The cancellation of the capital gains tax increase and adjustments in GST remittances and corporate income tax payments were among Mark Carney’s notable moves after being elected leader of the federal Liberal Party on March 9—which made him Canada’s prime minister. These are likely to be key topics in the upcoming election, alongside discussions on trade and environmental sustainability.
Mark Carney took over as Canada’s prime minister last month following his win in the federal Liberal Party’s leadership race. Since then, he introduced some notable tax changes before formally requesting an election for April 28.
As Canadians prepare to vote, tax and economic policy issues are expected to play a major role in each party’s platform—particularly amid U.S. tariff tensions.
Here is a look at some of Carney’s actions as prime minister and the economic topics that may inform the political discourse during this election.
During his brief tenure as prime minister, Carney cancelled the proposed increase to the capital gains inclusion rate. The original proposal, which would have raised the capital gains inclusion rate from one-third to two-thirds, sparked a large debate around the effects of this increase.
The increase to the lifetime capital gains exemption limit to $1,250,000 on the sale of small business shares and farming and fishing property remains in place.
Carney also announced a deferral of corporate income tax payments and GST/HST remittances from April 2, 2025 to June 30, 2025—intended to provide up to $40 billion in liquidity to businesses.
These deferrals are expected to reduce administrative burdens and ease tax compliance, allowing businesses to better weather ongoing economic changes.
Income tax reform is expected to be a significant policy point this federal election. The major party leaders will likely share their respective plans for tax reform, particularly in the wake of Carney’s actions as prime minister and his proposal for a "middle class" tax cut aimed at providing immediate relief to Canadians.
The work of the Canada Revenue Agency (CRA) is also expected to be a point of debate among party leaders this election. While it may not dominate headlines, monitoring each party’s plans for the CRA is critical for businesses and individual taxpayers alike.
Another significant topic is the threat of tariffs, particularly in the context of international trade relations. As trade tensions with the U.S. continue, watch for party leaders to discuss their plans to mitigate tariffs’ effects on Canadian businesses and consumers.
Tariff uncertainty and the subsequent Buy Canadian movement put a renewed focus on economic diversification, removing interprovincial trade barriers and streamlining future national projects. These issues will likely factor into the major parties’ campaigns, particularly when it comes to establishing strong trade partnerships and investments in domestic infrastructure.
Climate change and environmental sustainability—and the tax incentives and federal supports that accompany these issues—are likely to be discussed during this election. Of note: Carney’s first action as prime minister was to remove the consumer carbon tax, effective April 1.
Expect each federal party to present their respective plans for reducing carbon emissions, promoting renewable energy and protecting natural resources. Look for potential discourse regarding tax incentives for making greener choices and plans for clean energy investments intended to lower costs for families and grow the economy.
