — they determine how much of your investment gains you actually get to keep after taxes, which can influence how you plan and prioritize your financial goals.

This decision restored some stability after months where many business owners, real estate investors, and stockholders were debating whether to rush sales ahead of a potential tax hike. 

For example, an investor realizing a $300,000 capital gain still includes $150,000 as taxable income — not $200,000.

So, while those potential tax changes on investments aren’t happening right now, this whole situation really highlights why it’s smart to think ahead about taxes. 

If you have significant assets like a rental property, a business you plan to sell down the road, or a sizable investment portfolio, it’s a good idea to have a long-term exit strategy in place. That way, you’re not just reacting to the latest news when it comes time to make a move.

Proposed Reduction in RRIF Minimum Withdrawals

For folks in retirement, the government’s suggesting a temporary break on how much you have to take out of your Registered Retirement Income Fund (RRIF) in 2025 – it could go down by 25%.

Here’s a quick example: If you’re 75 and have $500,000 in your RRIF, usually you’d need to pull out around $36,900. But with this idea, you could take out about $27,700 instead.

Why does this matter? Basically, it gives you more control over your money. Taking out less could mean less taxable income, which might even drop you into a lower tax bracket and potentially protect things like your Old Age Security benefits. If you’re in a 30% tax bracket, taking out less could save you around $2,760 in income tax for the year.

Now, the catch is, if you actually need those RRIF withdrawals to cover your living costs, then you might not be able to take out less anyway – so this change wouldn’t really make a difference for you. It really boils down to whether you need the full minimum amount to pay your bills or not.

Temporary Increase to the Guaranteed Income Supplement (GIS)

The Liberals also propose a one-year 5% boost to the Guaranteed Income Supplement (GIS), adding about $652 to maximum annual benefits. The GIS is designed for low-income seniors — generally those earning under about $21,624 a year (excluding their OAS).

For seniors already receiving GIS, this will offer a bit of extra breathing room against rising living costs. 

And if your income fluctuates near that eligibility threshold, this increase makes smart tax planning even more important. 

Structuring your RRSP/RRIF withdrawals or realizing investment income carefully could mean the difference between qualifying for GIS and losing it — and with the increase, that’s more money on the line.

Proposed Expansion of the Disability Tax Credit (DTC)

Another important proposal is to broaden eligibility for the Disability Tax Credit (DTC). We don’t have all the details yet, but the goal is to make it easier for people to qualify—especially those with mental health challenges, learning disabilities, or conditions that come and go.  Why is this significant?

Beyond the immediate tax savings (up to $1,400 a year federally), qualifying for the DTC opens the door to setting up a Registered Disability Savings Plan (RDSP). The RDSP is one of Canada’s most generous savings vehicles, offering up to $90,000 in matching grants and bonds from the government over time.

If you, your child, or someone in your family has been turned down for the DTC before – or you weren’t sure if you’d qualify – it might soon be a good time to look into it again. Getting the ball rolling early could really help you get the most out of those government grants and savings down the line.

Proposed Annual Wealth Tax on High-Net-Worth Households

Here’s a familiar idea that’s getting fresh attention from Carney’s team: a yearly tax on the total net worth of very wealthy households—those with more than $10 million in assets. Instead of taxing just what you earn (like income tax), this would tax what you own, including things like homes, businesses, and investments.

The proposed rates are:

• 1% per year on net worth between $10 million and $50 million
• 2% per year on net worth between $50 million and $100 million
• 3% per year on net worth over $100 million

For example, if your total assets add up to $20 million, you’d be looking at around $100,000 in wealth tax each year. This probably won’t affect most Canadians, but if you’re in that high-net-worth group, it brings up some big questions about how your assets are set up, how easily you can access cash, and if you should think about gifting some assets. 

As of now, Prime Minister Mark Carney has not provided detailed specifications regarding which assets would be included in his proposed wealth tax. However, based on typical structures of wealth taxes, it’s reasonable to anticipate that the tax would apply to a broad range of assets, such as real estate holdings (excluding primary residences), business interests, investment portfolios, and other forms of significant wealthIf your net worth is approaching or exceeds the $10 million threshold, now is an opportune time to conduct a thorough review of your assets. 

Complex holdings—such as business interests, real estate, and investment portfolios—can make it difficult to gauge your exposure at a glance. 

Taking the time to carefully assess your position can give you a clearer understanding of where you stand and help you start planning with greater confidence for the potential impact of a wealth tax, helping to preserve your legacy and ensure your succession plans remain intact.

Final Thoughts

Election nights are big moments, but the policies that follow are where the real changes happen. 

Carney’s proposals suggest modest shifts: small tax cuts at the low end, steady treatment of investment gains, added flexibility for retirees, and expanded support for vulnerable groups.

The big takeaway here? Looking ahead is going to be key – whether it’s figuring out your income in retirement, planning when and how to sell investments, or seeing if you qualify for important things like the Disability Tax Credit or Guaranteed Income Supplement.

That said, it’s important to remember these ideas are part of a party platform—not law yet. Any new legislation would still have to pass through the House of Commons, which could be a challenging process for a minority government.

No need to panic about any of this right now (or ever, really), but it definitely makes sense to have a chat with your financial advisor. Just to make sure your long-term plan still makes sense with what might be coming down the road!