Ottawa, ON – October 28, 2025 - Prime Minister Mark Carney announced today a new $1,100 annual tax credit for Personal Support Workers (PSWs) as part of the federal Budget 2025, a move hailed by labour leaders as long overdue recognition for frontline healthcare workers. The measure, effective January 1, 2025, aims to alleviate financial pressures on PSWs and bolster recruitment and retention in a sector facing critical staffing shortages.
The tax credit directly addresses the challenges faced by the approximately 200,000 PSWs across Canada who provide essential care to seniors and individuals with disabilities. Budget 2025 earmarks $1.32 billion annually for the initiative, acknowledging the demanding nature of PSW work and the vital role they play in the Canadian healthcare system. This investment follows years of advocacy from unions and PSWs themselves for improved compensation and working conditions.
“This is a meaningful step forward in recognizing the invaluable contributions of Personal Support Workers,” stated The Honourable John Zerucelli, Canada’s Secretary of State for Labour and MP for etobicoke north. “It’s about respect for the workers who show up for us when it matters most.”
The announcement comes amid growing concerns about the aging Canadian population and the increasing demand for home and long-term care services. PSWs are frequently enough employed in precarious work arrangements with low wages and limited benefits, contributing to high turnover rates.The government anticipates the tax credit will incentivize individuals to enter and remain in the profession, helping to stabilize the care workforce.
Details released alongside the budget indicate the tax credit will be non-refundable, meaning it cannot result in a refund greater than the amount of income tax owed. PSWs will claim the credit on their 2025 income tax returns.Further consultations with provinces and territories are planned to ensure seamless implementation and maximize the benefit for PSWs nationwide.
