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Federal government clearly misstates its economic record

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4 minute read

From the Fraser Institute

By Jock Finlayson

“since 2015 Canada has posted some of the weakest economic growth numbers, measured on a per-person basis, in half a century”

“Denominator blindness” refers to situations where people fail to put what seem to be big numbers into proper context. The affliction is especially common among governments seeking to justify their spending and other policy decisions. In Canada, denominator blindness has become a central feature of the narratives peddled by many politicians.

For example, the Trudeau government’s recent economic update, which includes a forward by Finance Minister Chrystia Freeland where she notes that the International Monetary Fund expects Canada to have “the strongest economic growth in the G7 next year.” She also insists her government is fostering economic growth that “creates middle class jobs, raises incomes, and makes middle class communities more prosperous.”

Both claims lack context and misstate the government’s economic record.

Prosperity is measured using both a numerator, typically the amount of output the economy produces in a year, and a denominator, the size of the population. A larger population means the economic pie must be divided into more slices to estimate how much “output” is available to the average resident. With a rapidly expanding population, the economy must generate a lot more output merely to stop the individual pie slices from shrinking.

Minister Freeland is correct that Canada’s economy has been growing, both since the worst of the COVID shock in late-2020/early-2021 and over the period when the Trudeau government has been in power. But she ignores the bigger picture, which shows two important things.

First, since 2015 Canada has posted some of the weakest economic growth numbers, measured on a per-person basis, in half a century. The pattern of feeble economic growth was evident before the onset of COVID.

Second, Canada is among the few advanced economies where output or gross domestic product (GDP) per person in 2023 has still not returned to pre-pandemic levels. In part, this reflects surging population growth, which affects the denominator that helps determine whether economic growth is producing gains in average incomes and living standards. In Canada’s case, modest economic growth combined with a skyrocketing population has resulted in a multi-year decline in per-person income and erosion of overall prosperity. Adjusted for inflation, GDP per person is still 2 per cent lower than in 2019.

Denominator blindness also characterizes recent attempts by the federal, Ontario and Quebec governments to explain why they’re allocating up to $50 billion in subsidies and tax incentives to lure a handful of electric vehicle battery manufacturers to Canada. The politicians making these decisions point to the several thousand jobs the EV manufacturing facilities will support once they are fully operational. But they won’t discuss how this fits within the larger job market.

Total employment in Canada is 20.1 million, with almost 1.8 million jobs in manufacturing. The vast sums being thrown at EV battery manufacturers will have essentially no impact on the aggregate job numbers and barely make a ripple, even in the manufacturing sector. Moreover, not all the promised EV jobs will be “new” positions—many workers attracted to the EV industry will likely be drawn from other businesses, worsening skill shortages that are plaguing Canadian manufacturers.

Perhaps aspiring politicians should be required to study the basic arithmetic of fractions before they run for office.

Business

Trump confirms 35% tariff on Canada, warns more could come

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Quick Hit:

President Trump on Thursday confirmed a sweeping new 35% tariff on Canadian imports starting August 1, citing Canada’s failure to curb fentanyl trafficking and retaliatory trade actions.

Key Details:

  • In a letter to Canadian Prime Minister Mark Carney, Trump said the new 35% levy is in response to Canada’s “financial retaliation” and its inability to stop fentanyl from reaching the U.S.
  • Trump emphasized that Canadian businesses that relocate manufacturing to the U.S. will be exempt and promised expedited approvals for such moves.
  • The administration has already notified 23 countries of impending tariffs following the expiration of a 90-day negotiation window under Trump’s “Liberation Day” trade policy.

Diving Deeper:

President Trump escalated his tariff strategy on Thursday, formally announcing a 35% duty on all Canadian imports effective August 1. The move follows what Trump described as a breakdown in trade cooperation and a failure by Canada to address its role in the U.S. fentanyl crisis.

“It is a Great Honor for me to send you this letter in that it demonstrates the strength and commitment of our Trading Relationship,” Trump wrote to Prime Minister Mark Carney. He added that the tariff response comes after Canada “financially retaliated” against the U.S. rather than working to resolve the flow of fentanyl across the northern border.

Trump’s letter made clear the tariff will apply broadly, separate from any existing sector-specific levies, and included a warning that “goods transshipped to evade this higher Tariff will be subject to that higher Tariff.” The president also hinted that further retaliation from Canada could push rates even higher.

However, Trump left the door open for possible revisions. “If Canada works with me to stop the flow of Fentanyl, we will, perhaps, consider an adjustment to this letter,” he said, adding that tariffs “may be modified, upward or downward, depending on our relationship.”

Canadian companies that move operations to the U.S. would be exempt, Trump said, noting his administration “will do everything possible to get approvals quickly, professionally, and routinely — In other words, in a matter of weeks.”

The U.S. traded over $762 billion in goods with Canada in 2024, with a trade deficit of $63.3 billion, a figure Trump called a “major threat” to both the economy and national security.

Speaking with NBC News on Thursday, Trump suggested even broader tariff hikes are coming, floating the idea of a 15% or 20% blanket rate on all imports. “We’re just going to say all of the remaining countries are going to pay,” he told Meet the Press moderator Kristen Welker, adding that “the tariffs have been very well-received” and noting that the stock market had hit new highs that day.

The Canadian announcement is part of a broader global tariff rollout. In recent days, Trump has notified at least 23 countries of new levies and revealed a separate 50% tariff on copper imports.

“Not everybody has to get a letter,” Trump said when asked if other leaders would be formally notified. “You know that. We’re just setting our tariffs.”

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Business

Trump slaps Brazil with tariffs over social media censorship

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From LifeSiteNews

By Dan Frieth

In his letter dated July 9, 2025, addressed to President Luiz Inácio Lula da Silva, Trump ties new U.S. trade measures directly to Brazilian censorship.

U.S. President Donald Trump has launched a fierce rebuke of Brazil’s moves to silence American-run social media platforms, particularly Rumble and X.

In his letter dated July 9, 2025, addressed to President Luiz Inácio Lula da Silva, Trump ties new U.S. trade measures directly to Brazilian censorship.

He calls attention to “SECRET and UNLAWFUL Censorship Orders to U.S. Social Media platforms,” pointing out that Brazil’s Supreme Court has been “threatening them with Millions of Dollars in Fines and Eviction from the Brazilian Social Media market.”

A formal letter dated July 9, 2025, from The White House addressed to His Excellency Luiz Inacio Lula da Silva, President of the Federative Republic of Brazil, discussing opposition to the trial of former President Jair Bolsonaro and announcing a 50% tariff on Brazilian products entering the United States due to alleged unfair trade practices and censorship issues, with a note on efforts to ease trade restrictions if Brazil changes certain policies.

A typed letter from Donald J. Trump, President of the United States of America, discussing tariffs related to Brazil, digital trade issues, and a Section 301 investigation, signed with his signature.

Trump warns that these actions are “due in part to Brazil’s insidious attacks on Free Elections, and the fundamental Free Speech Rights of Americans,” and states: “starting on August 1, 2025, we will charge Brazil a Tariff of 50% on any and all Brazilian products sent into the United States, separate from all Sectoral Tariffs.” He also adds that “Goods transshipped to evade this 50% Tariff will be subject to that higher Tariff.”

Brazil’s crackdown has targeted Rumble after it refused to comply with orders to block the account of Allan dos Santos, a Brazilian streamer living in the United States.

On February 21, 2025, Justice Alexandre de Moraes ordered Rumble’s suspension for non‑compliance, saying it failed “to comply with court orders.”

Earlier, from August to October 2024, Moraes had similarly ordered a nationwide block on X.

The court directed ISPs to suspend access and imposed fines after the platform refused to designate a legal representative and remove certain accounts.

Elon Musk responded: “Free speech is the bedrock of democracy and an unelected pseudo‑judge in Brazil is destroying it for political purposes.”

By linking censorship actions, particularly those targeting Rumble and X, to U.S. trade policy, Trump’s letter asserts that Brazil’s judiciary has moved into the arena of foreign policy and economic consequences.

The tariffs, he makes clear, are meant, at least in part, as a response to Brazil’s suppression of American free speech.

Trump’s decision to impose tariffs on Brazil for censoring American platforms may also serve as a clear signal to the European Union, which is advancing similar regulatory efforts under the guise of “disinformation” and “online safety.”

With the EU’s Digital Services Act and proposed “hate speech” legislation expanding government authority over content moderation, American companies face mounting pressure to comply with vague and sweeping takedown demands.

By framing censorship as a violation of U.S. free speech rights and linking it to trade consequences, Trump is effectively warning that any foreign attempt to suppress American voices or platforms could trigger similar economic retaliation.

Reprinted with permission from Reclaim The Net.

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