Let's assess just how magical the magic solutions are for each party. How much deeper will each party dig the deficit hole?

As of April 23, 2025

No party presents a credible path to balance the budget.

Mr. Carney’s Liberals promise to balance the “operating budget.” Since their calculation excludes OAS and other major operational expenses, the value of this achievement is limited.

The NDP’s proposed tax hikes on the wealthy fall far short of eliminating the deficit.

The Conservatives promise to shrink the deficit by slashing foreign aid, the CBC, and consultants, yet still plan a significant deficit. Mr. Poilievre would have you believe his deficit will be 70 per cent smaller than Carney’s. But when we count revenue consistently in the parties’ platforms, Poilievre’s deficit is closer to three-quarters the size of Carney’s. Some of the remaining gap reflects little spending from Conservatives to protect the planet’s health from pollution, which puts our children in jeopardy.

Let's dig in deeper.

Conservatives

Mr. Poilievre promises to reduce the taxes Canadians pay on the first $56,000 we earn in a year. He would do so by cutting the tax rate from 15% to 12.75%. This would save individuals up to $900 per year. When added up across all taxpayers, this tax cut would create a $14 billion annual hole in federal revenue – exacerbating the current $42-$47 billion deficit (the range varies with different sources).  (Note: the Liberals have a less expensive version of this tax cut, as we discuss below).

Mr. Poilievre also promises two sizeable tax breaks specifically for seniors.  He promises to shelter another $10,000 of their income from any income taxation; and also delay by two years when retirees must pay taxes on income they have previously sheltered in RRSPs.  The Conservative platform estimates that these changes will cost $2 billion per year, or $8 billion over the next four.

His government would expand how much money all Canadians can shelter in Tax Free Savings Accounts (TFSAs) – increasing the threshold from $7,000 per year to $12,000 (if the extra money is invested in Canadian companies).  This would cost $0.3 billion over four years. It’s worth noting that taking full advantage of TFSA room is something older people are much more likely to do than younger people.

Mr. Poilievre promises to eliminate GST when newly constructed homes are bought, if the purchase price is under $1.3 million.  The Conservative platform estimates that this will cost about $2 billion per year. (Note, the Liberals propose a less expensive version of this tax cut, focused on delivering savings just for first-time buyers, not all buyers. See below).

Mr. Poilievre campaigned to eliminate the planned increase to the taxation of capital gains.  Mr. Carney has already announced that plan will not go forward.  It adds another ~$3.5 billion annual hole to federal revenue.

All told, the Conservative Party of Canada promises lots of tax cuts and some new spending.  By its own numbers, it will still fun a $14 billion deficit in 2028. But that includes applying $21 billion in revenue towards the party's bottom line in a way that differs from the accounting practices of the Liberals and NDP.  When revenue is treated consistently between the parties, the Poilievre deficit number may be as high as $36 billion in 2028 compared to the Carney number of $48 billion.

Liberals

Mr. Carney would also reduce the taxes Canadians pay on the first $56,000 we earn in a year, cutting the tax rate from 15% to 14%, at a cost of $5.9 billion per year. This price tag is about 40% of the cost of Mr. Poilievre’s proposal, with commensurately smaller savings per taxpayer:  closer to $400, not $900.

Mr. Carney also wants to eliminate GST on newly constructed homes. But he is more targeted.  The Liberal party would reserve this tax break only for first-time homebuyers, and only on purchases that are under $1 million. This will cost about $400 million per year.  Recall, Mr. Poilievre would exempt all buyers of newly constructed homes if the purchase price is under $1.3 million.  

In his first days as Prime Minister, Mr. Carney already proposed to scrap the changes to capital gains taxation planned by Mr. Trudeau in the last budget.  This creates a further ~$3.5 billion annual gap in Ottawa’s revenue spread over the next four years.

In sum, Mr. Carney’s Liberals plan to burst through the fiscal guard rails it set in previous years under the Trudeau government. He promises to balance what he calls the “operating budget,” but excludes OAS and other large spending items that are not capital investments.  Deficit-financing large infrastructure projects would make sense to shore up our defence, build homes, fight climate change. But that shouldn’t preclude revisiting whether operational spending is efficient, including the delivery of $18,000 in annual OAS subsidies to retired couples with $180,000 in income. 

NDP

Mr. Singh proposes a slightly different way to cut income taxes.  Rather than adjust the lowest tax rate, he proposes to expand the “basic exemption.”  This means he is increasing the initial amount of income that is entirely exempt from income taxation. This exemption would grow close to $20,000 under Mr. Singh’s plan. At maximum, it would save each taxpayer around $500. Ottawa would lose about $12 billion in annual revenue.  Mr. Singh wants voters to think he has targeted his tax savings more to lower-earners than the other parties.  But his is a distinction without much difference. Canadians with incomes up to $178,000 will receive the full benefit.  This means that more than 95% of Canadian earners will get the tax break, which is a far cry from targeting lower-earners

Mr. Singh is also keen to make permanent much of the GST holiday that Mr. Trudeau introduced over the Christmas period. It is estimated this will reduce federal revenue by over $4.5 billion a year.

To help pay for these tax cuts, and the party's new spending, especially on medical care, the NDP fiscal approach would lean heavily on taxing the most wealthy. For example, the party proposes an annual levy on Canadians who have more than $10 million in wealth. However, this approach still only brings in around $23 billion per year – about half of the deficit projected for this year.

All told, the NDP would run deficits in 2028 that are comparable to the Liberal plan.  However, the NDP has no plan for Canada to meet its commitment to NATO by increasing military spending to 2 per cent of GDP.  Since such spending is likely essential for Canada going forward given new US threats, the NDP deficit is likely under-estimated by comparison with the Liberals and Conservatives.