The Mixed Couple- One Canadian, One American
By Bryant Andrus
Profile: The Mixed Couple — One Canadian, One American
TL;DR
- The April 28 election delivered a near-majority Liberal government: the capital gains increase stays dead, the LCGE holds at $1.25 million, and the consumer carbon tax is gone.
- For mixed US-Canadian couples, the non-citizen spouse problem is unchanged: without a QDOT, the unlimited US marital deduction is not available to a Canadian spouse.
- With the loonie near 72 US cents, cross-border retirement and estate plans should be stress-tested at 70, 75 and 80 cents, not just today's rate.
If you’re in a household where one spouse is Canadian and the other holds a US passport — whether you’re living in Canada, the US, or splitting time between both — the April 28 federal election mattered to your financial plan in ways that go beyond politics.
Mark Carney’s Liberals secured 169 seats and a near-majority government, fueled by an electorate that rallied around economic sovereignty and trade-war resolve. Conservative leader Pierre Poilievre lost his own seat. The NDP was reduced to seven. The result means policy direction is now clearer — but a minority government means every tax measure still requires parliamentary support.
What Changed for Mixed Couples
The Liberals confirmed they will not revive the capital gains inclusion rate increase. The Lifetime Capital Gains Exemption stays at $1.25 million for qualifying small business shares. The consumer carbon tax is gone. These are meaningful wins for Canadian planning. But for mixed couples, the more relevant question is how the Canadian changes interact with US obligations — and that analysis starts with a problem that didn’t change: the non-citizen spouse problem.
If the American spouse dies first and leaves assets to the Canadian spouse, the unlimited US marital deduction is not available. A non-citizen spouse cannot inherit unlimited US assets free of estate tax without a Qualified Domestic Trust (QDOT), though the Canada–US treaty offers a limited marital credit as a partial alternative. This is one of the most underplanned issues in mixed-nationality households, and the renewed stability of the cross-border planning environment in April 2025 makes it the right moment to address it properly.
The Currency Issue No One Is Talking About
The Canadian dollar ended April near 72 US cents — up from roughly 70 cents for much of the winter. For a mixed couple where income comes from both sides of the border, currency is not just an inconvenience. It is a planning variable that affects everything from retirement income projections to the Canadian-dollar value of US estate assets to the foreign tax credit calculations on your US return. Your plan should be stress-tested at 70, 75, and 80 US cents, not just the current rate.
Ready to Talk?
Cross-border planning is time-sensitive and highly fact-specific. If any of the topics in this issue apply to your situation, we would welcome the conversation. State Bird Corp specializes in US–Canada cross-border tax, estate, and immigration planning for families and businesses on both sides of the border. Our team works with clients across the US and Canada — wherever your cross-border life takes you.
Sources
- https://www.exchange-rates.org/exchange-rate-history/usd-cad-2025-04-30
- https://sftaxcounsel.com/blog/a-closer-look-at-the-u-s-canada-tax-treaty-article-governing-the-u-s-estate-tax/
- https://www.irs.gov/individuals/international-taxpayers/nonresident-spouse
- https://www.cbc.ca/news/politics/takeaways-election-results-1.7521355
- https://enrichedthinking.scotiawealthmanagement.com/2025/04/07/cancellation-of-the-proposed-capital-gains-inclusion-rate-increase/
- https://www.cbc.ca/news/politics/mark-carney-drops-carbon-tax-1.7484290
Sincerely,
The State Bird Corp Team
State Bird Corp
P: (602) 641-5996 · E: Info@statebirdcorp.com · W: statebirdcorp.com
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State Bird Corp is a management and financial consulting firm. State Bird Corp is not an accounting, legal or investment advisory firm. Cross-border planning is highly fact-specific. The strategies and topics described are general in nature, and readers should consult qualified specialists before taking any action. Any recommendation, inferences, or other guidance contained herein is meant for educational or general purposes and should not be relayed upon as specific advice for any person or business. Consult your legal, tax, and investment advisor for specific recommendation to your situation.