Personal Support Workers Tax Credit

Budget 2025 proposes a temporary refundable Personal Support Workers (PSWs) Tax Credit for taxation years 2026 to 2030. Eligible PSWs employed by qualifying health care establishments can claim 5 per cent of eligible earnings, up to a non-indexed maximum of $1,100.

PBO estimates this measure will cost $1.37 billion over 2025-26 to 2029-30.

• Estimates are presented on an accrual basis as would appear in the budget and Public Accounts.
• A positive number implies a deterioration in the budgetary balance (lower revenues or higher spending). A negative number implies an improvement in the budgetary balance (higher revenues or lower spending).
• Totals may not add due to rounding.
• PSWs employed in British Columbia, Newfoundland and Labrador, and the Northwest Territories are ineligible due to existing bilateral agreements.

Estimates of the number of personal support workers and their employment income were derived from Labour Force Survey tabulations disaggregated by National Occupational Classifications (NOC), regions, and income levels. The number of PSWs was projected using NOC-specific growth rates from the Canadian Occupational Projection System forecast. Projected growth in employment income reflects the wage growth from PBO’s September 2025 Economic and Fiscal Outlook.

The main sources of uncertainty relate to the data and projection assumptions. Estimates of the number of PSWs are subject to uncertainty as available data prevent precise identification of eligible workers. In addition, employment income estimates are derived from self-reported surveys, which exclude information on secondary positions.

Behavioural responses, such as an increase in the number of PSWs following the introduction of the tax credit, were not considered.