Canada’s income tax landscape is constantly evolving, with new rules and adjustments emerging each year. As compliance and reporting obligations become more complex, staying informed about the latest changes is essential. To support you, we’ve highlighted some of the key 2025 updates to help you navigate these developments with clarity and confidence.

CRA is Going Paperless for Businesses

Effective May 2025, the CRA has transitioned to online mail as the default method of delivering correspondence for any business number accounts. This applies to all business accounts, including corporations and sole-proprietorship businesses that are registered for GST/HST. If this applies to you, you should have started to receive all CRA correspondence through CRA’s secure online portal (My Business Account) even if you were previously registered for mail delivery. We strongly recommend ensuring you have access to your online My Business Account and your email address in your account is up to date to get notified when new correspondence is uploaded by the CRA. For more information on these changes, please see this post on CRA’s website.

CRA is Requiring a Backup Multi-factor Authentication (MFA) Method

Starting in February 2026, the CRA will require all CRA My Account users to have a backup MFA option on file. This means that in addition to the primary MFA method (such as receiving a code via text), you must also set up a secondary MFA method (such as a passcode grid or a third-party authenticator app). This change is being implemented to increase the security of your CRA My Account, and to avoid situations where users are locked out of their CRA My Account if that primary MFA method becomes unavailable (such as losing your phone or lacking cellular service). For more information on these changes and how to set up a backup MFA method, please see this post on CRA’s website.

Expanded Trust Reporting

Expanded trust reporting became law effective for the 2023 taxation year, but bare trusts were previously exempted from filing trust income tax returns for the 2023 & 2024 taxation years. Based on the Federal Budget released November 4, 2025, and CRA commentary in December 2025, bare trusts income tax return filings will be deferred for another year, such that they will not be required to file for the 2025 tax year. It is expected that this filing requirement will commence in the 2026 tax year.

Included below are some examples of arrangements that could be considered a bare trust:

Even if there was no activity in the trust for the year, if the trust income tax return is not filed by the deadline, a penalty of up to $2,500 or 5% of the trust assets per year can apply. For more information about these trust reporting rules, please see this post on our website.

Elimination of the Underused Housing Tax (UHT)

The UHT took effect on January 1, 2022 and applied to certain owners of vacant or underused residential property in Canada, generally non-resident, non-Canadians. The UHT was imposed on an annual basis at a rate of 1% on the value of the property. The Federal Budget released November 4, 2025, proposes to eliminate the UHT as of the 2025 tax year. As such, no UHT would be payable & no UHT returns would be required for the 2025 & subsequent tax years.

UHT requirements would continue to apply for the 2022 – 2024 tax years, and penalties and/or interest for failing to file UHT returns, if required, would still apply for these tax years.

Alternative Minimum Tax (AMT)

AMT is not a new concept in Canadian income tax system; however, many taxpayers are not aware of AMT as it does not generally impact them. Every year a calculation is performed “behind the scenes” to determine if the AMT is applicable. AMT applies when a taxpayer claims certain tax-preferred deductions or credits such as the lifetime capital gains exemption. The updated AMT rules came into effect for the 2024 tax year, and will continue to affect more Canadians in 2025, particularly for those who have the following situation(s):

Accelerated Capital Cost Allowance (CCA)

The CCA system determines the deductions a business may claim each year in respect of the capital cost of its depreciable property. Depreciable property is divided into CCA classes with each having its own CCA rate, generally aligning with the expected useful life of the assets. The Federal Budget released November 4, 2025, proposes to increase the CCA that may be claimed for many CCA classes for assets acquired on or after January 1, 2025.

Personal Support Workers Tax Credit

The Federal Budget released November 4, 2025 proposes to introduce a Personal Support Works Tax Credit for the 2026 to 2030 taxation years. Eligible personal support workers could claim a refundable tax credit equal to 5% of their eligible earnings, up to a maximum credit of $1,100 per year. To qualify for the tax credit, one must meet the following conditions:

CRA’s Interest Rates on Unpaid Taxes

The CRA’s prescribed interest rate on unpaid or outstanding overdue taxes has continued to slowly decline. The rate had reached a recent high of 10% in 2024 but has now declined to 7% as of January 1, 2026 The interest rate is published every quarter. We always encourage our clients to file on time and pay their income tax instalments and amounts owing on time to avoid what can be significant non-deductible interest and penalties charges.

Increases to the TFSA and RRSP Contribution Limits

Canadian resident taxpayers saw their TFSA contribution limit increased by $7,000 effective January 1, 2025, and an additional $7,000 effective January 1, 2026.

The maximum RRSP annual dollar limit for the 2025 tax year is $32,490, however your RRSP deduction room will ultimately depend on a number of factors and should be reviewed prior to making a contribution.

Canada’s income tax landscape is constantly evolving, with new riles and adjustments emerging each year. As compliance and reporting obligations become more complex, staying informed about the latest changes is essential. To support you, we’ve highlighted some of the key 2025 updates to help you navigate these developments with clarity and confidence.

MyTrust Account and Canada Revenue Agency (CRA) Online Authorization Access

CRA recently launched MyTrust Account, which provides access to a secure online portal for legal and authorized representatives of trusts. Currently not all correspondence is available on MyTrust Account and CRA may still send documentation via mail.

We have prepared a detailed set of instructions on how you can obtain access to this secure online portal for your trust and provide HW Partners access as an authorized representative of your trust. We are requesting that all trust clients provide us with access to CRA. The instructions can be found on our website https://hwpartners.ca/financial-tools-checklists/

Changes to the Alternative Minimum Tax (AMT)

AMT is not a new concept in the Canadian income tax system; however, many taxpayers are not aware of AMT as it does not generally impact them. AMT is a notional calculation of tax payable under an alternative set of rules governing the computation of income and deductions. If tax calculated according to these alternative rules is greater than tax calculated under the normal rules, then a taxpayer must add the difference to their tax payable for the year, increasing taxes owing. Effectively, tax paid for the year is the greater of tax calculated under the normal rules and tax calculated under the AMT rules. The rules for AMT can apply to trusts, particularly those which claim an interest expense deduction. Where AMT applies, trusts could have an income tax balance owing.

Expanded Trust Reporting

Expanded trust reporting became law effective for the 2023 taxation year, but bare trusts were previously exempted from filing trust income tax returns for the 2023 & 2024 taxation years. Based on the Federal Budget released November 4, 2025, and CRA commentary in December 2025, bare trusts’ income tax return filings will be deferred for another year, such that they will not be required to file for the 2025 tax year. It is expected that this filing requirement will commence in the 2026 tax year, subject to potential new exemptions.

Included below are some examples of arrangements that could be considered a bare trust:

  1. A parent who adds an adult child on legal title of a property. In these circumstances, there may be no change in beneficial ownership from the parent to the child if the child is holding the property in favour of the parent and there was no intention to gift. There are certain filing exemptions for personal-use properties.
  2. Shares of private corporations held “in trust” by a parent or other individual. These arrangements are common where minor children are shareholders in private corporations, particularly professional corporations where only individuals are permitted as shareholders.
  3. Bank or investment accounts held “in trust” by a parent or other individual. These accounts may have been created to hold the funds of a minor child. There are certain filing exemptions for accounts under certain thresholds.
  4. Other bare trustee arrangements where the legal title owner of property does not also hold beneficial ownership.

Even if there was no activity in the trust for the year, if the trust income tax return is not filed by the deadline, a penalty of up to $2,500 or 5% of the trust assets per year can apply. For more information about these trust reporting rules, please see this post on our website. New trust filing exemptions are subject to change as they have not yet been passed into law.

Investing in Our People and Our Future

At HW Partners, our people are at the heart of everything we do. We’re proud to share an important milestone for our firm: the appointment of Celine Fu, CPA, CA, and Robin Lawrence, CPA, CA, to the HW Partners partnership.

Celine and Robin both began their careers with us as co‑op students and have grown alongside the firm over the years, most recently serving as Senior Assurance Managers. Their journeys reflect what we value most at HW Partners—continuous learning, collaboration, and a shared commitment to delivering exceptional service to our clients.

As part of our ongoing focus on developing future leaders, we recently reinforced this commitment by sponsoring the Sprott School of Business Employability Passport program, supporting students as they prepare to enter the professional workforce.

Celine Fu, CPA, CA — Partner

Celine is a proud graduate of the University of Ottawa. She joined HW Partners as a co‑op student in 2016 and became a full‑time team member in 2017. In 2019, she earned her CPA, CA designation. Since then, Celine has worked closely with clients across a range of industries, providing thoughtful, detail‑oriented assurance and accounting support.

Beyond her client work, Celine is actively involved in the community and serves as Treasurer on the Roger Neilson Children’s Hospice Board of Directors.

“HW Partners has supported my professional growth at every stage since my co-op days in 2016, and I am grateful to the founders, Dan (Warren) and Ian (Hendry), and the current partnership for serving as exemplary role models. The firm’s collaborative culture taught me to learn with confidence and grow as a compassionate mentor and leader, and its commitment to professional excellence and community involvement enriched my career as a Chartered Accountant and broadened my perspective beyond technical work. I take pride in the meaningful impact we deliver to entrepreneurs and not-for-profit organizations through sound accounting and taxation advice, and I look forward to continuing this meaningful work in my new role as partner.”

— Celine Fu, CPA, CA, Partner

Robin Lawrence, CPA, CA — Partner

Robin joined HW Partners as a co‑op student from the University of Waterloo in 2012 while completing her master’s in accounting. She joined the firm full‑time in 2014 and earned her CPA, CA designation in 2016. Since then, Robin has focused on assurance services and client support, working closely with a diverse range of clients across multiple sectors.

“From my first co-op term in 2012, HW Partners invested in my growth—supporting my master’s, guiding me through the UFE in 2014, and giving me the chance to learn from every partner. I chose HW because it doesn’t just serve Ottawa—it invests in it. The firm’s volunteerism, community involvement, and commitment to local entrepreneurs inspired me then, and continues to drive me now. Seeing female leadership thrive—role models like Nancy (Nicks) and Marie (Fraser) and more women joining the partnership table – affirmed that strong women shape our firm and our profession. On our assurance team, I work with entrepreneurs at every stage, turning accounting and tax into clear, practical insight so they can make confident decisions. I’m excited to step into the partnership today and help build a firm that leads with purpose and strengthens the Ottawa community.”

— Robin Lawrence, CPA, CA, Partner

A People‑First Approach

Today, HW Partners is home to 11 partners, six of whom are female—a meaningful milestone that reflects our long‑standing commitment to supporting women in leadership and fostering an inclusive workplace where talent and dedication are recognized.

We’re proud of the collaborative, supportive culture we’ve built—one that values mentorship, inclusion, and continuous growth.

“We believe that investing in our people—both professionally and personally—is key to our success. Our approachable leadership, strong mentorship culture, and commitment to work life integration create an environment where employees feel supported, challenged, and empowered to thrive. Whether someone is starting their career or advancing into leadership, we’re dedicated to helping each team member achieve their goals while contributing meaningfully to our clients and community.”

— Krista MacDonald, CHRL, PCP, Director of People & Talent

Evolving With Intention

After more than two decades serving the Ottawa region as Hendry Warren LLP, we rebranded this past summer to HW Partners. This evolution reflects who we are today—a firm deeply committed to relationship‑driven service and forward‑thinking advice, delivered with the warmth, clarity, and professionalism our clients expect.

“As the eldest partner at the firm, I have seen many of our partners come up through the university co-op programs. Robin and Celine have added so much value to the Firm working with our staff on training and providing mentorship. They have developed into business professionals that I am proud to work with every day. We are thrilled that our mentorship program has resulted in many of our co-op students staying with the Firm long term to become leaders and mentors for future staff members. HW Partners is a dynamic and welcoming work environment where professionals can stay and grow.”

— Nancy Nicks, CPA, CA, Partner

Please join us in congratulating Celine and Robin as they step into this next chapter. We’re incredibly proud of what they’ve accomplished and excited for the leadership, mentorship, and insight they’ll continue to bring to our clients, our team, and our community.

HW Partners is proud to announce its sponsorship of the Sprott School of Business Employability Passport program. This partnership underscores the firm’s dedication to fostering the next generation of business leaders and strengthening the local Ottawa community.

The Sprott School of Business’s Employability Passport program is a key component of its undergraduate curriculum. It is designed to equip students with the essential professional skills and experiences needed to succeed in today’s competitive job market, from securing employment to meeting employer expectations and advancing in their careers.

“We are delighted to welcome HW Partners as a sponsor to our Employability Passport program. At Sprott, we equip our students with the tools and strategies to navigate a complex and everchanging business landscape. Through our delivery of innovative and flexible educational experiences, we encourage entrepreneurial mindsets. HW Partners exemplifies this philosophy by investing in our next generation of business leaders. Their support strengthens our shared commitment to shaping graduates who understand that success is measured through shared prosperity.”

– Howard Nemiroff, Dean, Sprott School of Business

This sponsorship is a natural extension of our firm’s deep connection to the Sprott School of Business. Many of HW Partners’ team members, partners, and leaders are proud Sprott alumni, and the firm has a long-standing relationship with the university through its co-op program. The initiative directly aligns with HW Partner’s core values of building lasting relationships and investing in the Ottawa community’s future.

The partnership reflects a shared philosophy that business education extends beyond the classroom and is greatly enhanced by the involvement of the local business community. By supporting the Employability Passport program, HW Partners is not only investing in the academic and professional development of students but also contributing to the economic vitality and future success of the Ottawa region.

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HW Partners is Currently Recruiting University Co-Op Students

As a co-op student at HW Partners, you’ll gain hands-on experience in both accounting and tax, building the practical skills you need to launch a successful career. If you’re curious, capable, and ready to learn, we’d love to have you on our team. Please submit your cover letter, resume, and unofficial transcript in one application package via email.

Featured Article: Here are the 20 organizations named Best Places to Work in 2025

We are thrilled to share that HW Partners has been recognized as one of Ottawa’s Best Places to Work 2025 by the Ottawa Business Journal and the Ottawa Board of Trade.

This award is especially meaningful to us because it comes directly from the feedback of our team. Our people are the heart of HW Partners. Their expertise, dedication, and passion not only drive success for our clients, but also make our firm one of the top employers in Ottawa.

At HW Partners, we take pride in being more than just an accounting firm in Ottawa—we are a place where collaboration, professional growth, and employee well-being are valued every day. Creating an environment where our team can thrive has always been, and will continue to be, one of our highest priorities.

We are grateful to the Workforce Research Group, OBJ, and the Ottawa Board of Trade for this recognition. As we move forward, we remain committed to building on this achievement and continuing to make HW Partners one of the best places to work and grow a career in Ottawa.

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