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Economy

Federal government’s recent fiscal record includes unprecedented levels of spending and debt

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4 minute read

From the Fraser Institute

By Jake Fuss and Grady Munro

As of 2024, Ottawa’s debt equals $51,467 per Canadian—12.3 per cent more than in 1995 when Canada reached a near-debt crisis.

According to an Angus Reid poll from earlier this year, 59 per cent of Canadians believe the federal government is spending too much and 64 per cent said they’re concerned about the size of the budget deficit. Nanos Research had similar polling results, finding 63 per cent of Canadians want Ottawa to reduce spending. These polling results are not surprising given the alarming state of federal finances.

The Trudeau government has consistently spent at record-high levels before, during and after COVID. In fact, Prime Minister Trudeau is on track to record the seven-highest years of per-person spending in Canadian history between 2018 and 2024. Inflation-adjusted spending (excluding debt interest costs) is expected to reach $11,856 per person this year—10.2 per cent higher than during the 2008-09 financial crisis and 28.7 per cent higher than during the peak of the Second World War.

Consequently, the Trudeau government has posted 10 consecutive deficits since taking office. The projected deficit in 2024/25 is a whopping $39.8 billion. This string of deficits has spurred a dramatic increase in federal debt. From 2014/15 (Prime Minister Harper’s last full year) to 2024/25, total federal debt is expected to have nearly doubled to $2.1 trillion. To make matters worse, the government plans to run more deficits until at least 2028/29 and total debt could rise by an additional $400.1 billion by March 2029.

Indeed, due to reckless decisions, the Trudeau government is on track to record the five-highest years of per-person debt (inflation-adjusted) in Canadian history between 2020 and 2024. As of 2024, Ottawa’s debt equals $51,467 per Canadian—12.3 per cent more than in 1995 when Canada reached a near-debt crisis.

Worse still, that doesn’t include any provincial or municipal debt, so the total government debt burden per Canadian is considerably higher.

Of course, to pay for this sky-high spending, the Trudeau government has borrowed and raised taxes. In addition to recently raising taxes on capital gains—harming entrepreneurship, investment and growth—the government has raised personal income taxes on middle-income families. Today, 86 per cent of middle-income Canadian families pay more in taxes than they did in 2015.

And what has this combination of tax increases and record-high spending and debt delivered for Canadians?

Amid widespread concerns about the rising cost of living, the average Canadian family is spending more on taxes than on food, shelter and clothing combined. Despite a recent federal budget supposedly focused on “fairness for every generation,” younger generations face a disproportionately higher tax burden in the future due to debt accumulated today. Meanwhile, Canadian living standards (as measured by inflation-adjusted GDP per person) are in a historic decline and (as of June 2024) stood 3.2 per cent below 2019 levels.

The current state of federal finances is simply unacceptable. Ottawa can and must do better. Canadians are already feeling the consequences, and it will only continue to get worse for future generations if we don’t constrain spending and return to balanced budgets soon.

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Economy

The White Pill: Big Government Can Be Defeated (Just Ask the Soviet Union)

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From StosselTV

People have been “black pilled” to think the world is doomed. Michael Malice says there’s hope.

In his book, “The White Pill,” he argues that tyrannical regimes, like the Soviet Union, can be toppled.

Today, media and universities distort history, and push socialism. It used to be worse. The New York Times once covered up Stalin’s famine, even as millions starved. Why? Malice says it’s because NYT star reporter Walter Duranty liked communism’s utopian promises, and status he got from his exclusive Stalin interviews.

Malice says the fall of the Soviet Union should give us hope that America can resist the universities and media’s brainwashing – or any tyranny that someone is “black pilled” about.

Our video explains Malice’s “white pill” and why you might want to take it.

After 40+ years of reporting, I now understand the importance of limited government and personal freedom.

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Libertarian journalist John Stossel created Stossel TV to explain liberty and free markets to young people.

Prior to Stossel TV he hosted a show on Fox Business and co-anchored ABC’s primetime newsmagazine show, 20/20.

Stossel’s economic programs have been adapted into teaching kits by a non-profit organization, “Stossel in the Classroom.” High school teachers in American public schools now use the videos to help educate their students on economics and economic freedom. They are seen by more than 12 million students every year.

Stossel has received 19 Emmy Awards and has been honored five times for excellence in consumer reporting by the National Press Club. Other honors include the George Polk Award for Outstanding Local Reporting and the George Foster Peabody Award.

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To get our new weekly video from Stossel TV, sign up here: https://www.johnstossel.com/#subscribe

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Alberta

Emissions cap threatens Indigenous communities with higher costs, fewer opportunities

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Dale Swampy, founder of the National Coalition of Chiefs. Photograph for Canadian Energy Centre

From the Canadian Energy Centre

By Deborah Jaremko

National Coalition of Chiefs founder Dale Swampy says Canada needs a more sustainable strategy for reducing emissions

The head of the National Coalition of Chiefs (NCC) says Ottawa’s proposed oil and gas emissions cap couldn’t come at a worse time for Indigenous communities.

Dale Swampy says the cap threatens the combined prospect of higher costs for fuel and groceries, along with fewer economic opportunities like jobs and revenues from involvement in energy projects.   

“Any small fluctuation in the economy is affected on our communities tenfold because we rely so much on basic necessities. And those are going to be the products that increase in price significantly because of this,” says Swampy, who founded the NCC in 2016 to fight poverty through partnerships with the natural resource sector.

He says that of particular concern is the price of fuel, which will skyrocket under the emissions cap because it will force reduced Canadian oil and gas production.

Analysis by S&P Global found that meeting the cap’s requirements would require a production cut of over one million barrels of oil equivalent per day (boe/d) in 2030, and 2.1 million boe/d in 2035.

“Production gets reduced, and the cost of fuel goes up,” Swampy says.

“Our concern is that everything that has to do with both fuel for transportation and fuel to heat our homes is amplified on First Nation communities because we live in rural Canada. We live in isolated communities, and it costs much more for us to operate our daily lives because we have to travel much further than anybody in a metropolitan area. So, it’s going to impact us greatly.”

Indigenous communities are already stretched financially, he says.

“What you could buy in 2019 terms of meat and produce is almost double now, and even though the inflation rate is trending downwards, we still haven’t gotten over the impact of what it costs for a bag of groceries these days,” Swampy says.

“In our communities, more than half are under the age of 21, so there’s a lot of bigger families out there struggling to just get food on the table.”

The frustrating timing of the cap is that it comes amid a rising tide of Indigenous involvement in Canadian oil and gas. Since 2022, more than 75 Indigenous communities in Alberta and B.C. have agreed to become part owners of energy projects.

Three major projects – the Trans Mountain Pipeline Expansion, Coastal GasLink Pipeline and LNG Canada export terminal – together have spent more than $11 billion with Indigenous and local businesses.

“We’re at a turning point right now. There’s a real drive towards getting us involved in equity opportunities, employment opportunities, and contracting opportunities,” Swampy says.

“Everybody who didn’t talk to us in the past is coming to our front door and saying, ‘Do you want to work with us?’ It couldn’t come at a worse time when we have this opportunity. The emissions cap is going to reduce the amount of activity, and it’s going to reduce the amount of investment,” he says.

“We’re part of that industry now. We’re entrenched in it now, and we have to support it in order to support our people that work in this industry.”

Economic growth, and more time, is needed to fund development of low emissions energy sources without ruining the economy, he says.

“I think we need more consultation. We’d like to see them go back to the table and try to incorporate more of a sustainable strategy for emission reductions,” Swampy says.

“We’re the only country in the world that’s actually incorporating this type of legislation. Do you think the rest of the world is going to do this type of thing? No, they’re going to eat our lunch. They’re going to replace the production that we give up, they’re going to excel in the economy because of it, and they won’t talk about significant emission reduction initiatives.”

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