By March 31, 2024, the Canadian federal government’s debt reached a high of $1.236 trillion—42.1% of GDP.
The system of government spending over the last six years has caused outrage and abundant criticism. It is a significant point of distrust but also hope for this year’s 2025 federal election.
A new poll by the Canadian Taxpayers Federation (CTF) shows that most Canadians want federal spending reduced and to see the size of the public service decreased.
43% of respondents believe federal government spending should decrease over the next five years. In comparison, 20% want an increase, 16% support maintaining current levels, and 20% were unsure.
As Canadians head to the polls on April 28th, 2025, government spending is pivotal.
Here’s a breakdown of where each party stands.
The Liberal Party
Spending Approach: Strategic investments in defense, housing, and economic diversification, with a focus on maintaining fiscal responsibility.
- Invest 2% of GDP in defense, including Arctic infrastructure and peacekeeping missions
- Allocate $5 billion for trade diversification and support for resource projects.
- Eliminate GST for first-time homebuyers on properties under $1 million
- Implement retaliatory tariffs against U.S. goods in response to American trade policies.
- Cap immigration levels until the housing crisis levels.
Pros:
- Emphasis on national security and economic resilience.
- Targeted tax relief for middle-income Canadians.
- Commitment to infrastructure projects that may stimulate job growth.
Cons:
- Substantial spending plans can easily prompt increased deficits.
- Is it feasible and realistic to balance operational spending within three years?
- Past unfulfilled promises, conflict-of-interest and record-breaking debt fuels public skepticism and lack of confidence.
The Conservative Party
Spending Approach: Focus on tax reductions, deregulation, and balancing the budget within a decade through spending cuts.
- Reduce the lowest income tax bracket from 15% to 12.75%.
- Eliminate the carbon tax and reduce regulatory burdens by 25% over four years.
- Accelerate approvals for energy projects and establish a national energy corridor.
- Cut federal spending by $53 billion over five years to achieve budget balance.
Pros:
- Potential for economic growth through deregulation and tax incentives
- Commitment to fiscal discipline and reducing government debt.
- Support for resource development may boost regional economies.
Cons:
- Significant cuts to public services could negatively impact healthcare and education, leaving many in difficult positions and accumulating greater personal debt.
- Elimination of environmental regulations will raise sustainability concerns and can reverse positive progress that has been made.
- Tax cuts will likely disproportionately benefit higher-income individuals, leaving lower-income groups behind.
The New Democratic Party
Spending Approach: Substantial investments in public services funded by increased taxation on wealthier individuals and corporations.
- Introduce a 1% wealth tax on fortunes over $20 million.
- Increase corporate tax rates from 15% to 18%.
- Implement universal pharmacare and dental care programs.
- Invest $10 billion to create 500,000 new child care spaces over four years.
Pros:
- Focus on reducing income inequality and enhancing social safety nets.
- Ambitious plans to expand access to healthcare and education.
- Potential to stimulate economic activity through public sector job creation.
Cons:
- Such high levels of new and extensive spending could increase deficits by a long shot.
- Tax increases could deter investment and economic growth.
- Implementation of expansive programs could experience many costly logistical challenges.
Bloc Québécois
Spending Approach: Increase federal transfers to provinces (especially Quebec), enhance social programs, and invest in environmental sustainability.
This would be funded through wealth taxes, closing tax loopholes, and taxing large digital companies.
- Increase federal health transfers to cover 35% of provincial healthcare costs.
- Raise retirement income for seniors and introduce caregiver tax credits.
- Dedicate 1% of federal revenues to social housing; tax real estate speculation.
- End fossil fuel subsidies and apply environmental criteria to federal policy.
- Generate $82B in new revenue through wealth and digital services taxes.
Pros:
- Strong focus on improving healthcare and services for seniors.
- Revenue-generating strategies prioritize tax fairness and social equity.
- Environmental commitments align with climate responsibility.
Cons:
- There is a high reliance on intergovernmental cooperation, which could stall implementation.
- Concern exists around how much the party’s platform would benefit provinces outside of Quebec.
- The emphasis on seniors benefits have faced criticism for cost feasibility.
The Green Party
Spending Approach: Invest in transitioning to a green economy, funded by taxing high-income earners and large corporations.
- Raise corporate taxes from 15% to 21%.
- Implement a 0.2% tax on financial transactions.
- Forgive all student debt and make post-secondary education free.
- Introduce a guaranteed annual income to replace existing social assistance programs.
Pros:
- Strong commitment to environmental sustainability and education.
- Progressive taxation aimed at reducing economic disparities.
- Innovative approaches to social welfare that inspire hope, especially for those historically disadvantaged.
Cons:
- Significant tax increases will face strong opposition from powerful businesses and investors.
- Such drastic and sweeping reforms would be very expensive, which could contribute to greater government spending and strain public finances.
- Lack of clarity around the processes and systems required to implement such change.
People’s Party of Canada
Spending Approach: Drastically reduce government spending, eliminate deficits, and shrink the size and scope of the federal government.
- Cut federal spending by phasing out equalization payments and corporate subsidies.
- Eliminate the carbon tax, reduce federal involvement in health care, and transfer power to provinces.
- Drastically lower immigration levels to reduce strain on public services and housing.
- Simplify and flatten the tax system — a two-rate personal income tax and lower corporate taxes.
Pros:
- Strong focus on balanced budgets and fiscal discipline.
- Reduced federal intervention is appealing to those who favour provincial independence.
- Simple tax reforms could streamline the system for individuals and businesses.
Cons:
- Deep cuts to public services and social programs could disproportionately affect vulnerable populations.
- Elimination of equalization may heighten regional inequalities and stir resentment.
- Extreme stances on immigration and climate policy have generated controversy within the mainstream.
Each party presents a distinct vision for Canada’s fiscal future. Voters must weigh the trade-offs between economic growth, social equity, and environmental sustainability.
As the election approaches, understanding these platforms is crucial for making an informed decision.
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