Toronto, ON — This week, the Government of Canada announced a new $1,100 refundable tax credit for Personal Support Workers (PSWs) as part of Budget 2025. It is a long-awaited measure that will put real money back into the pockets of those who care for our most vulnerable. For thousands of PSWs across the country, this change represents more than just financial relief. It is a clear acknowledgement of the essential role that care workers play in our healthcare system and a recognition that their work, often unseen and undervalued, deserves real respect and support. The IAM welcomes this announcement as a collective victory for workers and the broader labour movement. For years, unions have gone to Ottawa to advocate for stronger protections and fair treatment for the people who keep our communities running.
Whether the issue has been pensions, wages, or working conditions, we have spoken with one message: when governments invest in workers, they invest in the strength and future of Canada.
What This Tax Credit Means For You
The new PSW tax credit will come into effect in 2026 and continue for five years, through 2030. It is a refundable credit worth up to $1,100 per year, calculated as five percent of a worker’s eligible earnings. Based on current information, PSWs will receive the benefit even if they owe little or no income tax, although further details are awaited by the Canada Revenue Agency.
The measure will apply broadly across the country. At present, only British Columbia, Newfoundland and Labrador, and the Northwest Territories have formal wage-support agreements, also known as Aging With Dignity Funding Agreements, with the federal government for PSWs. That means PSWs in every other province and territory will qualify for this new federal credit, providing direct, tangible relief to thousands of care workers represented by unions like the IAM.
When the 2026 tax year begins, eligible PSWs will be able to claim the credit directly through their federal income tax return. No separate application or registration will be required. Members should simply ensure that their employment and income records are accurate when filing taxes. The IAM will continue to monitor the rollout and share any additional guidance from the Canada Revenue Agency as details become available.
More importantly, this measure signals growing recognition by the Government of Canada of what we have said for years: that PSWs are indispensable to Canada’s healthcare and long-term care systems, yet too often underpaid and overstretched. This credit does not solve every issue, but it represents a meaningful step toward valuing the people who provide daily care to our aging population and loved ones.
The new PSW tax credit is proof that this message is being heard. It reflects what is possible when workers, unions, and government come together around shared goals that lift people up and strengthen our public services. IAM members across the healthcare sector know that PSWs are the backbone of long-term care, hospitals, and community health. They give comfort, dignity, and safety to those who need it most. This tax credit is a step in the right direction, but our work is not finished. It must be followed by stronger labour standards, fair wages, and safe workplaces that reflect the true value of this essential profession.
As we celebrate this important achievement, we do so knowing that it belongs to everyone who fought for it – the PSWs who never stopped showing up for others, and the unions that stood beside them to make their voices heard. This is what progress looks like when workers stand together. Through persistence, solidarity, and advocacy, we are shaping a Canada that truly values the people who make it work every day.
