Budget 2025 Gives Small Businesses Room to Grow — But Uncertainty Still Lingers
For Calgary’s small business owners, Budget 2025 isn’t about new taxes — it’s about new chances to invest, hire, and grow. Ottawa is sending a clear signal: build your business, and we’ll back you with incentives to compete.
A Big Win on Equipment and Growth
The headline item is the new Productivity Super-Deduction, allowing businesses to immediately expense up to 100% of new capital investments — machinery, tools, and equipment — made before 2030. For small and mid-sized firms, this means better cash flow and less tax friction when it’s time to scale up. It also makes Canada one of the most investment-friendly countries in the G7.
Tax Stability and Predictability
The federal corporate tax rate stays put — 9% on the first $500,000 of active income — with no new business taxes or fees added. In a global economy full of uncertainty, that kind of stability matters for planning and confidence.
Reward for Building Long-Term Value
The Lifetime Capital Gains Exemption (LCGE) rises to $1.25 million for qualifying small business shares. In plain terms: when an owner sells their company, more of that sale can be taken home tax-free. It’s a meaningful reward for entrepreneurs who’ve spent years building their business from the ground up.
“Buy Canadian” Policy Favors Local Firms
Ottawa is rolling out a Buy Canadian procurement rule — federal departments will now need ministerial approval before awarding contracts to foreign firms when a Canadian option exists. That’s welcome news for local suppliers and Calgary-based businesses looking to win federal contracts and keep jobs in Canada.
Entrepreneurs’ Incentive Scrapped
The government quietly shelved the Canada Entrepreneurs’ Incentive, which was supposed to lower taxes on up to $2 million in capital gains when selling a business. For founders planning their exit, that’s a notable loss — and a reminder that not every promise makes it into the final budget.
Debt Pressure and Rising Borrowing Costs
The federal deficit, projected at $78 billion, casts a long shadow. Higher government borrowing could mean persistently high interest rates — making it harder and more expensive for small businesses to finance growth or refinance loans. Some worry that future tax hikes could eventually claw back today’s benefits.
Not Every Business Feels the Boost
While manufacturers and service firms stand to gain from new deductions and procurement rules, smaller retailers, restaurants, and trades may see fewer direct benefits. Their relief will depend largely on whether consumer spending rises as a result of the broader budget.
Bottom line: Budget 2025 hands Calgary entrepreneurs real tools to expand and modernize — but long-term success depends on whether Canada’s broader economy can stay steady enough to let those investments pay off.
