From the Fraser Institute

By Jake Fuss and Grady Munro

Apparently, despite a few days of conflicting statements from the government, the Carney government now plans to table a budget in the fall. If the new prime minister wants to reduce Ottawa’s massive debt burden, which Canadians ultimately bear, he must begin to work now to reduce spending.

According to the federal government’s latest projections, from 2014/15 to 2024/25 total federal debt is expected to double from $1.1 trillion to a projected $2.2 trillion. That means $13,699 in new federal debt for every Canadian (after adjusting for inflation). In addition, from 2020 to 2023, the Trudeau government recorded the four highest years of total federal debt per person (inflation-adjusted) in Canadian history.

How did this happen?

From 2018 to 2023, the government recorded the six highest levels of program spending (inflation-adjusted, on a per-person basis) in Canadian history—even after excluding emergency spending during COVID. Consequently, in 2024/25 Ottawa will run its tenth consecutive budget deficit since 2014/15.

Of course, Canadians bear the burden of this free-spending approach. For example, over the last several years federal debt interest payments have more than doubled to an expected $53.7 billion this year. That’s more than the government plans to spend on health-care transfers to the provinces. And it’s money unavailable for programs including social services.

In the longer term, government debt accumulation can limit economic growth by pushing up interest rates. Why? Because governments compete with individuals, families and businesses for the savings available for borrowing, and this competition puts upward pressure on interest rates. Higher interest rates deter private investment in the Canadian economy—a necessary ingredient for economic growth—and hurt Canadian living standards.

Given these costs, the Carney government should take a new approach to fiscal policy and begin reducing Ottawa’s mountain of debt.

According to both history and research, the most effective and least economically harmful way to achieve this is to reduce government spending and balance the budget, as opposed to raising taxes. While this approach requires tough decisions, which may be politically unpopular in some quarters, worthwhile goals are rarely easy and the long-term gain will exceed the short-term pain. Indeed, a recent study by Canadian economist Bev Dahlby found the long-term economic benefits of a 12-percentage point reduction in debt (as a share of GDP) substantially outweighs the short-term costs.

Unfortunately, while Canadians must wait until the fall for a federal budget, the Carney government’s election platform promises to add—not subtract—from Ottawa’s mountain of debt and from 2025/26 to 2028/29 run annual deficits every year of at least $47.8 billion. In total, these planned deficits represent $224.8 billion in new government debt over the next four years, and there’s currently no plan to balance the budget. This represents a continuation of the Trudeau government’s approach to rack up debt and behave irresponsibly with federal finances.

With a new government on Parliament Hill, now is the time for federal policymakers to pursue the long-ignored imperative of reducing government debt. Clearly, if the Carney government wants to prioritize debt reduction, it must rethink its fiscal plan and avoid repeating the same mistakes of its predecessor.

Jake Fuss

Director, Fiscal Studies, Fraser Institute

Grady Munro

Policy Analyst, Fraser Institute

This article supplied by Troy Media.

By Lisa Baiton

Canada has the resources to lead globally in energy, but outdated rules and investment barriers are holding us back

Canada stands at a pivotal moment. A new federal government offers an opportunity to rejuvenate the economy and rethink our approach to natural
resource development.

Prime Minister Mark Carney’s plan to build Canada into the best-performing economy in the Group of Seven (G7) is achievable, as is his ambition to build from this country’s energy resource-rich foundation. This aligns with the oil and natural gas industry’s calls to play to our strengths in responsible energy development and exports. To succeed, we need a clear, practical strategy that reflects the realities of investment capital in today’s
unpredictable global economy.

Canada has all the ingredients to become the next global energy superpower. What’s missing is the right recipe. Over the past decade, a layering of policies has reduced investor confidence and made Canadian projects less attractive than those in other countries. Billions in capital have shifted to places like the United States, Brazil and Norway, where regulatory processes are clearer, faster and more investor-friendly.

It’s time to rebuild investor confidence and demonstrate that Canada is open for business. That begins with overhauling the regulatory and fiscal frameworks that govern major energy projects. Current regulations are too often unpredictable, excessively long and vulnerable to legal challenges. For example, some Canadian energy projects can take seven to 10 years to gain approval, compared to three to five years in competing jurisdictions. Approval timelines must be firm, reliable and competitive. Projects of national significance need clear, coordinated assessments that uphold environmental integrity while respecting the jurisdictional roles of provincial governments and Indigenous communities. And we must take the politics out of the regulatory process.

It also means rethinking carbon policy. The current system—layered with federal and provincial rules and complex compliance requirements— is inefficient and uncertain. It needs to be reviewed and reformed, together with provinces and industry, to ensure it is competitive with policies in other top oil- and natural gas-producing nations. A model tailored to regional realities and industrial needs, and one that respects provincial jurisdiction, could restore both flexibility and investor confidence. A national policy should drive investment into emissions reduction, not through
production caps, but by simplifying regulation, creating an attractive fiscal environment and protecting export industries while enabling innovation and growth

Let’s be clear: this is not a call to abandon climate goals or environmental commitments. Canadians care deeply about the environment. But they also care about job security, affordable living and Canada’s place in a rapidly evolving global economy. These values are not in conflict. In fact, the Canadian way—our high standards, our innovation, our sense of fairness—can show the world a model of responsible oil and natural gas development.

We must also ensure Indigenous communities are true partners in growth. Expanding Indigenous loan guarantees at scale will help create infrastructure ownership opportunities that generate long-term prosperity. These guarantees enable First Nations to access affordable financing to invest in projects like pipelines and power generation. But such programs will only succeed if Canada is seen as a competitive place to invest. That foundation must come first.

The mood across Canada has shifted. There is broad public support for oil and natural gas development, not just because of the jobs and revenue, but because Canadians understand the role energy plays in our national and economic sovereignty. Recent polling shows most Canadians believe energy development and climate action can go hand in hand, especially when projects support economic growth.

Amid growing instability in the United States—Canada’s biggest competitor for capital—we have a chance to stand out as a stable and trusted economic partner. But this window of opportunity won’t stay open for long.

We must act decisively. That includes eliminating unnecessary barriers such as production caps and embracing investment in technologies that reduce emissions while growing output.

Canadians are ready. Industry is ready. The time has come to build.

Lisa Baiton is President and CEO of the Canadian Association of Petroleum Producers.

Troy Media empowers Canadian community news outlets by providing independent, insightful analysis and commentary. Our mission is to support local media in helping Canadians stay informed and engaged by delivering reliable content that strengthens community connections and deepens understanding across the country