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Canada’s economy has stagnated despite Ottawa’s spin

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From the Fraser Institute

By Ben Eisen, Milagros Palacios and Lawrence Schembri

Canada’s inflation-adjusted per-person annual economic growth rate (0.7 per cent) is meaningfully worse than the G7 average (1.0 per cent) over this same period. The gap with the U.S. (1.2 per cent) is even larger. Only Italy performed worse than Canada.

Growth in gross domestic product (GDP), the total value of all goods and services produced in the economy annually, is one of the most frequently cited indicators of Canada’s economic performance. Journalists, politicians and analysts often compare various measures of Canada’s total GDP growth to other countries, or to Canada’s past performance, to assess the health of the economy and living standards. However, this statistic is misleading as a measure of living standards when population growth rates vary greatly across countries or over time.

Federal Finance Minister Chrystia Freeland, for example, recently boasted that Canada had experienced the “strongest economic growth in the G7” in 2022. Although the Trudeau government often uses international comparisons on aggregate GDP growth as evidence of economic success, it’s not the first to do so. In 2015, then-prime minister Stephen Harper said Canada’s GDP growth was “head and shoulders above all our G7 partners over the long term.”

Unfortunately, such statements do more to obscure public understanding of Canada’s economic performance than enlighten it. In reality, aggregate GDP growth statistics are not driven by productivity improvements and do not reflect rising living standards. Instead, they’re primarily the result of differences in population and labour force growth. In other words, they aren’t primarily the result of Canadians becoming better at producing goods and services (i.e. productivity) and thus generating more income for their families. Instead, they primarily reflect the fact that there are simply more people working, which increases the total amount of goods and services produced but doesn’t necessarily translate into increased living standards.

Let’s look at the numbers. Canada’s annual average GDP growth (with no adjustment for population) from 2000 to 2023 was the second-highest in the G7 at 1.8 per cent, just behind the United States at 1.9 per cent. That sounds good, until you make a simple adjustment for population changes by comparing GDP per person. Then a completely different story emerges.

Canada’s inflation-adjusted per-person annual economic growth rate (0.7 per cent) is meaningfully worse than the G7 average (1.0 per cent) over this same period. The gap with the U.S. (1.2 per cent) is even larger. Only Italy performed worse than Canada.

Why the inversion of results from good to bad? Because Canada has had by far the fastest population growth rate in the G7, growing at an annualized rate of 1.1 per cent—more than twice the annual population growth rate of the G7 as a whole at 0.5 per cent. In aggregate, Canada’s population increased by 29.8 per cent during this time period compared to just 11.5 per cent in the entire G7.

Clearly, aggregate GDP growth is a poor tool for international comparisons. It’s also not a good way to assess changes in Canada’s performance over time because Canada’s rate of population growth has not been constant. Starting in 2016, sharply higher rates of immigration have led to a pronounced increase in population growth. This increase has effectively partially obscured historically weak economic growth per person over the same period.

Specifically, from 2015 to 2023, under the Trudeau government, inflation-adjusted per-person economic growth averaged just 0.3 per cent. For historical perspective, per-person economic growth was 0.8 per cent annually under Brian Mulroney, 2.4 per cent under Jean Chrétien and 2.0 per cent under Paul Martin.

Due to Canada’s sharp increase in population growth in recent years, aggregate GDP growth is a misleading indicator for comparing economic growth performance across countries or time periods. Canada is not leading the G7, or doing well in historical terms, when it comes to economic growth measures that make simple adjustments for our rapidly growing population. In reality, we’ve become a growth laggard and our living standards have largely stagnated for the better part of a decade.

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‘Context Of Chemsex’: Biden-Harris Admin Dumps Millions Into Developing Drug-Fueled Gay Sex App

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From the Daily Caller News Foundation 

By Owen Klinsky

The Biden-Harris administration is spending millions funding a project to advise homosexual men on how to more safely engage in drug-fueled intercourse.

The University of Connecticut (UCONN) in July announced a five-year, $3.4 million grant from the U.S. National Institute of Health (NIH) for Assistant Professor Roman Shrestha to develop his app JomCare — “a smartphone-based just-in-time adaptive intervention aimed at improving access to HIV- and substance use-related harm reduction services for Malaysian GBMSM [gay, bisexual, and other men who have sex with men] engaged in chemsex,” university news website UCONN Today reported. “Chemsex,” according to Northern Irish LGBTQ+ nonprofit the Rainbow Project, is the involvement of drug use in one’s sex life, and typically involves Methamphetamine (crystal meth), Mephedrone (meth), and GHB and GBL (G).

Examples of the app’s use-cases include providing a user who has reported injecting drugs with prompts about ordering an at-home HIV test kit and employing safe drug injection practices, UCONN Today reported. The app is also slated to provide same-day delivery of HIV prevention drug PrEP, HIV self-testing kits and even a mood tracker.

“In Malaysia, our research has indicated that harm reduction needs of GBMSM [gay, bisexual, and other men who have sex with men] engaged in chemsex are not being adequately met,” Shrestha told UCONN Today. “Utilizing smartphone apps and other mHealth tools presents a promising and cost-effective approach to expand access to these services.”

Homosexuality is illegal in Malaysia and is punishable by imprisonment, according to digital LGBTQ+ rights publication Equaldex. Drug use, including of cannabis, is illegal in Malaysia, and drug trafficking can be a capital offense.

The NIH disbursed $773,845 to Shrestha in July to conduct a 90-day trial testing the efficacy of JomCare among 482 chemsex-involved Malaysian gays. It also provided Shrestha with $191,417 in 2022 to “facilitate access to gender-affirming health care” for transgender women in the country.

“Gender-affirming care” is a euphemism used to describe a wide range of procedures, including sometimes irreversible hormone treatments that can lead to infertility as well as irreversible surgeries like mastectomies, phalloplasties and vaginoplasties.

Shrestha has a track record of researching mobile health (mHealth) initiatives for foreign homosexuals, co-authoring a 2024 study entitled, “Preferences for mHealth Intervention to Address Mental Health Challenges Among Men Who Have Sex With Men in Nepal.”

The proliferation of LGBT rights has been a “foreign policy priority” under the Biden-Harris administration, a State Department spokesperson previously told the Daily Caller News Foundation, with President Joe Biden instructing federal government department heads to “to advance the human rights of LGBTQI+ persons.”

“Around the globe, including here at home, brave lesbian, gay, bisexual, transgender, queer, and intersex (LGBTQI+) activists are fighting for equal protection under the law, freedom from violence, and recognition of their fundamental human rights,” a 2021 White House memorandum states. “The United States belongs at the forefront of this struggle — speaking out and standing strong for our most dearly held values.”

President-elect Donald Trump announced on Nov. 12 that Elon Musk and Vivek Ramaswamy would collaborate to establish a new Department of Government Efficiency (DOGE), with Musk claiming the agency would feature a leaderboard for the “most insanely dumb spending of your tax dollars.” Some DOGE cuts could come from LGBTQ+ programs, such as a grant from the United States Agency for International Development to perform sex changes in Guatemala and State Department funding for the showing of a play in North Macedonia entitled, “Angels in America: A Gay Fantasia on National Themes.”

“The woke mind virus consists of creating very, very divisive identity politics…[that] amplifies racism; amplifies, frankly, sexism; and all of the -isms while claiming to do the opposite,” Musk said at an event in Italy in December 2023, according to The Wall Street Journal. “It actually divides people and makes them hate each other and hate themselves.”

Shrestha and the NIH did not respond to requests for comment. When reached for comment, a UCONN spokeswoman told the Daily Caller News Foundation that, “specific questions about the grant and the decision to award it to our faculty member should be directed to the NIH, since that’s the funding agency.”

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Broken ‘equalization’ program bad for all provinces

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From the Fraser Institute

By Alex Whalen  and Tegan Hill

Back in the summer at a meeting in Halifax, several provincial premiers discussed a lawsuit meant to force the federal government to make changes to Canada’s equalization program. The suit—filed by Newfoundland and Labrador and backed by British Columbia, Saskatchewan and Alberta—effectively argues that the current formula isn’t fair. But while the question of “fairness” can be subjective, its clear the equalization program is broken.

In theory, the program equalizes the ability of provinces to deliver reasonably comparable services at a reasonably comparable level of taxation. Any province’s ability to pay is based on its “fiscal capacity”—that is, its ability to raise revenue.

This year, equalization payments will total a projected $25.3 billion with all provinces except B.C., Alberta and Saskatchewan to receive some money. Whether due to higher incomes, higher employment or other factors, these three provinces have a greater ability to collect government revenue so they will not receive equalization.

However, contrary to the intent of the program, as recently as 2021, equalization program costs increased despite a decline in the fiscal capacity of oil-producing provinces such as Alberta, Saskatchewan, and Newfoundland and Labrador. In other words, the fiscal capacity gap among provinces was shrinking, yet recipient provinces still received a larger equalization payment.

Why? Because a “fixed-growth rule,” introduced by the Harper government in 2009, ensures that payments grow roughly in line with the economy—even if the gap between richer and poorer provinces shrinks. The result? Total equalization payments (before adjusting for inflation) increased by 19 per cent between 2015/16 and 2020/21 despite the gap in fiscal capacities between provinces shrinking during this time.

Moreover, the structure of the equalization program is also causing problems, even for recipient provinces, because it generates strong disincentives to natural resource development and the resulting economic growth because the program “claws back” equalization dollars when provinces raise revenue from natural resource development. Despite some changes to reduce this problem, one study estimated that a recipient province wishing to increase its natural resource revenues by a modest 10 per cent could face up to a 97 per cent claw back in equalization payments.

Put simply, provinces that generally do not receive equalization such as Alberta, B.C. and Saskatchewan have been punished for developing their resources, whereas recipient provinces such as Quebec and in the Maritimes have been rewarded for not developing theirs.

Finally, the current program design also encourages recipient provinces to maintain high personal and business income tax rates. While higher tax rates can reduce the incentive to work, invest and be productive, they also raise the national standard average tax rate, which is used in the equalization allocation formula. Therefore, provinces are incentivized to maintain high and economically damaging tax rates to maximize equalization payments.

Unless premiers push for reforms that will improve economic incentives and contain program costs, all provinces—recipient and non-recipient—will suffer the consequences.

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