A Real Platform Should Not Promise the Impossible
‘Get More – Pay Less’ may be an appealing slogan for a store like Target, but we should hold our political leaders to a higher standard than big box chains. A search for efficiency in government delivery of benefits and services is a fine thing. But when promises to "tax less and spend more" are repeated election after election, we need to be wary. Because such promises risk leaving large unpaid bills for our kids and grandchildren. This pattern of unpaid bills is now common across most provincial and federal governments in Canada today.
Elections are prime time for parties to promise voters more of the things they want. These promises are rarely accompanied by thorough accountings of costs, or where the money will come from.
This election, parties must be honest about the choice we face: pay for the services we want, or scale down these services to the level we’re willing to pay. Responsible platforms offer a vision for how to balance trade-offs, rather than pretending it’s reasonable for voters to expect more while paying less.
What You Need to Know to Avoid Being Duped
Party leaders are promising tax cuts like they're candy from a Pez dispenser.
Gone are the days when Mr. Poilievre talked regularly about “fixing the budget”, or when Mr. Carney committed to “balance the operating budget.” The scale of tax cuts proposed by both leaders push this goal further out of reach.
To suggest the income tax cuts proposed by Conservatives and Liberals are compatible with each party's promise to eliminate the deficit in the next few years sounds very much like promising the impossible – like magical thinking. That’s worrisome, because it’s this kind of thinking that’s getting the US in trouble with Trump-style governance. Let’s not accept it here in Canada.
NDP leader Jagmeet Singh’s promised tax cuts would do the same – although he has never pledged to actually balance the budget, which is a problem unto itself.
Here’s the bottom line. Either politicians are trying to dupe us into believing the impossible. Or they simply aren't being honest about the fact we’re living well beyond our means – and expecting younger and future generations to pick up the tab for our unpaid bills. If we continue down this path even when our economy is not in a recession, neither option bodes well for the health of Canadian democracy.
Some leaders may suggest their tax cuts will stimulate enough economic growth to compensate for the revenue lost to lower tax rates. Beware of magical thinking.
Unless the party offers credible information showing how their stimulus will be so large it overcomes the economic drag caused by population aging, there is no reason to expect Canada’s economy will achieve growth levels that surpass the trends of the last quarter-century.
It is well is well documented across OECD countries that growth and productivity decline when there is a smaller proportion of workers in the labour market. This is Canada’s reality for the next decade-plus, now that baby boomers have retired. We can't wish it away. We must acknowledge, and adapt.
Dupe-O-Meter Party Assessments
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 March 27, 2025
The Conservatives tax cuts risk digging the deficit hole the deepest, followed by the NDP and then the Liberals.
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 billion deficit. (Note: the Liberals have a less expensive version of this tax cut, as we discuss below).
Mr. Poilievre also promises a number of 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 Party offers no indication of what these further tax breaks for seniors will cost.
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). 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. His party doesn’t give an estimate of how that would reduce revenue from GST, but it’s likely in the order of $3+ billion. We will search for more specific figures. (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 has proposed to cut taxes by $20 billion per year (and counting) – digging the $42 billion deficit hole still deeper.
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. Recall, Mr. Poilievre would exempt all buyers of newly constructed homes if the purchase price is under $1.3 million. Neither party offers any cost estimate of the lost revenue.
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 gap in Ottawa’s revenue.
In sum, the Liberal Party has punched a minimum $10 billion hole in the federal budget, which risks digging the current $42 billion deficit that much deeper.
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 $10 billion in revenue. Mr. Singh wants voters to think he has targeted his tax saving 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 billion a year.
This means the first week of the NDP campaign risks digging the $42 billion deficit deeper by another $14 billion: not as much as Poilievre, but more than Carney.
