With the federal election campaign in full swing, the parties are continuing to release pieces of their vision for how they would govern.
Beyond the gloss of the promises, we have been looking at the specific impacts of who benefits—and who doesn’t—from these proposals, when it comes to things like tax cuts and cash transfer programs. This article includes all measures announced so far that individual Canadians might benefit from in either lower taxes or higher cash transfers.
Using Statistics Canada’s tax modelling software to figure out the cost of each promise, we can measure the impact on those below the poverty line and the average impact by decile of tax filer—that is, 10 equally sized groups sorted by pre-tax income. See the methodology at the bottom of this article for the simulation details by program.
Here is the list of proposals by party that we’ll be examining:
The Green Party has promised a Guaranteed Annual Income, but it has not provided any details—like the amount, the clawback rate or integration with other programs—which means that we can’t actually model the impacts.
The Bloc proposes several measures with no details, meaning modelling and costing aren’t possible. These include improving Employment Insurance access and benefits, improving the Canada Child Benefit, tax incentives for seniors who continue working.
The Liberals, Bloc and Conservatives have all proposed eliminating the GST for some people on new home builds, that’s also not included.
All of the figures produced include the proposed programs as they would exist in 2025, as simulated by the Statistics Canada software. Not all the proposals above would be fully in place in 2025—for instance the CPC would phase in their bracket rate change over two years—but shifting them all to 2025 provides a common comparison.
If we combine all the proposed programs so far, we see that the Greens would provide by far the largest benefit to the second richest group of tax filers of almost $3,500 a piece. Under the Conservative program, the highest benefit would go to the richest decile, with an average gain of over $1,200. The Liberals group of measures provide roughly the same, on average $300/filer for the top 40 per cent. For the Greens, Conservatives and Liberals, there is basically no benefit for the lowest earners.
Of the measures proposed by the Bloc, the most benefit would go to low-middle income tax filers with averages of $300 to $400 a person. The richest see almost no benefit.
The NDP would provide an average of roughly $600 in savings per filer across all income levels, although the richest would only see a $106 benefit while those in the lower middle class would see $1000 in net gains.
As suggested from the income distribution, the NDP plan would provide the most help by a fair margin to those living below the poverty line (as defined by the market basket measure), with on average $618 more a year including all the programs above. The Bloc plan would provide a little under half the NDP one for those in poverty amounting to on average $256 per filer. The Greens are in a distant third, offering $123 in savings in 2025.
The Conservatives and Liberals offer basically nothing to those living below the poverty line— an average of $33 and $11, respectively.
No matter the party, these are massively expensive proposals. Only the NDP proposes even a single fleshed out way of paying for them, by reinstating fairer treatment for capital gains income. Although even with this one income-raising proposal, the net cost of the NDP suite is still $19.8 billion. The Greens, for their part, would spend three times the NDP—at over $60 billion a year. The CPC spend remains slightly less than the NDP coming in at $14.9 billion, still an incredible amount. This Bloc proposals add up to roughly half that at $6.8 billion and the lowest cost for individual supports comes from the Liberal platform, at $5.4 billion.
Both the Greens and the Liberals only have one item each in their plans for personal taxes and cash transfers. Both show little benefit to the lowest income earners, but of most benefit to high and high-middle earners. That’s because low-income filers already have enough tax credits to reduce their taxable income to zero—which means that giving them more credits or lowering their tax rate won’t help them.
The Conservatives’ proposal to expand the age exemption for seniors’ working income,and their plan to expand TFSA contribution limits by $5000, cost very little and have little impact on the aggregate average. Their big programs are the bracket and tax credit cut, which provides nothing to lower income filers and provides similar amounts to the top 40 per cent of filers. The deferral/elimination of capital gains for Canadian investments is heavily skewed towards the richest 10 per cent, who reap 65 per cent of the benefit. These combined yield the heavy average skew towards the richest.
The NDP expansion of the Basic Personal Amount (BPA) provides a little under $500, on average, for the top half of the income spectrum—except for the richest 10 per cent, who see less benefit. However, the BPA change does little for the lower and middle earners. The party offsets this by increasing the disability and seniors benefits that are heavily weighted to lower income tax filers. The NDP’s proposed increase in the capital gains rate would be paid almost exclusively by the top one per cent—it’s also the only measure in any party’s platform that attempts to actually raise revenue to pay for anything. Finally the party’s proposed GST cut on essentials roughly follows income, with the highest earners spending the most and seeing an average savings of $188. The middle incomes would see a benefit of $100 per person and lower income earners seeing $30 to $60 in savings.
The Bloc measures to eliminate the GST on used clothing costs almost nothing and provides almost no benefit in the aggregate. The increase in OAS payments for those 65 to 74, the higher working income exemption for GIS and the doubling of the GST credit in high inflation quarters are of particular help to the lower middle of the income distribution.
It is important to understand the average change across all individual tax and transfer changes for tax filers along the income spectrum. Statistics Canada’s tax modelling software runs the equivalent of all Canadian households through the proposed tax changes to get realistic values of what people can expect. These are generally much less than what party press releases promise, because those tend to calculate the hypothetical maximum values, not the average amounts people can actually expect.
We can expect more of these types of overstatements and promises in the weeks to come—so we will continue breaking these numbers down into their real-world impacts.
Methodology:
All simulations are for the 2025 tax year using Statistics Canada’s modeling software, the Social Policy Simulation Database and Model (SPSD/M) version 30.3. The following are the changes made to simulate the above programs.
Change the tax rate for the lowest bracket and rate for non-refundable tax credit (CPC/Liberal): These are existing black box variables in SPSD/M and are changed to appropriate values and then the representative database of all taxfilers was run through this variant scenario
Seniors working income age exemption boosted by $10,000 (CPC): While the age amount non-refundable tax credit is a black box variable in SPSD/M, there isn’t one that applies only to wages and salary income. I reprogrammed glass box SPSD/M to create that credit. Its value interacts with the change in the non-refundable rate and those changes are included in the simulation.
Eliminate cap gains on Canadian investments for individuals(CPC): The Conservatives estimate cost of this change to be $10.5 billion over 2 years for including both individual and corporations. Only the 2025 amount and only the personal amounts are included here. Using the 2025 Tax expenditures and evaluations report and assuming a similar distribution of savings across corporate and personal as already exists on the 50 per cent inclusion rate, the 2025 cost of the CPC program on the individual side would be $2.53 billion. I’ve reduced the inclusion rate for capital gains to match this cost in 2025. A 25 per cent inclusion rate for capital gains, down from 50 per cent in the base scenario. costs $2.5 billion, and that’s what being simulated.
TFSA room boosted an additional $5,000 (CPC): TFSA savings aren’t simulated in SPSD/M and so a different methodology is used. A similar boost in the TFSA amount was proposed in the 2015 federal budget. A proportional increase in the estimated TFSA tax expenditure is calculated here comparing the 2014 and the 2025 version. That estimate is also adjusted for much higher lifetime TFSA limits in 2025 and a lower proportion of TFSA holders who have maxed out their room in 2024 versus 2014. The estimated cost of $100 million is then distributed by the proportion of total income deciles that have maxed out their TFSA room in 2024, as they’d be the ones who would benefit for more room.
Basic Personal Exemption (NDP and Greens): These are existing black box variables in SPSD/M and are changed to appropriate values and then the representative database of all taxfilers was run through this variant scenario.
Doubling the Canada Disability Benefit to $4,800 (NDP): This is not yet a variable in SPSD/M. Extensive reprogramming of SPSD/M in glass box was necessary to accomplish this simulation. It relies on the glass box programmed for our October 2024 report on the Canada Disability Benefit and how to improve it. The simulation here compares the increase to $4,800 in the variant scenario, with the base scenario being the existing benefit of $2,400. The variant scenario also assumes the federal government accepts other federal and provincial programs’ definitions of disability to more rapidly include recipients who don’t have a Disability Tax Credit Certificate.
Improve the Guaranteed Income Supplement for seniors (NDP): The details of the improvements are not specified in the NDP but an aggregate cost is of $4 billion. I increased the basic amount for singles by $1,500, for couples by $1,000 and for widows by $1,000 to roughly arrive at their budgeted amount of $4 billion.
Increase capital gains inclusion rate to two-thirds for capital gains over $250,000 (NDP): These are existing black box variables in SPSD/M and are changed to appropriate values and then the representative database of all taxfilers was run through this variant scenario. The base scenario for this and all other scenarios is an inclusion rate of 50 per cent for all filers as the Budget 2024 change of a higher rate for earners over $250,000 was reversed prior to the start of the election.
Cut GST on essentials like home heating, cell/internet and meals from grocery stores (NDP): An extensive list of items was not provided in the platform, although some examples were given. SPSD/M has black box variables to simulate changes in tax rates by category of items. To that end I eliminated the GST on Natural gas, Other fuels and reduced it on electricity by half to simulate eliminating the GST on home heating. Only a portion of electricity is for home heating. I eliminated the GST on communications to simulate its removal on internet and cell phone bills. I reduced the GST paid by nine per cent on food and drinks purchased from stores, to simulate the reduction of GST on meals from grocery stores. The basic grocery store food items are already exempt from GST and GST would remain on much of grocery store food as the platform promise is only on a small slice of “meals” from grocery stores. SPSD/M allocates GST savings to the household members by their income, I’ve left that unchanged.
Increase Old Age Security for seniors aged 65 to 74 by 10% (Bloc):These in an existing black box variable in SPSD/M and it is changed to the appropriate values and then the representative database of all taxfilers was run through this variant scenario.
Increase the wages seniors can earn before the GIS clawback starts: A specific dollar amount isn’t specified, nor is a specific budget allocated. At present, seniors can earn wages and self-employment income of $5,000 and see no change in GIS. For the next $10,000, they’d see only half their earnings counted against GIS benefits. I’ve increased the initial amount from $5,000 in exempted income to $10,000 in exempted income, this is an existing SPSD/M black box variable.
Double the GST credit for every quarter inflation exceeds 3%: Its not known how many quarters of 2025 will have inflation above 3% due to tariffs for example. I’ve simulated that a single quarter is above the target. This is an existing black box variable in SPSD/M and it is changed to the appropriate value and then the representative database of all taxfilers was run through this variant scenario.
Remove the GST on second hand goods: Second hand clothes aren’t specifically modelled in SPSD/M’s GST categories. Therefore, I’ve decreased the GST on clothes and footwear generally by 1% (not 1% point) to reflect the fact that used clothes makes up a very small part of the overall sales of retail clothes.
