It’s time for an honest conversation about the costs of new federal programs

The Trudeau government will table its next budget on April 16, and with the government’s push on the initial steps of national pharmacare, it’s important to remember there’s a cost Canadians must pay for new and expanded government services.

In March, the Trudeau government and the NDP reached an agreement to introduce the first steps of a national pharmacare program that will initially cover diabetes drugs and contraceptives, but may eventually grow to cover far more. This marks the third major national social program introduced by the Trudeau government in recent years, accompanying the $10-a-day daycare and national dental care programs promised in Budget 2022.

These policies represent an approach by the federal government to expand its role in the funding and provision of social services—an approach which has support among Canadians. Polling data from 2022, which sought to understand Canadian views on new spending programs, revealed the majority of respondents supported $10-a-day daycare (69 per cent), pharmacare (79 per cent) and dental care (72 per cent)—when there were no costs attached.

The Trudeau government has chosen to fund these new programs primarily using debt. Through planned deficits and rising debt interest costs for the foreseeable future, Ottawa is shifting much of the burden of paying for today’s services onto future generations of Canadians. Put differently, the new services are not free, and must ultimately be paid for through higher taxes in the future because debt comes with costs.

It’s therefore informative to look at what happens to the popularity of these programs when the true costs are communicated to Canadians. Polling data clearly shows these new programs lose considerable support when linked to a direct cost in the form of an increase in the federal goods and services tax (GST). Indeed, support for government-funded pharmacare, dental care and daycare plummeted to well below 50 per cent of respondents if the services are paid for by increased taxes.

This is the key difference between Canada and countries such as Sweden or Denmark, which are often used as examples of countries that maintain expansive social services and income supports. These countries have gone much further than Canada regarding government provision of services, but have paid for it through corresponding tax increases applied to individuals and families today rather than through borrowed money. Moreover, the tax burden falls primarily on the middle class, which utilizes these services the most, as opposed to concentrating tax hikes on top income earners.

For example, Swedes earning more than US$62,000 per year face the country’s top marginal personal income tax rate of 52.3 per cent. In comparison, although Canada’s top marginal rate (53.5 per cent) is roughly the same level as Sweden’s, it doesn’t kick in until earnings of nearly US$177,000. Moreover, both Sweden and Denmark maintain a national sales tax rate of 25 per cent, while Canadians face sales taxes ranging from 5 per cent to 15 per cent (depending on the province). Simply put, the Nordic countries fund expansive government through high taxes on their citizens.

To put the cost of national dental care, day care and the first steps of pharmacare in context, an increase in the GST to 6 per cent from its current 5 per cent would be insufficient to pay for an estimated annual cost of at least $13 billion on these programs.

In recent years, the Trudeau government has introduced substantial social services without the corresponding tax increases required to pay for them. But increased federal spending will require higher taxes for families either today or in the future, and Canadians must remember this when deciding if they truly want these new programs.

Authors:

Jake Fuss and Grady Munro

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Saskatchewan becomes first Canadian province to fully eliminate carbon tax

Published on April 1, 2025

Todayville

From LifeSiteNews

By Clare Marie Merkowsky

Saskatchewan has become the first Canadian province to free itself entirely of the carbon tax.

On March 27, Saskatchewan Premier Scott Moe announced the removal of the provincial industrial carbon tax beginning April 1, boosting the province’s industry and making Saskatchewan the first carbon tax free province.

“The immediate effect is the removal of the carbon tax on your Sask Power bills, saving Saskatchewan families and small businesses hundreds of dollars a year. And in the longer term, it will reduce the cost of other consumer products that have the industrial carbon tax built right into their price,” said Moe.

Under Moe’s direction, Saskatchewan has dropped the industrial carbon tax which he says will allow Saskatchewan to thrive under a “tariff environment.”

“I would hope that all of the parties running in the federal election would agree with those objectives and allow the provinces to regulate in this area without imposing the federal backstop,” he continued.

The removal of the tax is estimated to save Saskatchewan residents up to 18 cents a liter in gas prices.

The removal of the tax will take place on April 1, the same day the consumer carbon tax will reduce to 0 percent under Prime Minister Mark Carney’s direction. Notably, Carney did not scrap the carbon tax legislation: he just reduced its current rate to zero. This means it could come back at any time.

Furthermore, while Carney has dropped the consumer carbon tax, he has previously revealed that he wishes to implement a corporation carbon tax, the effects of which many argued would trickle down to all Canadians.

The Saskatchewan Association of Rural Municipalities (SARM) celebrated Moe’s move, noting that the carbon tax was especially difficult on farmers.

“It puts our farming community and our business people in rural municipalities at a competitive disadvantage, having to pay this and compete on the world stage,” he continued.

“We’ve got a carbon tax on power — and that’s going to be gone now — and propane and natural gas and we use them more and more every year, with grain drying and different things in our farming operations,” he explained.

“I know most producers that have grain drying systems have three-phase power. If they haven’t got natural gas, they have propane to fire those dryers. And that cost goes on and on at a high level, and it’s made us more noncompetitive on a world stage,” Huber decalred.

The carbon tax is wildly unpopular and blamed for the rising cost of living throughout Canada. Currently, Canadians living in provinces under the federal carbon pricing scheme pay $80 per tonne.

Automotive

Electric cars just another poor climate policy

Published on April 1, 2025

Todayville

From the Fraser Institute

By Bjørn Lomborg

The electric car is widely seen as a symbol of a simple, clean solution to climate change. In reality, it’s inefficient, reliant on massive subsidies, and leaves behind a trail of pollution and death that is seldom acknowledged.

We are constantly reminded by climate activists and politicians that electric cars are cleaner, cheaper, and better. Canada and many other countries have promised to prohibit the sale of new gas and diesel cars within a decade. But if electric cars are really so good, why would we need to ban the alternatives?

And why has Canada needed to subsidize each electric car with a minimum $5,000 from the federal government and more from provincial governments to get them bought? Many people are not sold on the idea of an electric car because they worry about having to plan out where and when to recharge. They don’t want to wait for an uncomfortable amount of time while recharging; they don’t want to pay significantly more for the electric car and then see its used-car value decline much faster. For people not privileged to own their own house, recharging is a real challenge. Surveys show that only 15 per cent of Canadians and 11 per cent of Americans want to buy an electric car.

The main environmental selling point of an electric car is that it doesn’t pollute. It is true that its engine doesn’t produce any CO₂ while driving, but it still emits carbon in other ways. Manufacturing the car generates emissions—especially producing the battery which requires a large amount of energy, mostly achieved with coal in China. So even when an electric car is being recharged with clean power in BC, over its lifetime it will emit about one-third of an equivalent gasoline car. When recharged in Alberta, it will emit almost three-quarters.

In some parts of the world, like India, so much of the power comes from coal that electric cars end up emitting more CO₂ than gasoline cars. Across the world, on average, the International Energy Agency estimates that an electric car using the global average mix of power sources over its lifetime will emit nearly half as much CO₂ as a gasoline-driven car, saving about 22 tonnes of CO₂.

But using an electric car to cut emissions is incredibly ineffective. On America’s longest-established carbon trading system, you could buy 22 tonnes of carbon emission cuts for about $660 (US$460). Yet, Ottawa is subsidizing every electric car to the tune of $5,000 or nearly ten times as much, which increases even more if provincial subsidies are included. And since about half of those electrical vehicles would have been bought anyway, it is likely that Canada has spent nearly twenty-times too much cutting CO₂ with electric cars than it could have. To put it differently, Canada could have cut twenty-times more CO₂ for the same amount of money.

Moreover, all these estimates assume that electric cars are driven as far as gasoline cars. They are not. In the US, nine-in-ten households with an electric car actually have one, two or more non-electric cars, with most including an SUV, truck or minivan. Moreover, the electric car is usually driven less than half as much as the other vehicles, which means the CO₂ emission reduction is much smaller. Subsidized electric cars are typically a ‘second’ car for rich people to show off their environmental credentials.

Electric cars are also 320–440 kilograms heavier than equivalent gasoline cars because of their enormous batteries. This means they will wear down roads faster, and cost societies more. They will also cause more air pollution by shredding more particulates from tire and road wear along with their brakes. Now, gasoline cars also pollute through combustion, but electric cars in total pollute more, both from tire and road wear and from forcing more power stations online, often the most polluting ones. The latest meta-study shows that overall electric cars are worse on particulate air pollution. Another study found that in two-thirds of US states, electric cars cause more of the most dangerous particulate air pollution than gasoline-powered cars.

These heavy electric cars are also more dangerous when involved in accidents, because heavy cars more often kill the other party. A study in Nature shows that in total, heavier electric cars will cause so many more deaths that the toll could outweigh the total climate benefits from reduced CO₂ emissions.

Many pundits suggest electric car sales will dominate gasoline cars within a few decades, but the reality is starkly different. A 2023-estimate from the Biden Administration shows that even in 2050, more than two-thirds of all cars globally will still be powered by gas or diesel.

CanvasJS.com

Source: US Energy Information Administration, reference scenario, October 2023
Fossil fuel cars, vast majority is gasoline, also some diesel, all light duty vehicles, the remaining % is mostly LPG.

Electric vehicles will only take over when innovation has made them better and cheaper for real. For now, electric cars run not mostly on electricity but on bad policy and subsidies, costing hundreds of billions of dollars, blocking consumers from choosing the cars they want, and achieving virtually nothing for climate change.