As we approach 2025, Prince George BC’s tax environment keeps changing. In this article, we’ll review the major personal and corporate tax updates that will affect BC businesses and individuals in the upcoming year, along with how tax services can help you prepare.
Personal Tax Adjustments for 2025
British Columbia Tax Decrease
The provincial BPA has risen to $12,932 for 2025, an increase from $12,580 in the previous year.
The BC tax reduction has been updated for 2025:
- Taxes owed will be decreased by up to $562 for individuals earning $25,020 or less annually.
- A partial decrease is available for individuals earning between $25,020 and $40,807 annually.
- The decrease drops by 3.56% for income more than $25,000, with no reduction for those earning $40,800 or more.
RRSP and TFSA Contribution Limits
The RRSP contribution cap for 2025 has increased to $32,490.The TFSA yearly contribution cap for 2025 is $7,000, raising the total cumulative limit to $102,000 for those eligible since 2009.
Immediate Expensing for Capital Investments
Although the capability to instantly expense most capital assets ended in 2023 for corporations, it remains in effect for unincorporated businesses (partnerships and sole proprietorships) for assets bought before 2025. These businesses can claim a 100% first-year deduction on qualifying property purchases. This incentive is designed to encourage investments in updated infrastructure and technology, and may be easier to navigate with the help of professional tax services.
Corporate Tax Updates for 2025
Clean Technology Incentives
Expanded investment tax credits (ITCs) are available for clean energy projects, including electric vehicle supply chains and clean hydrogen initiatives. These credits provide significant tax relief for businesses investing in ecological technologies.
Digital Services Tax
A new digital services tax has been imposed for taxable revenues generated from January 1, 2022. This mainly targets businesses operating within the digital economy.
Tax Changes Impacting Both Individuals and Businesses
Canada Pension Plan (CPP) Contributions
For 2025, the CPP contribution rates and limits have been revised:
- The Year’s Maximum Pensionable Earnings (YMPE) has risen to $71,300 (up from $68,500 in 2024).
- A new additional earnings ceiling, the Year’s Additional Maximum Pensionable Earnings (YAMPE), has been introduced at $81,200 for 2025 (2024 – $73,200).
- The base CPP contribution rate remains at 4.95%, with an extra 1% for the enhanced CPP.
Employment Insurance (EI) Premiums
For 2025, the EI contribution rates and limits have been adjusted:
- The Maximum Insurable Earnings is $65,700 (2024 – $63,200).
- The base EI contribution rate stays at 1.64% (2024 – 1.66%), with the employer’s share being 1.4X the employee’s contribution.
Online Communication with CRA
Starting in spring 2025, the Canada Revenue Agency (CRA) will handle most business communications via its online portal. This change applies to both personal and business tax matters.
Property Tax Adjustments
The homeowner grant threshold for 2025 has been raised to $2.175 million, ensuring that the same proportion of BC homes stay below the threshold compared to 2024.