EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.
Recent Searches
Tax Alert 2025 No. 13, 7 March 2025
“This budget contains investments that will make life more affordable, support safe and healthy communities, protect the environment and build the economic and social infrastructure that our population needs in order to thrive.”
“As in previous years, this budget responds to pressures beyond our borders, like climate change, worker shortages, rising health care costs and global economic uncertainty.”
“This budget reflects careful stewardship of public funds, responsible investment in essential services and infrastructure, and a commitment to long-term financial stability so people and businesses can plan for the future.”
Yukon Finance Minister Sandy Silver
2025–26 budget speech
On 6 March 2025, Yukon Finance Minister Sandy Silver tabled the territory’s fiscal 2025–26 budget. The budget contains no new taxes (other than the previously announced tax on vaping products) and no income tax increases.
The minister anticipates a surplus of $57.6 million for 2024–25 and projects a surplus of $82.0 million for 2025–26 and surpluses for each of the next four years.
Following is a brief summary of the key tax measures.
Business tax measures
Corporate income tax rates
No changes are proposed to corporate income tax rates or the $500,000 small-business limit.
Yukon’s 2025 corporate income tax rates are summarized in Table A.
Table A – 2025 corporate income tax rates1
|
Yukon |
Federal and |
|
|---|---|---|
|
Small-business tax rate2 |
0.00% |
9.00% |
|
General manufacturing and processing tax rate2 |
2.50% |
17.50% |
|
General corporate tax rate2, 3 |
12.00% |
27.00% |
1 The rates represent calendar-year-end rates unless otherwise indicated.
2 The federal corporate income tax rates for manufacturers of qualifying zero-emission technology are reduced to 7.5% for eligible income otherwise subject to the 15% federal general corporate income tax rate or 4.5% for eligible income otherwise subject to the 9% federal small-business corporate income tax rate. These reductions are not reflected in the combined federal and Yukon rates above.
3 An additional tax applies to banks and life insurers at a rate of 1.5% on taxable income (subject to a $100 million exemption to be shared by group members).
Personal tax
Personal income tax rates
The budget does not include any changes to personal income tax rates.
The 2025 Yukon personal income tax rates are summarized in Table B.
Table B – 2025 Yukon personal income tax rates
|
First |
Second |
Third |
Fourth |
Fifth |
|---|---|---|---|---|
|
$0 to $57,375 |
$57,376 |
$114,751 |
$177,883 |
Above $500,000 |
|
6.40% |
9.00% |
10.90% |
12.80% |
15.00% |
For taxable income in excess of $177,882, the 2025 combined federal–Yukon personal income tax rates are outlined in Table C.
Table C – Combined 2025 federal and Yukon personal income tax rates
|
Bracket |
Ordinary income1 |
Eligible dividends |
Non-eligible dividends |
|---|---|---|---|
|
$177,883 to $253,4142 |
42.25% |
20.99% |
37.44% |
|
$253,415 to $500,000 |
45.80% |
25.89% |
41.52% |
|
Above $500,000 |
48.00% |
28.92% |
44.05% |
1 The rate on capital gains is one-half the ordinary income tax rate.
2 The federal and territorial basic personal amounts comprise two elements: the base amount ($14,538 for 2025) and an additional amount ($1,591 for 2025). The additional amount is reduced for individuals with net income in excess of $177,882 and is fully eliminated for individuals with net income in excess of $253,414. Consequently, the additional amount is clawed back on net income in excess of $177,882 until the additional tax credit ($239 federally and $102 in Yukon) is eliminated; this results in additional federal and territorial income tax (e.g., 0.32% and 0.13%, respectively, on ordinary income) on taxable income between $177,883 and $253,414.
Other personal tax measures
The budget confirms the following personal tax measures:
- As previously announced, a new refundable tax credit for fertility treatments and surrogacy services of up to $10,000 annually is introduced, as of 2025.
- The Yukon child benefit will increase by 2% to a maximum of $937 per child per year, as of 1 July 2025.
Other tax measures
Tax on vaping products
As previously announced and as a result of Yukon joining the coordinated vaping product taxation framework, the Canada Revenue Agency began, on 1 January 2025, collecting Yukon tax on vaping products sold in the territory. The levied rates are in addition to, and the same as, the federal rates.
Tobacco tax
In keeping with the existing indexation link with changes to the Consumer Price Index in the Tobacco Tax Act, the tobacco tax rates have increased from 35 cents to 36 cents per cigarette and from 35 cents to 36 cents per gram of tobacco (other than cigarettes and cigars), as of 1 January 2025.
Learn more
For more information, please contact your EY or EY Law advisor.
Download this tax alert
Budget information: For up-to-date information on the federal, provincial and territorial budgets, visit ey.com/ca/Budget.