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Next federal government has to unravel mess created by 10 years of Trudeau policies

Published

12 hours ago

4 minute read

From the Fraser Institute

By Jock Finlayson

It’s no exaggeration to describe the Trudeau years as almost a “lost decade” for Canadian prosperity.

The Justin Trudeau era is ending, after nine-and-a-half years as prime minister. His exit coincides with the onset of a trade crisis with the United States. Trudeau leaves behind a stagnant Canadian economy crippled by dwindling productivity, a long stretch of weak business investment, and waning global competitiveness. These are problems Trudeau chose to ignore throughout his tenure. His successors will not have that luxury.

It’s no exaggeration to describe the Trudeau years as almost a “lost decade” for Canadian prosperity. Measured on a per-person basis, national income today is barely higher than it was in 2015, after stripping out the effects of inflation. On this core metric of citizen wellbeing, Canada has one of the worst records among all advanced economies. We have fallen far behind the U.S., where average real income has grown by 15 per cent over the same period, and most of Europe and Japan, where growth has been in the range of 5-6 per cent.

Meanwhile, Ottawa’s debt has doubled on Trudeau’s watch, and both federal government spending and the size of the public service have ballooned, even as service levels have generally deteriorated. Housing in Canada has never been more expensive relative to average household incomes, and health care has never been harder to access. The statistics on crime point to a decline in public safety in the last decade.

Reviving prosperity will be the most critical task facing Trudeau’s successor. It won’t be easy, due in part to a brewing trade war with the U.S. and the retreat from open markets and free trade in much of the world. But a difficult external environment is no reason for Canada to avoid tackling the domestic impediments that discourage economic growth, business innovation and entrepreneurial wealth creation.

In a recent study, a group of economists and policy advisors outlined an agenda for renewed Canadian prosperity. Several of their main recommendations are briefly summarized below.

Return to the balanced budget policies embraced by the Chretien/Martin and Harper governments from 1995 to 2015. Absent a recession, the federal government should not run deficits. And the next government should eliminate ineffective spending programs and poor-performing federally-funded agencies.

Reform and reduce both personal and business income taxes. Canada’s overall income tax system is increasingly out of line with global best practise and has become a major barrier to attracting private-sector investment, top talent and world-class companies. A significant overhaul of the country’s tax policies is urgently needed.

Retool Ottawa’s existing suite of climate and energy policies to reduce the economic damage done by the long list of regulations, taxes, subsidies and other measures adopted Trudeau. Canada should establish realistic goals for lowering greenhouse gas emissions, not politically manufactured “targets” that are manifestly out of reach. Our climate policy should reflect the fact that Canada’s primary global comparative advantage is as a producer and exporter of energy and energy-intensive goods, agri-food products, minerals and other industrial raw materials which collectively supply more than half of the country’s exports.

Finally, take a knife to interprovincial barriers to trade, investment and labour mobility. These long-standing internal restrictions on commerce increase prices for consumers, inhibit the growth of Canadian-based companies, and result in tens of billions of dollars in lost economic output. The next federal government should lead a national effort to strengthen the Canadian “common market” by eliminating such barriers.

Jock Finlayson

Senior Fellow, Fraser Institute
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Alberta

Alberta pushes back on illegal U.S. tariffs

Published on March 5, 2025

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Alberta’s government is implementing a proportionate, measured response to U.S. tariffs and taking decisive action on internal trade with free trade and mobility agreements.

As part of its non-tariff retaliatory measures, Alberta is altering its procurement practices to ensure Alberta’s government, as well as agencies, school boards, Crown corporations and Alberta municipalities, purchase their goods and services from Alberta companies, Canadian companies or countries with which Canada has a free trade agreement that is being honoured.  

“I will always put the best interests of Alberta and Albertans first. These non-tariff actions are measured, proportionate and put an emphasis on defending Alberta and Canada against these economically destructive tariffs imposed by U.S. President Donald Trump, while breaking down restrictive provincial trade barriers so we can fast-track nation building resource projects and allow for the unrestricted movement of goods, services and labour across the country. I understand this is an uncertain time for many Albertans, and our government will continue to do all it can to prioritize Alberta’s and Canada’s world-class products and businesses as we face this challenge together. I also look forward to working with my provincial counterparts to help unite Canada and ensure free and fair trade throughout our country.”

Danielle Smith, Premier

Alberta’s government has also directed Alberta Gaming, Liquor and Cannabis to suspend the purchase of U.S. alcohol and video lottery terminals (VLTs) from American companies until further notice. This will ensure Alberta and Canadian brands take priority in restaurants, bars and on retail shelves.

“We are committed to putting Canadian businesses first. By suspending the purchase of U.S. produced alcohol, slot machines and VLTs, we are ensuring that Alberta and Canadian brands take priority in our restaurants, bars and retail stores. We will continue to take bold steps to support local industries and strengthen our economy.”

Dale Nally, Minister of Service Alberta and Red Tape Reduction

To encourage the purchase of stock from vendors in Alberta, Canada and other countries with which Canada has a free trade agreement, the government will help all Alberta grocers and other retailers with labelling Canadian products in their stores. In the coming weeks, Alberta’s government will augment these efforts by launching a “Buy Alberta” marketing campaign. Spearheaded by Minister of Agriculture and Irrigation RJ Sigurdson, this campaign will remind Albertans of their options for local food and the importance of supporting Alberta’s agriculture producers and processers.

“Alberta’s agriculture producers and processers are the best in the world. Although these U.S. tariffs are incredibly concerning, this “Buy Alberta” campaign will put a spotlight on Alberta’s farmers, ranchers and agri-food businesses and support Albertans in choosing goods from right here at home.”

RJ Sigurdson, Minister of Agriculture and Irrigation

Building on Alberta’s reputation as a leader in removing barriers to trade within Canada, Alberta’s government will continue to push other provinces to match our ambition in providing full labour mobility and eliminating trade barriers through work like mutual recognition of regulations. This will allow for goods, services and labour from other provinces to flow into and out of Alberta without having to undergo additional regulatory assessments.

“While no one wins in a tariff war, this situation underscores the need to develop Canada’s trade infrastructure and the diversification of our trading partners and could be the catalyst to unlocking Canada’s true potential. As we look at how best to support Albertans and our businesses, we must also work to reduce internal trade and labour mobility barriers while expanding markets for Alberta energy, agricultural and manufactured products into Europe, Asia, the Americas and beyond. Albertans and Canadians are counting on us.”

Matt Jones, Minister of Jobs, Economy and Trade

Alberta’s government is also focused on doubling oil production. With U.S. tariffs in place on Canadian energy products, Alberta is looking elsewhere for additional pipeline infrastructure, including east and west, in order to get our products to new markets.

Alberta’s government will continue to engage with elected officials and industry leaders in the U.S. to reverse these tariffs on Canadian goods and energy and rebuild Canada’s relationship with its largest trading partner and ally.

Quick facts

  • On March 4, U.S. President Trump implemented a 25 per cent tariff on all Canadian goods and a 10 per cent tariff on Canadian energy.
  • The U.S. is Alberta’s – and Canada’s – largest trading partner.
  • Alberta is the second largest provincial exporter to the U.S. after Ontario.
    • In 2024, Alberta’s exports to the U.S. totalled C$162.6 billion, accounting for 88.7 per cent of total provincial exports.
    • Energy products accounted for approximately C$132.8 billion or 82.2 per cent of Alberta’s exports to the U.S. in 2024.
  • About 10 per cent of liquor products in stock in Alberta are imported from the United States.
    • U.S. products represent a small minority of the beer and refreshment beverage categories; however, a significant number of wines originate in the U.S.
    • In 2023-24, about $292 million in U.S. liquor products were sold in Alberta.
  • Alberta has been a longstanding supporter of reducing barriers to trade within Canada. In 2019, the province removed 21 of 27 exceptions, including all procurement exceptions, and narrowed the scope of two others. Since then, the province has only added 2 exceptions, which allow for the management the legalization of cannabis.
    • Removing party-specific exemptions has helped facilitate even greater access to the Alberta market for Canadian companies in the areas of government tenders, Crown land acquisition, liquor, energy and forest products, among others.
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Business

Trump gives top three U.S. automakers one-month break from tariffs

Published on March 5, 2025

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From The Center Square

By 

 

President Donald Trump will give the big three U.S. automakers a one-month exemption from tariffs he imposed on Mexico and Canada, White House Press Secretary Karoline Leavitt said.

Leavitt said the pause on tariffs for automakers would ensure they aren’t put at a disadvantage. The request came from the heads of Ford Motor Co., General Motors Co. and Stellantis NV, she said.

Earlier Wednesday, Trump said he spoke with Canada’s Prime Minister Justin Trudeau, but the two weren’t able to reach a deal.

“Justin Trudeau, of Canada, called me to ask what could be done about Tariffs. I told him that many people have died from Fentanyl that came through the Borders of Canada and Mexico, and nothing has convinced me that it has stopped,” Trump wrote in a post on Truth Social. “He said that it’s gotten better, but I said, ‘That’s not good enough.’ The call ended in a ‘somewhat’ friendly manner! He was unable to tell me when the Canadian Election is taking place, which made me curious, like, what’s going on here? I then realized he is trying to use this issue to stay in power. Good luck Justin!”

Tariffs are taxes on imported goods paid by the companies that import them. After paying those taxes, businesses can try to either absorb the loss or pass the added costs on to consumers. On Tuesday, Trump hit Canada and Mexico with 25% tariffs on imported goods and added an additional 10% duty on goods from China. All three countries have promised retaliatory measures.

Trump said he told Trudeau more needs to be done to stop the flow of fentanyl, a potent opioid responsible for the majority of U.S. overdose deaths. Most fentanyl that comes in to the U.S. comes through the southern border and is often made with chemicals from China, according to the Drug Enforcement Administration.

“For anyone who is interested, I also told Governor Justin Trudeau of Canada that he largely caused the problems we have with them because of his Weak Border Policies, which allowed tremendous amounts of Fentanyl, and Illegal Aliens, to pour into the United States,” Trump wrote on Truth Social. “These Policies are responsible for the death of many people!”

U.S. stocks increased after the White House announced a one-month tariff reprieve for auto imports from Mexico and Canada.

Last Tuesday, Commerce Secretary Howard Lutnick said Trump would likely compromise with both Canada and Mexico “somewhere in the middle.”

Trump has taken to calling Trudeau “governor” as he seeks to add Canada as the 51st U.S. state.

Trump first put tariffs on the three countries on Feb. 1, but paused the punitive trade measures on Mexico and Canada for 30 days after getting minor border concessions from Trudeau and Mexico President Claudia Sheinbaum.

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