Liberal platform promises $130B in new spending over 4 years, adding $225B to federal debt

The Liberal Party of Canada is promising to roll out almost $130 billion in new spending over the next four years that, when combined with existing spending, will add $225 billion to the federal debt.

A re-elected Liberal government says the biggest spending initiatives in its plan include cutting the lowest marginal tax rate, which will cost the treasury about $22 billion over the next four years.

Other significant expenditures in the party's four-year plan include a pledge to increase existing defence spending by $17.2 billion in order to meet the two per cent NATO spending target.

"In a world of growing threats, Canada must be equipped to detect and deter those who would attack our sovereignty," the platform said.

"We have a plan to meet our NATO commitments and ensure that the Canadian Armed Forces (CAF) has the equipment they need to defend our sovereignty."

Aside from new equipment, that additional spending will go toward giving CAF members a raise while improving housing and other benefits, modernizing the recruitment process and cracking down on sexual misconduct.

Liberal Leader Mark Carney's plan to double the pace of home building, by creating a standalone agency called Build Canada Homes (BCH), will cost about $3 billion annually over the next four years.

Describing as a "lean, mission-driven organization," BCH will act as a developer, overseeing the construction of affordable housing in Canada.

A re-elected Liberal government is also pledging to provide funding to municipalities in order for them to cut development charges in half, at a cost of $1.5 billion annually over the next four years.

When combined with the more than $4 billion in tax incentives to repurpose buildings into housing, the Liberal platform is pledging to spend another $22 billion over four years.

The platform says it will be able to boost government revenues over the four years by $51.8 billion, with $20 billion of that coming from tariffs alone in 2025-26.

The Liberal platform only accounts for tariff revenue in the first year of its four-year plan, suggesting it will find some way to resolve the trade dispute with the United States in the next year.

The rest of the projected increase in revenue will come from two sources.

The first revenue stream will come from increasing tax penalties and fines through the Canada Revenue Service to the tune of $3.8 billion over four years.

The second will come from "increased government efficiency," which will begin with $6 billion in savings in 2026-27, rising to $9 billion the following year and hitting a peak of $13 billion a year in 2028-29.

The platform follows on Carney's promise to separate operational spending, the annual cost of programs and other expenditures from capital investments — that is, the investment in things like infrastructure.

The operating budget deficit this year is predicted to be just over $9 billion, which the Liberal platform predicts it can get down to just $220 million by 2028-29.