Business
Federal government seems committed to killing investment in Canada
From the Fraser Institute
Business investment in the extraction sector (again, excluding residential structures and adjusted for inflation) has declined from $101.9 billion to $49.7 billion, a reduction of 51.2 per cent
Canada has a business investment problem, and it’s serious. Total business investment (inflation-adjusted, excluding residential construction) declined by 7.3 per cent between 2014 and 2022. The decline in business investment in the extractive sector (mining, quarrying, oil and gas) is even more pronounced.
During that period, business investment in the extraction sector (again, excluding residential structures and adjusted for inflation) has declined from $101.9 billion to $49.7 billion, a reduction of 51.2 per cent. In fact, from 2014 to 2022, declines in the extraction sector are larger than the total decline in overall non-residential business investment.
That’s very bad. Now why is this happening?
One factor is the heavy regulatory burden imposed on Canadian business, particularly in the extraction sector. How do we know that proliferating regulations, and concerns over regulatory uncertainty, deter investment in the mining, quarrying and oil and gas sectors? Because senior executives in these industries tell us virtually every year in a survey, which helps us understand the investment attractiveness of jurisdictions across Canada.
And Canada has seen an onslaught of investment-repelling regulations over the past decade, particularly in the oil and gas sector. For example, the Trudeau government in 2019 gave us Bill C-69, also known as the “no new pipelines” bill, which amended and introduced federal acts to overhaul the governmental review process for approving major infrastructure projects. The changes were heavily criticized for prolonging the already lengthy approval process, increasing uncertainty, and further politicizing the process.
In 2019, Ottawa also gave us Bill C-48, the “no tankers” bill, which changed regulations for vessels transporting oil to and from ports on British Columbia’s northern coast, effectively banning such shipments and thus limiting the ability of Canadian firms to export. More recently, the government has introduced a hard cap on greenhouse gas emissions coming from the oil and gas sector, and new fuel regulations that will drive up fuel costs.
And last year, with limited consultation with industry or the provinces, the Trudeau government announced major new regulations for methane emissions in the oil and gas sector, which will almost inevitably raise costs and curtail production.
Clearly, Canada badly needs regulatory reform to stem the flood of ever more onerous new regulations on our businesses, to trim back gratuitous regulations from previous generations of regulators, and lower the regulatory burden that has Canada’s economy labouring.
One approach to regulatory reform could be to impose “regulatory cap and trade” on regulators. This approach would establish a declining cap on the number of regulations that government can promulgate each year, with a requirement that new regulations be “traded” for existing regulations that impose similar economic burdens on the regulated community. Regulatory cap-and-trade of this sort showed success at paring regulations in a 2001 regulatory reform effort in B.C.
The urgency of regulatory reform in Canada can only be heightened by the recent United States Supreme Court decision to overturn what was called “Chevron Deference,” which gave regulators powers to regulate well beyond the express intent of Congressional legislation. Removing Chevron Deterrence will likely send a lot of U.S. regulations back to the drawing board, as lawsuits pour in challenging their legitimacy. This will impose regulatory reform in and of itself, and will likely make the U.S. regulatory system even more competitive than Canada.
If policymakers want to make Canada more competitive and unshackle our economy, they must cut the red tape, and quickly.
Author:
Alberta maintains a balanced budget while ensuring pressures from population growth are being addressed.
Alberta faces rising risks, including ongoing resource volatility, geopolitical instability and rising pressures at home. With more than 450,000 people moving to Alberta in the last three years, the province has allocated hundreds of millions of dollars to address these pressures and ensure Albertans continue to be supported. Alberta’s government is determined to make every dollar go further with targeted and responsible spending on the priorities of Albertans.
The province is forecasting a $4.6 billion surplus at the end of 2024-25, up from the $2.9 billion first quarter forecast and $355 million from budget, due mainly to higher revenue from personal income taxes and non-renewable resources.
Given the current significant uncertainty in global geopolitics and energy markets, Alberta’s government must continue to make prudent choices to meet its responsibilities, including ongoing bargaining for thousands of public sector workers, fast-tracking school construction, cutting personal income taxes and ensuring Alberta’s surging population has access to high-quality health care, education and other public services.
“These are challenging times, but I believe Alberta is up to the challenge. By being intentional with every dollar, we can boost our prosperity and quality of life now and in the future.”
Midway through 2024-25, the province has stepped up to boost support to Albertans this fiscal year through key investments, including:
- $716 million to Health for physician compensation incentives and to help Alberta Health Services provide services to a growing and aging population.
- $125 million to address enrollment growth pressures in Alberta schools.
- $847 million for disaster and emergency assistance, including:
- $647 million to fight the Jasper wildfires
- $163 million for the Wildfire Disaster Recovery Program
- $5 million to support the municipality of Jasper (half to help with tourism recovery)
- $12 million to match donations to the Canadian Red Cross
- $20 million for emergency evacuation payments to evacuees in communities impacted by wildfires
- $240 million more for Seniors, Community and Social Services to support social support programs.
Looking forward, the province has adjusted its forecast for the price of oil to US$74 per barrel of West Texas Intermediate. It expects to earn more for its crude oil, with a narrowing of the light-heavy differential around US$14 per barrel, higher demand for heavier crude grades and a growing export capacity through the Trans Mountain pipeline. Despite these changes, Alberta still risks running a deficit in the coming fiscal year should oil prices continue to drop below $70 per barrel.
After a 4.4 per cent surge in the 2024 census year, Alberta’s population growth is expected to slow to 2.5 per cent in 2025, lower than the first quarter forecast of 3.2 per cent growth because of reduced immigration and non-permanent residents targets by the federal government.
Revenue
Revenue for 2024-25 is forecast at $77.9 billion, an increase of $4.4 billion from Budget 2024, including:
- $16.6 billion forecast from personal income taxes, up from $15.6 billion at budget.
- $20.3 billion forecast from non-renewable resource revenue, up from $17.3 billion at budget.
Expense
Expense for 2024-25 is forecast at $73.3 billion, an increase of $143 million from Budget 2024.
Surplus cash
After calculations and adjustments, $2.9 billion in surplus cash is forecast.
- $1.4 billion or half will pay debt coming due.
- The other half, or $1.4 billion, will be put into the Alberta Fund, which can be spent on further debt repayment, deposited into the Alberta Heritage Savings Trust Fund and/or spent on one-time initiatives.
Contingency
Of the $2 billion contingency included in Budget 2024, a preliminary allocation of $1.7 billion is forecast.
Alberta Heritage Savings Trust Fund
The Alberta Heritage Savings Trust Fund grew in the second quarter to a market value of $24.3 billion as of Sept. 30, 2024, up from $23.4 billion at the end of the first quarter.
- The fund earned a 3.7 per cent return from July to September with a net investment income of $616 million, up from the 2.1 per cent return during the first quarter.
Debt
Taxpayer-supported debt is forecast at $84 billion as of March 31, 2025, $3.8 billion less than estimated in the budget because the higher surplus has lowered borrowing requirements.
- Debt servicing costs are forecast at $3.2 billion, down $216 million from budget.
Related information
Business
Trump’s government efficiency department plans to cut $500 Billion in unauthorized expenditures, including funding for Planned Parenthood
From LifeSiteNews
Elon Musk and Vivek Ramaswamy shared their plans to ‘take aim’ at ‘500 billion plus’ in federal expenses, including ‘nearly $300 million’ to ‘progressive groups like Planned Parenthood.’
Elon Musk and Vivek Ramaswamy are planning to ax taxpayer funding for Planned Parenthood as part of their forthcoming work for the next Trump administration, they revealed in a Wednesday op-ed in The Wall Street Journal.
The businessmen have been appointed by President Donald Trump to lead a new Department of Government Efficiency (DOGE), which will work from outside the official government structure to cut wasteful government spending and excess regulations, as well as “restructure federal agencies,” as Trump announced last week on Truth Social.
Musk and Ramaswamy shared Wednesday that as part of their work at DOGE to downsize government spending, they will be “taking aim at the $500 billion plus in annual federal expenditures that are unauthorized by Congress or being used in ways that Congress never intended,” thereby “delivering cost savings for taxpayers.”
They specifically called out Planned Parenthood as one institution that will lose taxpayer funding once DOGE kicks into gear. In their op-ed, the duo said the federal expenditures they plan on cutting includes the “nearly $300 million” dedicated “to progressive groups like Planned Parenthood.”
Musk and Ramaswamy also reportedly will take aim at the “$535 million a year to the Corporation for Public Broadcasting and $1.5 billion for grants to international organizations,” according to Catholic Vote, although they have not shared all of the federal spending they plan to cut or reduce.
“With a decisive electoral mandate and a 6-3 conservative majority on the Supreme Court, DOGE has a historic opportunity for structural reductions in the federal government,” the business duo wrote. “We are prepared for the onslaught from entrenched interests in Washington. We expect to prevail.”
Mogul and X owner Musk, who was outspoken before his DOGE appointment about the big problem of waste, noted last week that if the government is not made efficient, the country will go “bankrupt.”
He reposted a clip from a recent talk he gave in which he explained that not only is our defense budget “pretty gigantic” — a trillion dollars —but the interest the U.S. now owes on its debt is higher than this.
“This is not sustainable. That’s why we need the Department of Government Efficiency,” Musk said.
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