What The Liberals Victory Means for Canadian Investors

The Liberal Party, under the leadership of Prime Minister Mark Carney, has secured a minority government in Canada’s 2025 federal election. For investors, business owners, and high-net-worth Canadians, this marks the beginning of a new economic chapter—one focused on fiscal discipline, targeted investment, and affordability.

Here’s what you can expect under the new Carney government and how these changes may affect your financial strategy in the months and years ahead.

Income Taxes: Modest Relief, Broad Impact

One of the first changes expected is a reduction in the lowest federal personal income tax rate from 15% to 14% on income up to approximately $57,000. This could save a two-income family up to $825 annually (Investment Executive).

Wealth Strategy Insight: While the savings are modest, they can be directed toward RRSPs, TFSAs, or FHSAs. Importantly, no wealth taxes or new high-income surtaxes have been proposed—preserving policy stability for long-term planning.

Housing Policy: Supply Push + Immediate Incentives

Housing affordability is central to Carney’s platform. Key initiatives include:

• Eliminating GST on new homes under $1M for first-time buyers, saving up to $50,000 (Wikipedia).

• Launching a federal agency, Build Canada Homes, to help create up to 500,000 new homes annually (The Walrus).

• Tax incentives for rental construction, similar to the historical MURB program (Liberal Housing Plan).

• Halving development fees on multi-unit housing, with reimbursement to municipalities (Liberal Housing Plan).

Wealth Strategy Insight: Real estate investors may benefit from accelerated depreciation rules on rental builds. Families supporting first-time buyers should evaluate timing to take advantage of the GST exemption.

Investment Taxes: A Return to Stability

The government has cancelled the proposed capital gains inclusion rate hike, which would have raised the taxable portion from 50% to 66.7% on gains over $250,000 (Reuters).

Also, the Lifetime Capital Gains Exemption will increase to $1.25 million (Finance Canada).

Wealth Strategy Insight:This offers more runway for business owners planning succession or sales. Investors can continue with capital gains planning strategies as before.

Savings & Retirement Planning: Consistency and Opportunity

The 2025 TFSA limit is indexed to $7,000, and no changes have been proposed for RRSPs or RRIFs (CRA).

The First Home Savings Account (FHSA) remains a top tool for younger Canadians saving for a first property.

Wealth Strategy Insight: This policy stability benefits long-term planners. Clients should continue maximizing contribution room and consider integrating FHSAs into multigenerational strategies.

Broader Economic Outlook: Growth-Focused, Fiscal-Conscious

Key macroeconomic policies include:

• Eliminating the consumer carbon tax, effective immediately (CBC News).

• Infrastructure and defense spending increases, including a NATO-aligned 2% defense target (Globe & Mail).

• Targeting a federal deficit of 1.3% of GDP by 2028 (Globe & Mail).

  
  

Wealth Strategy Insight: Expect stability in credit markets and possibly downward pressure on inflation. Sector-specific growth in infrastructure, construction, and defense industries may offer targeted investment opportunities.

Final Thoughts: What This Means for DO Wealth Clients

Mark Carney’s platform brings economic steadiness and strategic opportunity. From capital gains stability and modest tax relief to real estate incentives and pro-growth spending, the landscape is favorable for both protecting and growing wealth.

At DO Wealth, we encourage clients to review current financial plans, update income strategies, and reassess investment positioning in light of this evolving fiscal environment. We're here to help you navigate it with confidence.

Contact your DO Wealth advisor to discuss how these changes could affect your portfolio and long-term goals.