Liberal leadership candidate Chrystia Freeland is promising to cut income taxes for 11 million Canadians within the first year of forming government, according to a release from her campaign.
Freeland made the announcement as part of a broader plan focusing on affordability issues facing Canadians.
The former finance minister is targeting the second income tax bracket where she is promising to cut the current tax rate from 20.5 per cent to 19 per cent. Freeland says it would mean an annual savings of $550 for people whose taxable income is between $57,375 and $114,750 in 2025.
Part of Freeland’s plan would also cut to the Goods and Service Tax (GST) for first-time homebuyers if she becomes the next prime minister, as first reported Tuesday by CTV News.
Freeland’s GST relief would apply to homes worth up to $1.5 million and could save young Canadians as much as $75,000 on the purchase of their first home.
The measures are the latest policy planks unveiled by Freeland in the shortened leadership race which concludes March 9.
Fellow Liberal leadership candidate Karina Gould already announced a three-pillar housing plan last week centred around the goals of reducing or eliminating homelessness, increasing housing supply and supporting first-time homebuyers.
Gould’s plan includes expanding on the First-Time Home Buyer Incentive (FTHB), which was discontinued in March of 2024.
The proposal put forth by Gould would have increased the percentage offered through the FTHB for a down payment from 10 per cent to 50 per cent, while also offering a tax credit of $2,000 on the provincial land transfer tax for first-time homebuyers.
Gould is also proposing building modular homes that are climate resilient and cheaper as part of a larger industrial housing strategy.
Last October, Conservative Leader Pierre Poilievre promised a Conservative government would get rid of the federal sales tax on all new homes worth up to $1 million. He also called on premiers to eliminate the provincial sales tax on these new homes.
Conservatives estimate their measure could save homebuyers $50,000 on a home that costs up to $1 million.
Housing affordability has been a key issue for many voters. A November report from Statistics Canada shows nearly half (45 per cent) of Canadians reported being “very concerned about housing affordability” because of the rising costs of housing or rent.
Freeland is also planning to go after credit card companies and grocery stores. If Freeland forms government, she has promised to cap credit card interest rates at 15 per cent and says she will “work towards a 10 per cent cap”.
She is also proposing to cap profit margins for big grocery companies on grocery essentials like eggs, milk, fruits and vegetables, canned goods, and baby formula.
A similar idea was proposed last July by NDP leader Jagmeet Singh, when he called on the federal government to cap the price on certain items to lower prices
Freeland left cabinet on Dec. 16 in a stinging resignation letter saying she was at odds with Prime Minister Justin Trudeau over a number of policies, including the GST holiday and $250 cheques the government had planned to hand out to working Canadians.
Freeland called them “costly political gimmicks”, which she didn’t think Canadians can afford with the economic threat of U.S. tariffs looming.
Her resignation coupled with growing calls for a change in leadership, pushed Trudeau to announce his resignation as Liberal leader.
