Bill C-15 Is Now Law: How the Budget 2025 Implementation Act Affects Your Taxes, Pension, and Family

What This Means for You

Bill C-15 — the Budget 2025 Implementation Act — received Royal Assent on March 27, 2026, transforming dozens of budget promises into binding law. This is not a theoretical policy discussion anymore. Starting now, specific programs are open for applications, tax credits are claimable, and filing obligations have changed. Whether you are a federal public servant weighing early retirement, a personal support worker who has been underpaid for years, a parent struggling with school lunch costs, or a property owner who dreaded the underused housing tax paperwork, this legislation directly touches your finances.

Based on our analysis of the full bill and supporting government documentation, here are the measures that matter most to Canadian households — with the dollar amounts, eligibility rules, and deadlines you need to know.

If You Are a Federal Public Servant

The Early Retirement Incentive (ERI) is now open for applications.

This is likely the single most consequential measure in Bill C-15 for the roughly 360,000 federal public servants across Canada. Here is how it works:

How the penalty normally works: If you retire before meeting the standard age-and-service requirements (age 60 with 2+ years of service, or age 55 with 30+ years), your pension is permanently reduced by 5% for each year you retire early. For someone retiring three years early on a $40,000 annual pension, that is a permanent $6,000-per-year reduction — roughly $120,000 over a 20-year retirement.

What the ERI changes: Eligible employees can apply to retire with an immediate, unreduced pension regardless of whether they meet the standard thresholds. The 5%-per-year early retirement penalty is waived entirely.

Example calculation: A 53-year-old federal employee with 25 years of service earning $85,000 per year would normally face a 10% permanent pension reduction (two years short of age 55 with 30 years of service). Under the ERI, that penalty disappears — worth approximately $8,500 per year, or roughly $170,000 over a 20-year retirement.

Critical deadlines and details:

• Applications are open now and close July 24, 2026
• The government intends to conclude the process within 300 days of implementation
• This is voluntary — no one is being forced out
• The program supports the government's Comprehensive Expenditure Review goal of reducing the federal workforce by 10% by the end of fiscal year 2028-29
• According to government estimates, the program will cost $1.5 billion over five years but save approximately $82 million annually in pension contributions

Your immediate action steps:

• Visit the Treasury Board Secretariat website for the official ERI application portal
• Request your personalized pension estimate from the Government of Canada Pension Centre (call 1-800-561-7930)
• Calculate your unreduced pension amount versus your reduced amount to understand the true value of the incentive
• Consult a financial planner who specializes in federal pensions before the July 24 deadline
• If you are considering this, do not wait — the application window is only four months

If You Are a Personal Support Worker

A new refundable tax credit of up to $1,100 per year is now law.

According to the Parliamentary Budget Officer's analysis, the temporary Personal Support Workers Tax Credit applies to the 2026 through 2030 tax years. Here is what you need to know:

How it works: The credit equals 5% of your eligible PSW earnings, up to a maximum of $1,100 per year. If you earn at least $22,000 annually in qualifying PSW income, you receive the full $1,100 credit. Because it is refundable, you receive the money even if you owe no federal tax.

Who qualifies:

• You must provide one-on-one care and essential support focused on maintaining an individual's health and well-being
• Your main duties must include assisting clients or patients with activities of daily living (bathing, dressing, feeding, mobility)
• You must be employed by a qualifying health care establishment
• Administrative, clerical, hospitality, or cleaning-only roles do not qualify

Who does NOT qualify: PSWs employed in British Columbia, Newfoundland and Labrador, and the Northwest Territories are ineligible. These jurisdictions already receive dedicated wage-increase funding through bilateral agreements under the Aging with Dignity program, as reported by CUPE and confirmed by the PBO.

Your action steps:

• No separate application is required — claim the credit on your 2026 federal income tax return
• Keep your T4 slips and employment records documenting your PSW role and earnings
• If you earn less than $22,000 from PSW work, your credit will be proportionally lower (5% of actual qualifying earnings)
• Speak with your employer to confirm your role meets the "hands-on care" eligibility criteria
• If you work in BC, Newfoundland and Labrador, or NWT, check whether your province's bilateral wage-increase funding applies to you instead

If You Have School-Age Children

The National School Food Program is now permanently funded by law.

Bill C-15 establishes long-term, stable funding through the National School Food Program Act. According to the government's announcement, this program will provide meals for up to 400,000 additional Canadian children annually, beyond those already served by existing school food programs.

The funding: $1 billion over five years, scaling to $260 million per year by 2029-30. This includes dedicated investments for First Nations, Inuit, and Métis communities.

What this means for your family:

• If your child's school does not currently have a meal program, this funding makes it far more likely one will be established
• The program is universal in design — it is not income-tested, so any child at a participating school can access meals
• Provinces and territories will administer the funding, so program rollout timelines will vary by region

Your action steps:

• Contact your child's school or school board to ask about their participation in the National School Food Program
• If your school does not yet participate, advocate with your school council or parent advisory committee to apply for funding
• For Indigenous communities, engagement processes are underway to co-develop culturally appropriate food programs

If You Own Property (Including Foreign Owners)

The Underused Housing Tax is dead — effective immediately.

One of the most widely criticized compliance burdens for property owners has been eliminated. According to PwC Canada's analysis of Bill C-15, the Underused Housing Tax (UHT) is repealed for the 2025 calendar year and all subsequent years. This means:

• No UHT return is required for 2025 or any future year
• No UHT tax is payable for 2025 or any future year
• Filing obligations and penalties for the 2022 to 2024 calendar years still apply — you cannot retroactively avoid those

Why this matters: The UHT was widely criticized because it required millions of Canadians — including many who were exempt from the tax itself — to file annual returns. The compliance cost often exceeded any revenue the tax generated. The Canada Revenue Agency estimated that administration and enforcement costs were disproportionate to the roughly $54 million in annual revenue.

Your action steps:

• If you have not yet filed your 2024 UHT return, you still must do so (deadline was April 30, 2025 for most filers)
• For 2025 and beyond, no action is required — the tax and filing obligation no longer exist
• If you previously paid penalties related to UHT filings, those are not retroactively refunded

If You Run a Small or Medium Business

SR&ED tax credits just got significantly more generous.

The Scientific Research and Experimental Development program — Canada's largest single source of federal support for business R&D — has been substantially enhanced. According to EY Canada's analysis of Bill C-15:

• The enhanced 35% SR&ED credit expenditure limit doubles from $3 million to $6 million
• Phase-out thresholds have been revised: the enhanced credit begins reducing when taxable capital exceeds $15 million (up from previous thresholds) and fully phases out at $75 million
• Eligible Canadian public corporations can now access the enhanced credit rate
• Qualifying current SR&ED expenditures receive a 100% refundable credit
• Qualifying capital SR&ED expenditures receive a 40% refundable credit
• Processing times for claims are being cut in half

Example scenario: A Canadian-controlled private corporation spending $4 million on qualifying R&D previously could only claim the enhanced 35% rate on the first $3 million (receiving $1,050,000) and the standard 15% rate on the remaining $1 million ($150,000), for a total of $1,200,000. Under the new rules, the full $4 million qualifies at the 35% rate, for a total credit of $1,400,000 — a $200,000 improvement.

Your action steps:

• Review your current and planned R&D spending with your accountant to see if the new thresholds affect your credit calculations
• If you previously avoided SR&ED claims because of processing delays, the halved processing time may make claims more practical
• Public corporations should review eligibility under the expanded access rules with their tax advisors

The News: What Happened

Bill C-15, the Budget Implementation Act, 2025, No. 1, received Royal Assent on March 27, 2026, according to the Department of Finance Canada. The legislation formally enacts key measures introduced in the November 4, 2025, federal budget titled "Canada Strong," as well as measures from the Fall Economic Statement 2024 and Budget 2024.

As reported by the Canadian Press, the bill had been delayed in the Senate for several months, creating uncertainty around the Early Retirement Incentive program in particular. According to the Hill Times, the delay caused what unions described as "chaos" in the public service, as federal workers could not plan their retirements without knowing whether the ERI provisions would become law.

The Treasury Board Secretariat confirmed on March 27 that applications for the Early Retirement Incentive are now open, according to a government news release. Finance Minister François-Philippe Champagne stated that the legislation "will help the government deliver on its plan to build one united economy, empower Canadians to get ahead, and protect our country and sovereignty."

The bill is an omnibus piece of legislation containing dozens of individual measures. Beyond the items detailed above, it also includes provisions for the Trade Diversification Corridors Fund ($5 billion over seven years), the Arctic Infrastructure Fund ($1 billion), the Build Communities Strong Fund ($51 billion over 10 years), and enhanced accelerated capital cost allowance provisions for businesses.

Analysis: Why This Matters

Based on our analysis, Bill C-15 represents a significant shift in how the federal government is approaching three simultaneous challenges: workforce right-sizing, healthcare worker retention, and housing policy simplification.

The Workforce Reduction Strategy

The 10% public service reduction target is ambitious by historical standards. The Early Retirement Incentive is designed to achieve a portion of that reduction through voluntary departures rather than layoffs — a politically and operationally preferable approach. However, the $1.5 billion cost and $82 million in annual savings suggest the government is prioritizing smooth implementation over short-term fiscal savings. The four-month application window (ending July 24) creates urgency that may lead to higher uptake than the government anticipates.

Healthcare Worker Retention

The PSW tax credit acknowledges a reality that the pandemic made impossible to ignore: personal support workers are systematically underpaid relative to the essential nature of their work. At $1,100 per year, the credit is modest — roughly $4.23 per working day — but it represents the first federal tax measure specifically targeting PSWs and signals that this workforce is a policy priority. The five-year sunset clause (2026-2030) suggests the government views this as a bridge measure while broader healthcare funding negotiations continue.

Housing Policy Simplification

Repealing the Underused Housing Tax is a rare admission that a policy was not working as intended. The tax generated minimal revenue while imposing compliance costs on millions of property owners, many of whom were exempt. This simplification, combined with the Ontario HST rebate on new homes announced this week, suggests governments at both levels are pivoting from punitive housing measures toward incentive-based approaches.

What Happens Next

The Early Retirement Incentive application deadline of July 24, 2026, will be the first major milestone. Provincial rollout of the National School Food Program funding will begin in the coming months, with timelines varying by jurisdiction. The PSW tax credit will first appear on 2026 tax returns filed in early 2027. SR&ED changes apply to expenditures incurred after the date of Royal Assent.

Your Action Plan

Immediate (This Week):

• Federal public servants: visit the Treasury Board ERI application portal and request your pension estimate
• Property owners: confirm you have filed all required UHT returns for 2022-2024
• PSWs: confirm your role meets the eligibility criteria for the new tax credit

Short-term (This Month):

• Business owners: consult your accountant about enhanced SR&ED credit thresholds
• Parents: contact your school board about National School Food Program participation
• Federal workers considering early retirement: book a financial planning consultation before the July 24 deadline

Long-term (This Year):

• PSWs: keep employment records organized for claiming the credit on your 2026 tax return
• Business owners: plan R&D spending to maximize the enhanced credit rates
• All Canadians: monitor provincial rollout of the school food program in your area

Other Perspectives

Government Position:

Finance Minister François-Philippe Champagne described the legislation as delivering on the government's plan to "build one united economy, empower Canadians to get ahead, and protect our country and sovereignty," according to the Department of Finance Canada press release.

Opposition Response:

Conservative critics have questioned whether the Early Retirement Incentive will achieve meaningful workforce reduction or simply accelerate departures that would have happened naturally, according to reporting from the Hill Times. The Conservatives have also raised concerns about the overall $78 billion deficit projected in Budget 2025.

Union Perspective:

The Public Service Alliance of Canada has expressed concern that the ERI, while voluntary, creates pressure on older workers and could result in knowledge loss within federal departments, according to the Hill Times. SEIU Healthcare, representing personal support workers, praised the PSW tax credit as "a win for Canada's PSWs and for the labour movement that stood behind them."

Tax Professional Analysis:

According to PwC Canada's tax insights team, the SR&ED changes represent "the most significant enhancement to Canada's R&D tax incentive program in over a decade." Doane Grant Thornton noted that the underused housing tax repeal will be "welcome news for the many affected taxpayers who found the compliance burden onerous and disproportionate."

Note: Including multiple perspectives does not imply all views are equally valid, but ensures readers can make informed judgments.

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Corrections Policy

We strive for accuracy. If you find an error in this analysis, please email us at [email protected]. We will promptly investigate and correct any factual inaccuracies.

Updates:

• No corrections to date (as of March 28, 2026)

Sources

• Department of Finance Canada, "Legislation passes to implement Budget 2025: Canada Strong," March 2026
• Treasury Board Secretariat, "Applications now open for the Early Retirement Incentive Program," March 27, 2026
• Treasury Board Secretariat, "Proposed Early Retirement Incentive," March 2026
• Parliamentary Budget Officer, "Personal Support Workers Tax Credit," 2026
• PwC Canada, "Tax Insights: Bill C-15 implements SR&ED, capital cost allowance and transfer pricing changes," 2026
• EY Canada, "Canada substantively enacts capital cost allowance and other business income tax measures in Bill C-15," 2026
• Doane Grant Thornton, "Bill C-15 impact on you, your trust, or your business," 2026
• CUPE, "Understanding the new Personal Support Worker (PSW) Federal Tax Credit," 2026
• SEIU Healthcare, "Prime Minister Carney Delivering for Canada's PSWs in Budget 2025 with $1,100 Tax Credit," 2026
• Hill Times, "Early retirement offer to federal public servants causing 'chaos' in public service: union," February 6, 2026
• The Canadian Press, "Feds launch early retirement program for public servants after months of delay," March 27, 2026