Liberals’ Platform Promises $130 Billion in New Spending, Larger Deficits

Liberal Leader Mark Carney speaks during the French-language federal leaders' debate in Montreal on April 16, 2025. The Canadian Press/Christopher Katsarov

The Liberal Party has released the price tag of its election platform, which comes to about $130 billion in new spending over the next four years while running deficits until at least fiscal year 2028–29.

The party released its costed platform on April 19, a day after advance voting opened for four days over the Easter weekend, with election day fast approaching on April 28.

Most of the items had previously been announced on the campaign trail by leader Mark Carney.

New defence spending, housing, and tax cuts are some of the commitments that come with the biggest price tags included in the $129.2 billion spending.

The fiscal and costing plan only includes tariff revenues for the current fiscal year, indicating that $20 billion is expected to be generated in 2025–26 from Canada’s counter-tariffs imposed in response to U.S. tariffs on Canadian imports. These include aluminum, steel, vehicles, and other goods not covered under the U.S.-Mexico-Canada trade agreement.

It’s a move that Carney said was deliberate. “We don’t want to rely on those tariff revenues ... so we concentrate them today and will deal with them tomorrow,” he said during a campaign stop in Whitby, Ontario, on April 19.

The costed Liberal platform predicts a deficit of $62.3 billion this fiscal year followed by a lower deficit in 2026–27 of around $60 billion. It forecasts a further drop for the 2027–28 fiscal year to a deficit of $55 billion, and then $48 billion in 2028–29.

“This is not a normal fall update, budget lockup,” Carney said. “We are in the middle of the biggest crisis of our lifetimes, and this is a plan that meets that moment in a way that is very prudent with people’s hard-earned tax dollars, but bold in terms of where this country can go.”

Carney said a government he runs would also tackle spending, saying the Liberal government had been previously “spending too much.”

“We’re going to bring that level of spending growth down from 9 percent to 2 percent,” he said.

“We will do it in a way [such that] we will not cut any transfers to provinces, to territories, or individuals. We will protect all of those, but we will balance our operating budget over the next three years by cutting waste, by eliminating duplication, and by deploying technology.”

Boosting Military Spending

The Liberals committed to an increase of some $18 billion toward national defence and to meet NATO’s target of 2 percent of GDP by 2030. The spending increase will cover a pay raise for Canadian Armed Forces (CAF) members, the platform document said.

Carney’s plan also includes building new housing on bases across Canada and ensuring access to child care and doctors, including mental health services, for CAF members and their families.

The platform also includes money for new submarines and additional heavy icebreakers for the Royal Canadian Navy.

Canada will also buy more aerial and underwater drones to survey the Arctic and the country’s undersea infrastructure and borders under the Liberal plan. Money will also be spent on purchasing Canadian-made airborne early warning and control aircraft and building new deepwater ports to support destroyers patrolling Northern waters.

Housing

The Liberal platform includes a $6 billion investment in a new initiative, dubbed Build Canada Homes, tasked with building and acquiring affordable housing, supportive housing, and shelters, including on public lands.

In addition, Carney’s plan would see over $25 billion in financing offered to innovative prefabricated homebuilders and $10 billion in low-cost financing and capital to homebuilders to build housing targeting middle- and low-income Canadians.

Tax Cuts

The Liberals also reiterated in their platform their earlier pledge to lower the tax rate on the lowest income tax bracket, bringing it down 1 percentage point from 15 percent to 14 percent.

Carney said the cut would come into effect by Canada Day 2025

For first-time homebuyers, the platform makes room for cutting the GST on homes up to $1 million and reducing the GST on homes between $1 million and $1.5 million.

Criticism

The Canadian Taxpayers Federation criticized Carney’s budget plan, calling it “even more irresponsible than the Trudeau plan.”

In an April 19 news release, the group said Carney’s plan will add $225 billion to the federal debt, considering the projected annual budget deficits of $62 billion, $60 billion, $55 billion, and $48 billion over the four years from 2025–26 to 2028–29.

The federation noted that, according to the 2024 Fall Economic Statement, former Prime Minister Justin Trudeau had planned on increasing the debt by a smaller amount, $131.4 billion, over that same four-year period, with annual deficits running at $42.2 billion, $31 billion, 30.4 billion, and then $27.8 billion.

Conservative Leader Pierre Poilievre likewise criticized the size of the deficits in the Liberals’ election platform, saying it would lead to inflation.

“Amazingly, Carney plans to run EVEN BIGGER inflationary deficits than Justin Trudeau had already budgeted,” he said in a social media post. “This inflationary spending means higher taxes and higher cost of living.”

Poilievre says his party will be releasing its costed platform soon.

NDP Leader Jagmeet Singh said the Liberal platform includes cuts that “could come in health care and services.”

“The Liberals are proposing massive cuts at a time of potential recession, uncertainty, anxiety and worry, and that is the last thing that we need,” Singh said at a campaign stop in Burnaby, B.C., on April 19, where the NDP also released its costed platform.