Canadians should expect even more spending in federal fall economic statement

The Trudeau government will soon release its fall economic statement. Though technically intended to be an update on the fiscal plan in this year’s budget, in recent years the fall economic statement has more closely resembled a “mini-budget” that unveils new (and often significant) spending commitments and initiatives.

Let’s look at the data.

The chart below includes projections of annual federal program spending from a series of federal budgets and updates, beginning with the 2022 budget and ending with the latest 2024 budget. Program spending equals total spending minus debt interest costs, and represents discretionary spending by the federal government.

Clearly, there’s a trend that with every consecutive budget and fiscal update the Trudeau government revises spending estimates upwards. Take the last two fiscal years, 2023/24 and 2024/25, for example. Budget 2022 projected annual program spending of $436.5 billion for the 2023/24 fiscal year. Yet the fall economic statement released just months later revised that spending estimate up to $449.8 billion, and later releases showed even higher spending.

The issue is even more stark when examining spending projections for the current fiscal year. Budget 2022 projected annual spending of $441.6 billion in 2024/25. Since then, every subsequent fiscal release has revised that estimate higher and higher, to the point that Budget 2024 estimates program spending of $483.6 billion for this year—representing a $42.0 billion increase from the projections only two years ago.

Meanwhile, as spending estimates are revised upwards, plans to reduce the federal deficit are consistently pushed off into later years.

For example, the 2022 fall economic statement projected a deficit of $25.4 billion for the 2024/25 fiscal year, and declining deficits in the years to come, before reaching an eventual surplus of $4.5 billion in 2027/28. However, subsequent budgets and fiscal updates again revised those estimates. The latest budget projects a deficit of $39.8 billion in 2024/25 that will decline to a $26.8 billion deficit by 2027/28. In other words, though budgets and fiscal updates have consistently projected declining deficits between 2024/25 and 2027/28, each subsequent document has produced larger deficits throughout the fiscal outlook and pushed the timeline for balanced budgets further into the future.

These data illustrate the Trudeau government’s lack of accountability to its own fiscal plans. Though the unpredictable nature of forecasting means the government is unlikely to exactly meet future projections, it’s still reasonable to expect it will roughly follow its own fiscal plans. However, time and time again Canadians have been sold a certain plan, only to have it change dramatically mere months later due to the government’s unwillingness to restrain spending. We shouldn’t expect the upcoming fall economic statement to be any different.

Authors:

Jake Fuss and Grady Munro

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Ontario suspends electricity surcharge after Trump doubles tariffs

Published on March 11, 2025

Todayville

MxM News

Quick Hit:

Ontario Premier Doug Ford announced Tuesday that the province is suspending its 25% surcharge on electricity exports to the U.S. following President Trump’s decision to double tariffs on Canadian aluminum and steel.

Key Details:

Ford confirmed Ontario’s suspension of the electricity surcharge after Trump’s tariff escalation put Canadian industries under pressure.
The Ontario premier said he and Lutnick would meet with U.S. Trade Representative Jamieson Greer on Thursday in Washington to discuss a “renewed USMCA.”
In a statement on X, Ford acknowledged the move, stating, “In response, Ontario agreed to suspend its 25 percent surcharge on exports of electricity to Michigan, New York and Minnesota.”

Diving Deeper:

Just hours after President Trump doubled tariffs on Canadian aluminum and steel, Ontario Premier Doug Ford announced Tuesday that the province will suspend its 25% electricity surcharge on power exports to three U.S. states. The policy reversal comes as Ontario seeks to avoid further economic retaliation from Washington.

Trump’s latest round of tariffs—upping duties on Canadian steel and aluminum to 50%—were issued in direct response to Ontario’s electricity tax on U.S. consumers in Michigan, New York, and Minnesota. The move threatened to escalate an already tense trade standoff, with Trump warning of additional penalties targeting Canada’s auto sector if broader trade disputes weren’t addressed.

Ford took to X to confirm Ontario’s decision to pull back on the surcharge, saying he had a “productive conversation” with Commerce Secretary Howard Lutnick. The two will meet in Washington on Thursday alongside U.S. Trade Representative Jamieson Greer to discuss a possible “renewed USMCA,” signaling a potential shift in trade relations between the two nations.

“In response, Ontario agreed to suspend its 25 percent surcharge on exports of electricity to Michigan, New York and Minnesota,” Ford and Lutnick stated in a joint announcement.

The suspension of Ontario’s surcharge marks a significant concession in the ongoing trade dispute, which has sent shockwaves through financial markets and rattled Canadian industries. Trump had labeled Ontario’s surcharge an “abusive threat” and pledged to take decisive action to ensure American energy security.

Beyond the immediate tariff battle, Ford’s willingness to engage in talks about a “renewed USMCA” could indicate Canada’s growing concern over Trump’s broader trade agenda. The U.S.-Mexico-Canada Agreement, originally signed during Trump’s first term, remains a key economic framework, but Trump has long criticized Canada’s tariffs on American dairy and its limited contributions to North American security.

While Ontario’s suspension of the electricity surcharge could ease tensions in the short term, the broader U.S.-Canada trade relationship remains in flux as Trump continues pushing for more favorable terms for American industries.

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Trump doubles tariffs on Canadian steel and aluminum imports

Published on March 11, 2025

Todayville

MxM News

Quick Hit:

President Trump announced Tuesday an additional 25% tariff on Canadian steel and aluminum imports, raising the total levy to 50%, in retaliation for Ontario’s decision to charge Americans in three border states 25% more for electricity.

Key Details:

Trump declared Ontario’s electricity surcharge on New York, Michigan, and Minnesota as an “abusive threat,” vowing to declare a National Emergency to counteract its impact.
The president threatened to impose a steep tariff on Canadian automobile imports by April 2nd if other longstanding trade disputes aren’t resolved, warning that it could “permanently shut down the automobile manufacturing business in Canada.”
Trump also called out Canada’s minimal contributions to military security, arguing that the U.S. subsidizes the country’s defense by more than $200 billion a year, saying, “This cannot continue.”

Diving Deeper:

President Trump took direct aim at Canada on Tuesday, unveiling an aggressive tariff hike on steel and aluminum imports from America’s northern neighbor. The move raises the current duty by an additional 25%, bringing the total to 50%, and follows Ontario Premier Doug Ford’s controversial decision to slap a 25% surcharge on electricity exports to U.S. border states.

Trump, in a post on Truth Social, blasted Ontario’s move as an “abusive threat” to American energy consumers and promised swift action. “I will shortly be declaring a National Emergency on Electricity within the threatened area,” Trump wrote, saying this would enable the U.S. to “quickly do what has to be done” to counteract Canada’s pricing.

But the trade battle didn’t stop there. Trump also called on Canada to eliminate tariffs of up to 390% on American dairy exports, a policy the president previously fought against during his first term. If Canada fails to act, Trump warned he would ramp up the pressure by imposing new tariffs on Canadian car exports, a move he said would effectively cripple the country’s auto industry.

“If other egregious, long-time Tariffs are not likewise dropped by Canada, I will substantially increase, on April 2nd, the Tariffs on Cars coming into the U.S., which will, essentially, permanently shut down the automobile manufacturing business in Canada,” Trump warned.

In addition to the latest tariffs, Trump took a broader swipe at Canada’s role in global security, reiterating a long-held grievance that the U.S. shoulders an unfair burden for its northern ally’s defense. “Canada pays very little for National Security, relying on the United States for military protection,” Trump wrote. “We are subsidizing Canada to the tune of more than 200 Billion Dollars a year. WHY??? This cannot continue.”

Trump then again floated annexing Canada into the United States to eliminate trade barriers and lower Canadian taxes. “The only thing that makes sense is for Canada to become our cherished Fifty-First State,” he wrote, claiming this would bring economic relief and greater security. “And your brilliant anthem, ‘O Canada,’ will continue to play, but now representing a GREAT and POWERFUL STATE within the greatest Nation that the World has ever seen!”