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Alberta

Canadians in three provinces will spend roughly the same on debt interest as K-12 education

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From the Fraser Institute

By Grady Munro and Jake Fuss

From 2008/09 to 2023/24, the federal government is projected to have run deficits every single year, with no interruptions. This has resulted in federal net debt (total debt minus financial assets) increasing by $603.6 billion (inflation-adjusted).

For more than a decade, Canadian governments have increasingly relied on borrowed money to fund their excessive spending habits. However, as debt has continued to pile up so have the costs associated with this debt—namely interest costs. A recent study shows that in some of the largest provinces, governments now spend nearly as much or more on debt interest costs than on K-12 education.

Since the 2008/09 financial crisis, governments across Canada have fallen into the habit of utilizing debt to fund their spending habits. For example, consider the federal government.

From 2008/09 to 2023/24, the federal government is projected to have run deficits every single year, with no interruptions. This has resulted in federal net debt (total debt minus financial assets) increasing by $603.6 billion (inflation-adjusted). Conversely, from 1996/97 to 2007/08, the federal government actually lowered its net debt by $348.1 billion (inflation-adjusted). Clearly, there’s been a shift in the government’s approach towards debt accumulation.

This is not simply a federal problem, as provinces have also seen their debt burdens rise as well. Cumulatively, provincial and federal net debt has increased by $1.0 trillion (inflation-adjusted) from 2007/08 to 2023/24.

Government debt carries costs, primarily in the form of the interest payments, which represent money that doesn’t go towards paying down the actual debt amount, nor does it go towards providing government services or tax relief. And since governments must utilize tax revenues to pay interest, taxpayers are ultimately on the hook for servicing government debt.

But how much do Canadians actually pay in debt interest costs?

Using data from the most recent fiscal updates, a new study compares combined (federal and provincial) debt interest costs for residents in three of the largest provinces (OntarioQuebec and Alberta) with what those provinces expect to spend on K-12 education in 2023/24. The study utilizes combined debt interest costs because Canadians are ultimately responsible for interest costs incurred by both the federal government and the province in which they live. The following chart summarizes the comparisons from the study.

As is clear from the chart, combined interest costs for residents in these provinces are nearly as much or more than their province expects to spend on K-12 education in 2023/24. Specifically, combined interest costs are $31.5 billion for Ontarians, which is only $3.2 billion less than the province will spend on K-12 education in 2023/24. Combined interest costs for Quebecers ($20.3 billion) will actually exceed the $19.9 billion the province will devote towards K-12 education. And combined interest costs for Albertans are only slightly lower than the $8.9 billion that will be spent on K-12 education.

In other words, taxpayers in Ontario, Quebec and Alberta are paying nearly as much or more to service federal and provincial government debt than they are paying to fund K-12 education in their province. This budget season, it’s important to remember the costs associated with growing government debt.

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Alberta

Ford and Trudeau are playing checkers. Trump and Smith are playing chess

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By Dan McTeague

 

Ford’s calls for national unity – “We need to stand united as Canadians!” – in context feels like an endorsement of fellow Electric Vehicle fanatic Trudeau. And you do wonder if that issue has something to do with it. After all, the two have worked together to pump billions in taxpayer dollars into the EV industry.

There’s no doubt about it: Donald Trump’s threat of a blanket 25% tariff on Canadian goods (to be established if the Canadian government fails to take sufficient action to combat drug trafficking and illegal crossings over our southern border) would be catastrophic for our nation’s economy. More than $3 billion in goods move between the U.S. and Canada on a daily basis. If enacted, the Trump tariff would likely result in a full-blown recession.

It falls upon Canada’s leaders to prevent that from happening. That’s why Justin Trudeau flew to Florida two weeks ago to point out to the president-elect that the trade relationship between our countries is mutually beneficial.

This is true, but Trudeau isn’t the best person to make that case to Trump, since he has been trashing the once and future president, and his supporters, both in public and private, for years. He did so again at an appearance just the other day, in which he implied that American voters were sexist for once again failing to elect the nation’s first female president, and said that Trump’s election amounted to an assault on women’s rights.

Consequently, the meeting with Trump didn’t go well.

But Trudeau isn’t Canada’s only politician, and in recent days we’ve seen some contrasting approaches to this serious matter from our provincial leaders.

First up was Doug Ford, who followed up a phone call with Trudeau earlier this week by saying that Canadians have to prepare for a trade war. “Folks, this is coming, it’s not ‘if,’ it is — it’s coming… and we need to be prepared.”

Ford said that he’s working with Liberal Finance Minister Chrystia Freeland to put together a retaliatory tariff list. Spokesmen for his government floated the idea of banning the LCBO from buying American alcohol, and restricting the export of critical minerals needed for electric vehicle batteries (I’m sure Trump is terrified about that last one).

But Ford’s most dramatic threat was his announcement that Ontario is prepared to shut down energy exports to the U.S., specifically to Michigan, New York, Wisconsin, and Minnesota, if Trump follows through with his plan. “We’re sending a message to the U.S. You come and attack Ontario, you attack the livelihoods of Ontario and Canadians, we’re going to use every tool in our toolbox to defend Ontarians and Canadians across the border,” Ford said.

Now, unfortunately, all of this chest-thumping rings hollow. Ontario does almost $500 billion per year in trade with the U.S., and the province’s supply chains are highly integrated with America’s. The idea of just cutting off the power, as if you could just flip a switch, is actually impossible. It’s a bluff, and Trump has already called him on it. When told about Ford’s threat by a reporter this week, Trump replied “That’s okay if he does that. That’s fine.”

And Ford’s calls for national unity – “We need to stand united as Canadians!” – in context feels like an endorsement of fellow Electric Vehicle fanatic Trudeau. And you do wonder if that issue has something to do with it. After all, the two have worked together to pump billions in taxpayer dollars into the EV industry. Just over the past year Ford and Trudeau have been seen side by side announcing their $5 billion commitment to Honda, or their $28.2 billion in subsidies for new Stellantis and Volkswagen electric vehicle battery plants.

Their assumption was that the U.S. would be a major market for Canadian EVs. Remember that “vehicles are the second largest Canadian export by value, at $51 billion in 2023 of which 93% was exported to the U.S.,”according to the Canadian Vehicle Manufacturers Association, and “Auto is Ontario’s top export at 28.9% of all exports (2023).”

But Trump ran on abolishing the Biden administration’s de facto EV mandate. Now that he’s back in the White House, the market for those EVs that Trudeau and Ford invested in so heavily is going to be much softer. Perhaps they’d like to be able to blame Trump’s tariffs for the coming downturn rather than their own misjudgment.

In any event, Ford’s tactic stands in stark contrast to the response from Alberta, Canada’s true energy superpower. Premier Danielle Smith made it clear that her province “will not support cutting off our Alberta energy exports to the U.S., nor will we support a tariff war with our largest trading partner and closest ally.”

Smith spoke about this topic at length at an event announcing a new $29-million border patrol team charged with combatting drug trafficking, at which said that Trudeau’s criticisms of the president-elect were, “not helpful.” Her deputy premier Mike Ellis was quoted as saying, “The concerns that president-elect Trump has expressed regarding fentanyl are, quite frankly, the same concerns that I and the premier have had.” Smith and Ellis also criticized Ottawa’s progressively lenient approach to drug crimes.

(For what it’s worth, a recent Léger poll found that “Just 29 per cent of [Canadians] believe Trump’s concerns about illegal immigration and drug trafficking from Canada to the U.S. are unwarranted.” Perhaps that’s why some recent polls have found that Trudeau is currently less popular in Canada than Trump at the moment.)

Smith said that Trudeau’s criticisms of the president-elect were, “not helpful.” And on X/Twitter she said, “Now is the time to… reach out to our friends and allies in the U.S. to remind them just how much Americans and Canadians mutually benefit from our trade relationship – and what we can do to grow that partnership further,” adding, “Tariffs just hurt Americans and Canadians on both sides of the border. Let’s make sure they don’t happen.”

This is exactly the right approach. Smith knows there is a lot at stake in this fight, and is not willing to step into the ring in a fight that Canada simply can’t win, and will cause a great deal of hardship for all involved along the way.

While Trudeau indulges in virtue signaling and Ford in sabre rattling, Danielle Smith is engaging in true statesmanship. That’s something that is in short supply in our country these days.

As I’ve written before, Trump is playing chess while Justin Trudeau and Doug Ford are playing checkers. They should take note of Smith’s strategy. Honey will attract more than vinegar, and if the long history of our two countries tell us anything, it’s that diplomacy is more effective than idle threats.

Dan McTeague is President of Canadians for Affordable Energy.

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Alberta

Your towing rights! AMA unveils measures to help fight predatory towing

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From the Alberta Motor Association

Know Before the Tow: Towing Rights in Alberta

Predatory towing is a growing concern in major cities across the province. The Alberta Motor
Association (AMA), in partnership with the Calgary Police Service and Calgary Fire Department,
wants to ensure Albertans are not only aware of this emerging issue but also know how to stop
it.

Today, AMA launches Know Before the Tow—a new, provincewide awareness campaign that
empowers Albertans with the knowledge needed to stay confident and in control when faced with
a tow scam. The campaign features a list of five key towing rights that every Alberta driver should
know:

1. You have the right to refuse unsolicited towing services.
2. You have the right to choose who tows your vehicle, and where, unless
otherwise directed by police.
3. You have the right to access your vehicle to retrieve personal items during a
storage facility’s business hours.
4. You have the right to ask if the towing company receives a kickback for taking
your vehicle to a particular storage facility or repair shop.
5. You have the right to a quote prior to service, and an itemized invoice prior to
making payment.

“Being in a collision or broken down at the roadside is stressful enough; the last thing any Albertan
needs is high pressure from an unscrupulous tower,” says Jeff Kasbrick, Vice-President,
Advocacy and Operations, AMA. “These towing rights are clear and remind every Albertan that
they’re in the driver’s seat when it comes to who they choose to tow their vehicle.”

Edmonton and Calgary in particular are seeing increasing reports of predatory towing. Unethical
operators will arrive at a collision or breakdown scene uninvited, create a false sense of urgency
to remove the vehicle, and ultimately leave drivers facing huge fees.

Starting today, Albertans can visit ama.ab.ca/KnowBeforeTheTow to download a digital copy of
their towing rights, helping them feel confident if faced with a tow scam. And soon, all AMA centres
will offer free print versions, which are small enough to tuck in a glovebox.

“Alberta’s towing industry is still highly reputable, with the vast majority of operators committed
to fair and professional service. In fact, AMA and our roadside assistance network is proud to
represent 80% of all private-passenger tows in the province, so our members can be confident
that we’ll always protect them—just as we have for nearly 100 years,” says Kasbrick.

“By knowing your rights and choosing trusted providers like AMA, you can avoid unnecessary
stress, costs, and uncertainty. Because the road to recovery after a collision shouldn’t have to
include fighting for your vehicle.”

Sergeant Brad Norman, Calgary Police Service Traffic Section, says law enforcement continues
to work diligently with first responders and community partners like AMA to put the brakes on
predatory towers, who “are showing up at collision sites and pressuring overwhelmed and
frightened victims into paying high towing rates.”

“Our priority is to ensure the safety of collision victims, the public, and first responders at
collision sites. Part of this effort is educating motorists about their rights so that they Know
Before the Tow that they can say no to unsolicited towing services and choose a reputable
tower of their choice instead,” says Norman. “No one deserves to be taken advantage of after
being involved in a collision.”

To learn more, and to view an expanded version of Alberta towing rights, visit
ama.ab.ca/KnowBeforeTheTow

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