Economy
Prosperity waning due to Ottawa’s misguided population growth policy
From the Fraser Institute
Federal ministers have finally acknowledged that soaring immigration has aggravated the housing affordability crisis and put added pressure on stretched public services.
Last week, in response to growing concern about fast-rising immigration levels, the Trudeau government announced it will cap the number of international student permits over the next two years. Canada’s population increased by 1.2 million last year, following a gain approaching one million in 2022, with these increases almost entirely due to immigration.
The most striking feature of the international migration data is the vertiginous rise in the number of “non-permanent residents” (NPRs). They have accounted for most of the newcomers arriving in Canada since 2020, dwarfing the ranks of new permanent immigrants. NPRs consist of temporary foreign workers and international students (many of whom also work), along with smaller numbers of asylum seekers and refugees, together with some of their families. The stock of NPRs has skyrocketed under the Trudeau government, reaching 2.5 million last year. This means one in every 16 people walking Canada’s streets is a “temporary” immigrant; in some large metro areas, the NPR share is significantly higher.
The federal government’s slapdash handling of immigration has caused problems for other levels of government. The dramatic increase of NPRs occurred without any advance notice, coordination or planning with the provinces, let alone the cities where most newcomers settle. After waving the issue away, federal ministers have finally acknowledged that soaring immigration has aggravated the housing affordability crisis and put added pressure on stretched public services. Remarkably, until last week’s announcement, there had been no federal government limit on student visas and no meaningful oversight of the rapidly expanding international education “industry,” which has largely driven the surge in NPRs.
In addition to the effects on housing demand and public services, Canada’s booming population has contributed to an erosion of prosperity, as measured by the value of economic output on a per-person basis. Nationally, per-person GDP fell by at least two per cent last year and is set for a repeat performance in 2024. Canada is getting poorer, even as our population increases faster than in any other developed country.
Why has the Trudeau government been so keen to turbo-charge population growth? The principal reason cited by federal ministers is to offset the effects of aging. Canada is indeed getting older, like every other developed country. Unfortunately, economic research finds that immigration has relatively little impact on the age structure of the population over time. Nor does it have a measurable influence—either positive or negative—on average incomes, wages or productivity. Simply put, most published academic research suggests that neither population size nor immigration are significantly correlated with higher levels of GDP per person.
It follows that Canada’s current economic development strategy—one premised on strong population growth—is unlikely to increase average incomes or living standards. It’s worth noting that many of the most affluent countries actually have small-to-modest-sized populations. According to the CIA World Factbook, of the 25 richest countries as measured by GDP per person, only one (the United States) is home to more than 20 million people. Among the 30 richest countries, just three meet the 20 million population threshold.
Ultimately, prosperity does not primarily depend on population size. It’s far more important for countries to be productive and innovative, to nurture entrepreneurial wealth creation, to build high-quality workforces, and establish and maintain well-functioning institutions. To improve incomes and living standards, Canadian policymakers should direct their efforts to these areas.
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Business
Premiers fight to lower gas taxes as Trudeau hikes pump costs
From the Canadian Taxpayers Federation
By Jay Goldberg
Thirty-nine hundred dollars – that’s how much the typical two-car Ontario family is spending on gas taxes at the pump this year.
You read that right. That’s not the overall fuel bill. That’s just taxes.
Prime Minister Justin Trudeau keeps increasing your gas bill, while Premier Doug Ford is lowering it.
Ford’s latest gas tax cut extension is music to taxpayers’ ears. Ford’s 6.4 cent per litre gas tax cut, temporarily introduced in July 2022, is here to stay until at least next June.
Because of the cut, a two-car family has saved more than $1,000 so far. And that’s welcome news for Ontario taxpayers, because Trudeau is planning yet another carbon tax hike next April.
Trudeau has raised the overall tax burden at the pumps every April for the past five years. Next spring, he plans to raise gas taxes by another three cents per litre, bringing the overall gas tax burden for Ontarians to almost 60 cents per litre.
While Trudeau keeps hiking costs for taxpayers at the pumps, premiers of all stripes have been stepping up to the plate to blunt the impact of his punitive carbon tax.
Obviously, Ford has stepped up to the plate and has lowered gas taxes. But he’s not alone.
In Manitoba, NDP Premier Wab Kinew fully suspended the province’s 14 cent per litre gas tax for a year. And in Newfoundland, Liberal Premier Andrew Furey cut the gas tax by 8.05 cents per litre for nearly two-and-a-half years.
It’s a tale of two approaches: the Trudeau government keeps making life more expensive at the pumps, while premiers of all stripes are fighting to get costs down.
Families still have to get to work, get the kids to school and make it to hockey practice. And they can’t afford increasingly high gas taxes. Common sense premiers seem to get it, while Ottawa has its head in the clouds.
When Ford announced his gas tax cut extension, he took aim at the Liberal carbon tax mandated by the Trudeau government in Ottawa.
Ford noted the carbon tax is set to rise to 20.9 cents per litre next April, “bumping up the cost of everything once again and it’s absolutely ridiculous.”
“Our government will always fight against it,” Ford said.
But there’s some good news for taxpayers: reprieve may be on the horizon.
Federal Conservative leader Pierre Poilievre’s promises to axe the carbon tax as soon as he takes office.
With a federal election scheduled for next fall, the federal carbon tax’s days may very well be numbered.
Scrapping the carbon tax would make a huge difference in the lives of everyday Canadians.
Right now, the carbon tax costs 17.6 cents per litre. For a family filling up two cars once a week, that’s nearly $24 a week in carbon taxes at the pump.
Scrapping the carbon tax could save families more than $1,200 a year at the pumps. Plus, there would be savings on the cost of home heating, food, and virtually everything else.
While the Trudeau government likes to argue that the carbon tax rebates make up for all these additional costs, the Parliamentary Budget Officer says it’s not so.
The PBO has shown that the typical Ontario family will lose nearly $400 this year due to the carbon tax, even after the rebates.
That’s why premiers like Ford, Kinew and Furey have stepped up to the plate.
Canadians pay far too much at the pumps in taxes. While Trudeau hikes the carbon tax year after year, provincial leaders like Ford are keeping costs down and delivering meaningful relief for struggling families.
Business
Bank of Canada admits ‘significant’ number of citizens would resist digital dollar
From LifeSiteNews
A significant number’ of Canadians are suspicious of government overreach and would resist any measures by the government or central bank to create digital forms of official money.
A Bank of Canada study has found that Canadians are very wary of a government-backed digital currency, concluding that “significant number” of citizens would resist the implementation of such a system.
The study, conducted by the Bank of Canada, found that a “significant number” of Canadians are suspicious of government overreach, and would resist any measures by the government or central bank to create digital forms of official money.
According to results from the BOC’s report titled The Consumer Value Proposition For A Hypothetical Digital Canadian Dollar, “cash remains an important method of payment” for Canadians and “[c]ertain groups may strongly resist a digital dollar if they conflate its launch with the end of cash issuance.”
The BOC noted that not only would a “significant number” of Canadians “reject” digital money, but that for some “mindset segments, their lack of interest in a hypothetical digital Canadian dollar was heavily influenced by perceptions of government overreach.”
As reported by LifeSiteNews in September, the BOC has already said that plans to create a digital “dollar,” also known as a central bank digital currency (CBDC), have been shelved.
The shelving came after the BOC had already forged ahead and filed a trademark for a digital currency, as LifeSiteNews previously reported.
Officials from Canada’s central bank said that a digital currency, or electronic “loonie,” will no longer be considered after years of investigating bringing one to market.
However, that does not mean the BOC is still not researching or exploring other options when it comes to digital money. As noted by researchers, despite there being some “interest” in a “hypothetical digital Canadian dollar,” that “interest does not necessarily translate to adoption.”
“Most participants felt well served by current means of payment,” noted the study, adding, “Individuals who support the issuance of a hypothetical digital Canadian dollar did not imagine themselves using it regularly.”
Those most enthusiastic about a government-backed version of Bitcoin were teenagers and young adults. Those older remained especially skeptical.
“They were skeptical of the need for this new form of money and of its reliability,” read the report, which also noted, “They did not trust that concepts were secure or that their personal information would be kept private.”
Given the results from the report, the bank concluded that “[b]road early adoption” of a digital dollar “is unlikely given that available payment methods meet the needs of most users.”
“Financially vulnerable segments often have the most to gain from this payment method but are most resistant to adoption. Important considerations for appeal and adoption potential include universal merchant acceptance, low costs, easy access, simplified online payments, shared payment features, budgeting tools and customizable security and privacy settings,” it noted.
Digital currencies have been touted as the future by some government officials, but, as LifeSiteNews has reported before, many experts warn that such technology would restrict freedom and could be used as a “control tool” against citizens, similar to China’s pervasive social credit system.
Most Canadians do not want a digital dollar, as previously reported by LifeSiteNews. A public survey launched by the BOC to gauge Canadians’ taste for a digital dollar revealed that an overwhelming majority of citizens want to “leave cash alone” and not proceed with a digital iteration of the national currency.
The BOC last August admitted that the creation of a CBDC is not even necessary, as many people rely on cash to pay for things. The bank concluded that the introduction of a digital currency would only be feasible if consumers demanded its release.
In August, LifeSiteNews also reported that the Conservative Party is looking to gather support for a bill that would outright ban the federal government from ever creating a digital currency and make it so that cash is kept as the preferred means of settling debts.
Conservative leader Pierre Poilievre promised that if he is elected prime minister, he would stop any implementation of a “digital currency” or a compulsory “digital ID” system.
Prominent opponents of CBDCs have been strongly advocating that citizens use cash whenever possible and boycott businesses that do not accept cash payments as a means of slowing down the imposition of CBDCs.
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