Federal 2025 Budget

Effective January 1, 2027, the federal government proposes to simplify qualified investment rules that apply to seven types of registered plans shown here.  The new measures, under the government’s personal tax measures, would streamline the current rules for investments in small businesses.

Affected Registered Plans

• Registered Retirement Savings Plans (RRSPs)
• Registered Retirement Income Funds (RRIFs)
• Tax-Free Savings Accounts (TFSAs)
• Registered Education Savings Plans (RESPs)
• Registered Disability Savings Plans (RDSPs)
• First Home Savings Accounts (FHSAs)
• Deferred Profit-Sharing Plans (DPSPs)

Key Changes

• No longer qualified: Investments in limited partnerships and small business investment trusts will no longer be considered qualified.
• Expanded eligibility: RDSPs will be permitted to hold shares in specified small business corporations, venture capital corporations, and specified cooperative corporations

What are qualified investments

• The more common permitted investments include mutual funds, publicly traded securities, government and corporate bonds, and guaranteed investment certificates (GICs).
• The less common permitted investments include direct holdings in specified small business corporations, venture capitals, specified cooperatives, limited partnerships and small business investment trusts.  This category of investments is set to change in 2027.

Potential Implications

Direct investments in limited partnerships and small business investment trusts acquired before January 1, 2027, are expected to remain qualified under current rules.  

Individuals with such direct investments should seek personalized financial and tax advice to assess your impact.

Link to the Federal 2025 budget released on November 4, 2025 - Federal Budget 2025

‍

Disclaimer

This is intended for informational purposes only and does not constitute financial, legal, or tax advice. While we strive to provide accurate and up-to-date information, retirement plan strategies should be tailored to individual organizational needs and regulatory requirements. Readers are encouraged to consult with qualified professionals before making any decisions related to employer-sponsored retirement plans. Joseph Partners is not responsible for any actions taken based on the content of this post.