Are you preparing your budget for this new year? Be aware that registration will cost you more; groceries and electricity too. Interest rates are expected to continue to fall. Duty offers you an overview of the changes that will have an effect on your portfolio in 2025.
Interest rate
Interest rates are expected to continue to fall this year, but less quickly than last year. If we rely on the most recent forecasts from Desjardins economists, the Bank of Canada could announce a reduction in its key rate of 25 basis points at the end of January. This would be a more modest reduction than the previous two, announced in October and December, which were each of 50 basis points.
In addition to this anticipated cut in January, “three other key rate cuts of 25 points [de base] are likely by the end of 2025,” estimates Florence Jean-Jacobs, senior economist at Desjardins. In total, the key rate, which is currently at 3.25%, could therefore decrease to 2.25% by the end of the year.
Despite the drop in interest rates, those who took out a mortgage loan during the pandemic could see an increase in their monthly payments when they renew this year.
Are you concerned and want to calculate the increase? Examine the rates offered by different financial institutions and run simulations with the online calculator from the Financial Consumer Agency of Canada.
Accommodation
Rents. The Administrative Housing Tribunal (TAL) has not yet published its rate scale for calculating the indexation of rents in 2025. The suspense should not be very long, however, because it is usually revealed in mid-January , when inflation data is updated by Statistics Canada.
In 2023, the TAL had recommended an increase in rents of 1.8%, then double last year, or 4%, for unheated housing. According to a recent economic study by Desjardins, “a higher increase” is expected in 2025. In question: the “rent” component of the consumer price index, on which part of the calculation of the TAL is based. This component recorded an annual increase of 9.0% last September.
Real estate. Real estate prices are also expected to continue to rise in 2025, according to estimates from two real estate brokerage associations. According to Proprio Direct, the average price increase should be around 3% in Quebec. Royal LePage, for its part, expects a higher increase, which could reach 7%.
Taxes municipales. Although several municipalities have already announced increases in their property taxes this year, these will be less than in recent years. In Montreal, property owners will have to pay on average 2.2% more. This figure obviously varies from one district to another. The increase will be lowest in the Ville-Marie district, barely 0.2%, and highest for L’Île-Bizard–Sainte-Geneviève (3.4%).
In the nearby suburbs, Laval and Longueuil, property taxes will be increased by 1.9% and 3.2% respectively. In Quebec, the Marchand administration announced an increase of 2.9% in 2025. In Sherbrooke and Gatineau, it will be more like 3.2% and 3.1%.
Food
Cost of grocery basket. According to a study published in December, food prices are expected to increase by 3% to 5%. An average family of four should expect to pay $800 more for food in the next year, for a total of $16,834.
Among the foods expected to see the biggest increase, meat is at the top of the list (particularly beef). Its price could increase by up to 6%. Vegetables will also increase the bill, with researchers anticipating an increase of up to 5% for this food category.
Other products such as cocoa, coffee or orange juice, the cost of which has already exploded in 2024, will be even more expensive in 2025. The cause: climate change, which has an effect on the quality of harvests in producing countries.
Temporary GST leave. Quebecers will, however, be able to count on the TPS holiday until February 15. Ottawa’s measure applies to cheese, charcuterie, fruit and vegetable platters, prepared salads, sandwiches and chips. It also concerns soft drinks, fruit juices, bottled water and certain alcoholic drinks. The GST will also be removed from the sale price of certain bakery products and desserts as well as sweets of all kinds.
automobile expenses
Registration. Motorists in the greater Montreal area will have to pay 2.5 times more for their registration tax in 2025. The latter goes from $59 to $150. In Quebec, motorists will have to pay three times more than before, or $90 rather than $30. Remember that the municipalities have agreed with the Legault government to increase this tax in order to better finance public transport.
Driving license. Against all expectations, Quebecers will, however, obtain — for a fourth year in a row — a payment holiday for the insurance contribution for their driving license. The Legault government made the announcement a few days before the start of the new year. A class 5 driving license, without demerit points, will therefore cost $26.25 instead of $118.41.
Hydroelectricity rates
As of 1is April 2025, Hydro-Québec’s bill will increase by 3% for residential customers, the maximum allowed by the Legault government. According to the Crown corporation’s calculations, this equates to $2.40 more per month for housing, $4.50 for a small house, $6 for a medium-sized house and $7.40 for a big house.
Prices for commercial customers will see a greater increase. It will be 3.9% for SMEs and 3.3% for large industries, which should be partly reflected in consumers’ bills.
Indexation of the tax system
Tax brackets. Every year, Quebec and Ottawa index their tax tables according to inflation. The reason is simple: since salaries increase, tax brackets are adjusted. At the federal level, the Canada Revenue Agency announced an indexation rate of 2.7%. While at the provincial level, the Quebec Ministry of Finance has chosen to set this rate at 2.85%.
Tax credits and deductions. These same indexation rates also lead to an increase in the value of several tax credits and deductions. For example, the maximum amount per child of the family allowance will increase from $2,923 to $3,006, an increase of $83. The basic annual benefit for a social assistance recipient will increase from $9,144 to $9,408, an increase of $264.
Quebec Pension Plan
This year, the maximum contribution to the Quebec Pension Plan is increasing by 8.9%. If you contribute to the maximum, that is to say you have income above $81,200, the total drain on your pay will be a little more than $4,732 this year, compared to $4,348 last year. .
