Budget 2025: What it means for Canada’s auto care sector

The 2025 federal budget, tabled by Finance Minister François-Philippe Champagne, marks the first fiscal plan under Prime Minister Mark Carney’s government. Presented amid soft economic growth, rising unemployment, and persistent cost pressures, the budget delivers a mixed picture for Canada’s auto care industry—from mechanical and collision repair to parts, equipment, and aftermarket services. There is forward movement on data rights and skills recognition, but little direct support for the technicians, shop owners, and independent businesses that keep Canada’s vehicles on the road. 

Data access, mobility, and the right to repair 

One of the most notable developments is the proposal to establish a data-mobility right under the Personal Information Protection and Electronic Documents Act (PIPEDA). This measure would allow Canadians to direct their personal information between organizations, expanding consumer control over their data across the economy. 

For the auto care sector, however, this initiative falls short of what is needed to ensure full and fair access to vehicle repair and diagnostic information. Data mobility may help vehicle owners share limited information with independent service providers, but it does not compel manufacturers to make repair and maintenance data, tools, or software available on equal terms. 

This distinction is critical. As vehicles become increasingly connected and software-driven, access to diagnostic data determines whether independent businesses can compete and consumers can choose where and how their vehicles are serviced. Other jurisdictions, including the United States and the European Union, are moving toward automotive-specific right to repair frameworks to protect that choice. Canada’s approach remains a step behind—progressive in principle but incomplete in practice. 

Skilled trades and the labour pipeline 

Budget 2025 allocates $97 million over five years (beginning in 2026–27) for the Foreign Credential Recognition Action Fund, aimed at improving fairness and consistency in assessing foreign qualifications—particularly in the health and construction sectors. While the investment is a positive signal for skilled-trades recognition, there are no measures tailored to the automotive industry, which continues to face a growing shortage of licensed technicians, body repair specialists, and diagnostics experts. 

The government’s decision to reduce temporary resident admissions—from 673,650 in 2025 to 370,000 by 2027–28—adds another layer of pressure. Although policymakers note that sectoral needs will be considered, the overall reduction will tighten access to international labour pools just as the auto care sector struggles to recruit and retain skilled workers. Long-term solutions will require broader strategies to strengthen training, apprenticeship pathways, and recognition for automotive trades across Canada. 

Tooling costs and capital pressure 

The budget provides no new relief for the high cost of essential tools and diagnostic equipment. Without updates to the tradesperson’s tools deduction or targeted cost-offset programs, technicians and repair facilities must continue to absorb rising expenses for advanced calibration systems, electric vehicle (EV)-service tools, and manufacturer-specific diagnostics. For many small and medium-sized businesses, these costs represent a significant barrier to modernization and competitiveness in an increasingly complex repair environment. 

Broader economic context 

Budget 2025 introduces a new structure separating capital and operating expenditures, outlining $141 billion in net new spending over five years, offset by $51 billion in savings. The projected deficit stands at $78 billion, with a debt-to-GDP ratio of 42.4 per cent in 2025–26. Key investments include $81.8 billion over five years for national defence, $51 billion over ten years for the Build Communities Strong Fund, and $5 billion over seven years for the Trade Diversification Corridors Fund. These initiatives are intended to strengthen long-term economic foundations but offer limited short-term benefits for small, service-based industries such as automotive repair. 

Looking ahead 

For Canada’s auto care sector, Budget 2025 is a starting point rather than a solution. The proposed data-mobility right opens the door to greater consumer data control but does not yet guarantee fair access to vehicle repair information. Similarly, the focus on skilled-trades recognition and immigration reform acknowledges workforce challenges but lacks the auto-specific measures needed to sustain a robust pipeline of qualified technicians. 

Ensuring that Canadians continue to have affordable, accessible, and reliable vehicle service will depend on future policy steps—including a national right to repair framework, modernized tax tools for tradespeople, and coordinated workforce strategies. These changes will be vital to maintaining a competitive, innovative, and consumer-focused auto care industry in an increasingly digital and electrified mobility landscape.