Business
Federal government should change course in upcoming budget to revitalize economy
From the Fraser Institute
By Jake Fuss and Grady Munro
From 2020 to 2030, Canada is projected to record the slowest rate of per-person GDP growth among 38 developed countries in the OECD. Simply put, Canada’s economy is stalling relative to its own past performance and other comparable countries around the world.
The Trudeau government will table its next budget on April 16, and it must address Canada’s stagnant economy. While the economy won’t turn around overnight, the government should recognize that its current policy approach isn’t working.
According to a recent Leger poll, nearly two-thirds of Canadians have a “poor” or “very poor” view of Canada’s economy. And it’s no wonder they feel this way. Canada is experiencing an economic growth crisis. From 2013 to 2022, inflation-adjusted per-person GDP (a broad measure of living standards) grew at its slowest pace since the Great Depression in the 1930s. Since the Trudeau government took office in 2015, per-person GDP (inflation-adjusted) in Canada has grown by only 1.9 per cent—nearly one-eighth the growth rate in the United States over that same period.
Moreover, from 2020 to 2030, Canada is projected to record the slowest rate of per-person GDP growth among 38 developed countries in the OECD. Simply put, Canada’s economy is stalling relative to its own past performance and other comparable countries around the world.
Why?
While there are many reasons for this slump in economic activity, consider the collapse of business investment in Canada. From 2014 to 2021, business investment per worker (excluding residential construction) fell from C$18,363 to C$14,687. In contrast, during that same period, business investment per worker in the United States grew from C$23,333 to C$26,751. In other words, Canada experienced the equivalent of a $43.7 billion decline in annual business investment while the U.S. enjoyed a C$585.1 billion increase (all figures adjusted for inflation).
Business investment is crucial for economic growth (and subsequent increased living standards) because it provides the resources needed to equip workers with tools and technology, for businesses to expand operations and become more productive, and for new businesses to enter the market. This in turn fuels innovation and productivity, which are key determinants of living standards.
Which brings us back to the Trudeau government. The collapse of business investment in Canada has been due in part to recent federal policy including Bill C-69, which introduced new and costly assessment criteria for energy projects, Bill C-48, which restricts tanker traffic off British Columbia’s north coast, and the forthcoming emissions cap on oil and gas, which will increase the cost of doing business in Canada.
Clearly, Ottawa has thrown up stiff regulatory barriers that deter investment in Canada’s energy and mining sectors. According to a 2023 survey of oil and gas executives, more than two-thirds of respondents viewed Canada’s regulatory environment as a deterrent to investment. And on the fiscal front, a string of deficits and massive debt accumulation create uncertainty around future tax increases, which gives investors another reason to take their money elsewhere.
Finally, the Trudeau government also believes that government should play an active role in the economy by handing out corporate welfare and subsidies to favoured industries and firms (i.e. electric vehicle battery industry). But when government tries to pick winners and losers in the market, it may actually inhibit rather than help the economy. Instead, the government should leave decisions in the free market to the investors, businessowners and entrepreneurs who have firsthand knowledge of their industries and businesses.
The Trudeau government has done little to promote economic growth and raise living standards for Canadians. While it will take time to turn things around, in its upcoming budget the government should finally change course and help revitalize the Canadian economy.
Authors:
From the Daily Caller News Foundation
By Thomas English
President Donald Trump’s Monday executive order establishing the Department of Government Efficiency (DOGE) presents a more modest scope for the initiative, focusing primarily on “modernizing federal technology and software.”
The executive order refashions the Obama-era United States Digital Service (USDS) into the United States DOGE Service. Then-President Barack Obama created USDS in 2014 to enhance the reliability and usability of online federal services after the disastrous rollout of HealthCare.gov, an insurance exchange website created through the Affordable Care Act (ACA). Trump’s USDS will now prioritize “modernizing federal technology and software to maximize efficiency and productivity” under the order, which makes no mention of slashing the federal budget, workforce or regulations — DOGE’s originally advertised purpose.
“I am pleased to announce that the Great Elon Musk, working in conjunction with American Patriot Vivek Ramaswamy, will lead the Department of Government Efficiency (‘DOGE’),” Trump said in his official announcement of the initiative in November. “Together, these two wonderful Americans will pave the way for my Administration to dismantle Government Bureaucracy, slash excess government regulations, cut wasteful expenditures, and restructure Federal Agencies.”
The order’s focus on streamlining federal technology and software stands in contrast to some of DOGE’s previously more expansive aims, including Elon Musk’s claim that “we can [cut the federal budget] by at least $2 trillion” at Trump’s Madison Square Garden rally in November. Musk now leads DOGE alone after Vivek Ramaswamy stepped down from the initiative Monday, apparently eying a 2026 gubernatorial run in Ohio.
The order says it serves to “advance the President’s 18-month DOGE agenda,” but omits many of the budget-cutting and workforce-slashing proposals during Trump’s campaign. Rather, the order positions DOGE as a technology modernization entity rather than an organization with direct authority to enact sweeping fiscal reforms. There is no mention, for instance, of trillions in budget cuts or a significant reduction in the federal workforce, though the president did separately enact a hiring freeze throughout the executive branch Monday.
“I can’t help but think that there’s more coming, that maybe more responsibilities will be added to it,” Susan Dudley, a public policy professor at George Washington University, told the Daily Caller News Foundation. Dudley, who was also the top regulatory official in former President George W. Bush’s administration, said the structure of the new USDS could impact the recent lawsuits against the DOGE effort.
“I think it maybe moots the lawsuit that’s been brought for it not being FACA,” Dudley said. “So if this is how it’s organized — that it’s people in the government who bring in these special government employees on a temporary basis, that might mean that the lawsuit doesn’t really have any ground.”
Three organizations — the American Federation of Government Employees (AFGE), National Security Counselors (NSC) and Citizens for Responsibility and Ethics in Washington (CREW) — separately filed lawsuits against DOGE within minutes of Trump signing the executive order. The suits primarily challenge DOGE’s compliance with the Federal Advisory Committee Act (FACA), alleging the department operates without the required transparency, balanced representation and public accountability.
The order also emphasizes not “be construed to impair or otherwise affect … the authority granted by law to an executive department or agency, or the head thereof; or the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.”
“And the only mention of OMB [Office of Management and Budget] is some kind of boilerplate at the end — that it doesn’t affect that. But that’s kind of general stuff you often see in executive orders,” Dudley continued, adding she doesn’t “have an inside track” on whether further DOGE-related executive orders will follow.
“It’s certainly, certainly more modest than I think Musk was anticipating,” Dudley said.
Trump’s order also establishes “DOGE Teams” consisting of at least four employees: a team lead, a human resources specialist, an engineer and an attorney. Each team will be assigned an executive agency with which it will implement the president’s “DOGE agenda.”
It remains unclear whether Monday’s executive order comprehensively defines DOGE, or if additional orders will be forthcoming to broaden its mandate.
From Conservative Party Communications
The Hon. Pierre Poilievre, Leader of the Conservative Party of Canada and the Official Opposition, released the following statement on the threat of tariffs from the US:
“Canada is facing a critical challenge. On February 1st we are facing the risk of unjustified 25% tariffs by our largest trading partner that would have damaging consequences across our country. Our American counterparts say they want to stop the illegal flow of drugs and other criminal activity at our border. The Liberal government admits their weak border is a problem. That is why they announced a multibillion-dollar border plan—a plan they cannot fund because they shut down Parliament, preventing MPs and Senators from authorizing the funds.
“We also need retaliatory tariffs, something that requires urgent Parliamentary consideration.
“Yet, Liberals have shut Parliament in the middle of this crisis. Canada has never been so weak, and things have never been so out of control. Liberals are putting themselves and their leadership politics ahead of the country. Freeland and Carney are fighting for power rather than fighting for Canada.
“Common Sense Conservatives are calling for Trudeau to reopen Parliament now to pass new border controls, agree on trade retaliation and prepare a plan to rescue Canada’s weak economy.
“The Prime Minister has the power to ask the Governor General to cut short prorogation and get our Parliament working.
“Open Parliament. Take back control. Put Canada First.”
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