Where the parties stand on tax fairness in Election 2025

With the election just days away, all parties have finally released their platforms. We've combed through to assess their commitments on key tax issues identified by Canadians for Tax Fairness and our supporters. Unsurprisingly, at the top of our list is a wealth tax. Other critical tax measures we have been calling for are an end to oil and gas subsidies, an excess profits tax on large corporations, and preventing offshore tax avoidance. These four policies would redistribute power that has been concentrated amongst the wealthy and large corporations, help us shift away from our fossil fuel reliance, and raise public revenue to fund vital public services and infrastructure. Here’s where the parties stand on tax fairness in the federal election.

Which parties have plans to implement key tax fairness priorities in this election?

Taking bold steps on a wealth tax

The NDP and Green Party have both released comprehensive plans for tax reform that include a progressive wealth tax on wealth over $10 million. This is one of the best measures we could implement to both tackle rampant inequality and raise significant public revenue to fund a just transition and vital public services. None of the other three major parties have plans to implement a wealth tax.

Combatting offshore tax avoidance

The issue that the largest number of parties have addressed is tax avoidance, in part because Mark Carney’s use of tax havens at Brookfield Asset Management turned this into a top election issue. The NDP and Greens have the strongest plans to tackle this issue. Both parties have promised to end tax agreements with known tax havens and require corporations to prove they have a genuine business reason to move assets abroad. For their part, the Bloc Quebecois promised to ensure Canadian-controlled profits are not exempt from taxes when returned to Canada from tax havens. The Conservatives also announced a plan to address tax avoidance, although it is short on specifics, leaving most of the work to a future tax review commission, something the NDP, Greens and Liberals also promised. 

Taxing the excess profits of the largest corporations in Canada

The NDP, Greens, and Bloc Quebecois each have different plans when it comes to corporate taxation. The NDP has promised a 2% surtax on corporate profits over $500 million a year, a slightly watered-down version of our super-profits tax proposal. The Greens promised a stronger version of this proposal – a 7 percentage point increase to the corporate tax rate on profits over $100 million – as well as a permanent windfall profits tax. This would be a powerful tool that would discourage corporations from price-gouging during future crises. The Bloc Quebecois has a more limited proposal to implement an excess profits tax on oil and gas companies. The revenue from this tax would go directly to climate change adaptation measures.

Fossil fuel subsidies

The NDP, the Greens and the Bloc Quebecois all committed to ending all subsidies for oil and gas companies. This is an important measure to ensure we stop encouraging reliance on heavily polluting fossil fuels. The CPC and LPC, however, not only fail to address the issue of subsidies but leave the door open for new or increased subsidies in the future.

Tax cuts for the “middle class”

In an effort to answer pocketbook affordability concerns, each party has offered their version of a “middle class” income tax cut. The LPC and CPC both propose lowering the tax rate on the first tax bracket from 15 to 14 per cent and 15 to 12.75 per cent, respectively. Only those with over $57,375 in taxable income will receive the full benefit of these proposed tax cuts, and neither party offers a measure to regain the revenue through another tax measure at the higher end of the income spectrum, leaving our healthcare and income support programs in danger of billions in cuts. 

The NDP’s plan chooses instead to increase the basic personal amount exempt from taxation from $16,129 to $19,000 for people making under $177,882 and then balances the move somewhat revenue-wise by speeding the scale of the clawback of that exemption for those with higher incomes, rescinding it completely for incomes above $235,632. The GPC also proposes increasing the basic personal amount but to a whopping $40,000 for incomes under $100,000, which will cost about $50 billion a year, according to the PBO. While each of these moves may put a few hundred to a couple of thousand dollars back into the pockets of individuals, it's questionable whether this will actually help affordability, especially if it means key government supports and investments remain underfunded.

Taxes and affordable housing

Both the LPC and CPC are proposing GST exemptions and reductions on new house builds, but with little evidence that it will improve housing affordability. The LPC plans to cut GST on new homes up to $1 million and lower it on homes between $1 million and $1.5 million for first-time buyers. Considering that only about 25% of homes sold are new, many first-time homebuyers won’t see any benefit from this measure (GST isn’t charged on resold homes). The CPC proposal is even worse, cutting the GST for new homes under $1.3 million for all buyers, even those buying as an investment property. While these measures may provide a slight incentive to build housing, there is no condition on affordability and much of the benefit will end up in developers’ pockets. 

The NDP’s housing plan reflects key tax changes recommended in our report on housing affordability. Canada’s capital gains tax break and tax exemptions for Real Estate Investment Trusts have abetted the financialization of Canada’s housing market, which in turn has led to rapidly increasing rents. In 2022 alone, $100 million collected by the largest seven residential REITs was distributed to investors tax-free through the partial inclusion of capital gains. In 2023, average rents increased by 8% while the real estate sector collected $50.4 billion in profits. The NDP promised to end the tax exemption for REITs and maintain the partial closure of the capital gains tax loophole brought forward last year. 

More tax cuts for the rich

Finally, the CPC is once again leaning into the age-old playbook of trickle-down economics. In a supposed effort to promote investment in Canada, they propose to expand contribution levels for TFSAs by $5,000 and eliminate capital gains taxes for funds that are invested in Canada. So here’s how it would work. A wealthy individual could sell investments and pay no tax on profits from the sale if they turn around and invest those profits in, for example, a Canadian oil and gas company, even if the majority of that company is owned by foreign investors. They can then further ensure they pay no tax on the profit made through their oil and gas investment by putting the investment in their now-expanded TFSA. This same scenario could play out in the kind of real estate investment schemes that have fueled rent increases in major cities across Canada. Only the rich will benefit from these proposals.

Several major parties have put forward proposals that would take huge strides towards ensuring the rich paid their fair share and average Canadians would thrive on the path to a low-carbon economy. Unfortunately, the LPC and CPC plans, if implemented, will move us away from these goals.