Economy
Government services faltering despite Ottawa’s tax hikes
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From the Fraser Institute
By Matthew Lau
Compare this growth of almost 50 per cent to the growth rate of private-sector employment—from 2015 to 2023, combined growth for the private sector and self-employment was about 11 per cent.
According to a study published by the Fraser Institute, 44.6 per cent of the average family’s income will be consumed by taxes of all kinds in 2024. Thus June 13—which is 44.6 per cent of the way through the year—was “Tax Freedom Day.” In other words, on average, the work done and income earned from January 1 to June 12 is consumed by government. This tax bill, most Canadians believe, is too high, but alas a tax-happy federal government is unlikely to provide relief.
Indeed, the Trudeau government recently made another effort to push Tax Freedom Day further back into the year with its increase to capital gains taxes, adding to its long record of tax increases since coming to office in 2015. The list of tax hikes includes a new top income tax bracket in 2016, the carbon tax first imposed in 2019 and increased every year since, five consecutive annual Canada Pension Plan tax hikes from 2020 to 2024, special taxation of financial institutions imposed in 2022, continued threats of special taxation of grocery stores, and announced plans for a tax on share buybacks.
With such enthusiasm for tax hikes, it cannot be a surprise that since the Trudeau government took office in 2015, the number of employees at the Canada Revenue Agency increased from around 40,000 to almost 60,000 by 2023. Compare this growth of almost 50 per cent to the growth rate of private-sector employment—from 2015 to 2023, combined growth for the private sector and self-employment was about 11 per cent.
But alas, all these new taxes and government growth have not yielded positive results. From the third quarter of 2015 to the first quarter of 2024, growth in real GDP per-person (a common indicator of living standards) was less than 1 per cent cumulatively versus nearly 16 per cent in the United States. The productivity improvements that deliver sustainable economic growth rely on business investment, but that has badly stalled in Canada, too. Since the third quarter of 2015, real business investment in machinery, equipment and non-residential structures is down about 19 per cent on a per-person basis.
Nor have Canadians received improved government services as a result of higher taxes.
Health access is getting worse, with wait times for medical care continuing to increase. And even the Liberals have effectively admitted their national child-care program, which they began implementing in 2021, has created widespread shortages.
Similarly, on two core federal government functions—public safety and national defence—even as Canadians pay new and higher taxes, outcomes are dismal. Crime is rising and Canada’s military readiness is “dangerously inefficient.” In fact, at the end of last year the commander of the Royal Canadian Navy said it “faces some very serious challenges right now that could mean we fail to meet our force posture and readiness commitments in 2024 and beyond” and that “the air force and the army are facing similar challenges.”
And Canada’s passport offices continue to be in a state of disarray and the federal government has missed its own deadline for allowing Canadians to renew passports online.
Polling data show Canadians believe they pay too much tax. No one should be surprised. The Trudeau government’s new and higher taxes have contributed significantly to the country’s stagnating economy and declining business confidence, and have been accompanied by deteriorating government services across the board. Raising taxes won’t make things any better. Cutting taxes would.
Author:
Alberta
Open letter to Ottawa from Alberta strongly urging National Economic Corridor
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Canada’s wealth is based on its success as a trading nation. Canada is blessed with immense resources spread across a vast country. It has succeeded as a small, open economy with an enviable standard of living that has been able to provide what the world needs.
Canada has been stuck in a situation where it cannot complete nation‑building projects like the Canadian Pacific Railway that was completed in 1885, or the Trans Canada Highway that was completed in the 1960s. With the uncertainty of U.S. tariffs looming over our country and province, Canada needs to take bold action to revitalize the productivity and competitiveness of its economy – going east to west and not always relying on north-south trade. There’s no better time than right now to politically de-risk these projects.
A lack of leadership from the federal government has led to the following:
- Inadequate federal funding for trade infrastructure.
- A lack of investment is stifling the infrastructure capacity we need to diversify our exports. This is despite federally commissioned reports like the 2022 report by the National Supply Chain Task Force indicating the investment need will be trillions over the next 50 years.
- Federal red tape, like the Impact Assessment Act.
- Burdensome regulation has added major costs and significant delays to projects, like the Roberts Bank Terminal 2 project, a proposed container facility at Vancouver, which spent more than a decade under federal review.
- Opaque funding programs, like the National Trade Corridors Fund (NTCF).
- Which offers a pattern of unclear criteria for decisions and lack of response. This program has not funded any provincial highway projects in Alberta, despite the many applications put forward by the Government of Alberta. In fact, we’ve gone nearly 3 years without decisions on some project applications.
- Ineffective policies that limit economic activity.
- Measures that pit environmental and economic objectives in stark opposition to one another instead of seeking innovative win-win solutions hinder Canada’s overall productivity and investment climate. One example is the moratorium on shipping crude through northern B.C. waters, which effectively ended Enbridge’s Northern Gateway proposal and has limited Alberta’s ability to ship its oil to Asian markets.
In a federal leadership vacuum, Alberta has worked to advance economic corridors across Canada. In April 2023, Alberta, Saskatchewan and Manitoba signed an agreement to collaborate on joint infrastructure networks meant to boost trade and economic growth across the Prairies. Alberta also signed a similar economic corridor agreement with the Northwest Territories in July 2024. Additionally, Alberta would like to see an agreement among all 7 western provinces and territories, and eventually the entire country, to collaborate on economic corridors.
Through our collaboration with neighbouring jurisdictions, we will spur the development of economic corridors by reducing regulatory delays and attracting investment. We recognize the importance of working with Indigenous communities on the development of major infrastructure projects, which will be key to our success in these endeavours.
However, provinces and territories cannot do this alone. The federal government must play its part to advance our country’s economic corridors that we need from coast to coast to coast to support our economic future. It is time for immediate action.
Alberta recommends the federal government take the following steps to strengthen Canada’s economic corridors and supply chains by:
- Creating an Economic Corridor Agency to identify and maintain economic corridors across provincial boundaries, with meaningful consultation with both Indigenous groups and industry.
- Increasing federal funding for trade-enabling infrastructure, such as roads, rail, ports, in-land ports, airports and more.
- Streamlining regulations regarding trade-related infrastructure and interprovincial trade, especially within economic corridors. This would include repealing or amending the Impact Assessment Act and other legislation to remove the uncertainty and ensure regulatory provisions are proportionate to the specific risk of the project.
- Adjusting the policy levers that that support productivity and competitiveness. This would include revisiting how the federal government supports airports, especially in the less-populated regions of Canada.
To move forward expeditiously on the items above, I propose the establishment of a federal/provincial/territorial working group. This working group would be tasked with creating a common position on addressing the economic threats facing Canada, and the need for mitigating trade and trade-enabling infrastructure. The group should identify appropriate governance to ensure these items are presented in a timely fashion by relative priority and urgency.
Alberta will continue to be proactive and tackle trade issues within its own jurisdiction. From collaborative memorandums of understanding with the Prairies and the North, to reducing interprovincial trade barriers, to fostering innovative partnerships with Indigenous groups, Alberta is working within its jurisdiction, much like its provincial and territorial colleagues.
We ask the federal government to join us in a new approach to infrastructure development that ensures Canada is productive and competitive for generations to come and generates the wealth that ensures our quality of life is second to none.
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Devin Dreeshen
Devin Dreeshen was sworn in as Minister of Transportation and Economic Corridors on October 24, 2022.
Business
Argentina’s Javier Milei gives Elon Musk chainsaw
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MxM News
Quick Hit:
Elon Musk made a dramatic appearance at the Conservative Political Action Conference (CPAC) on Thursday, wielding a chromed-out chainsaw gifted by Argentina’s President Javier Milei. The prop symbolized Musk’s commitment to slashing bureaucratic red tape through his Department of Government Efficiency (DOGE).
Key Details:
- Musk received the chainsaw from Milei before his sit-down interview at CPAC in Maryland.
- The chainsaw was engraved with Milei’s catchphrase, “Viva la libertad carajo!” which translates to “Long live freedom, Goddammit!”
- Musk brandished the chainsaw on stage, declaring it the “chainsaw for bureaucracy” to a cheering conservative crowd.
Diving Deeper:
Argentina’s President Javier Milei presented the symbolic chainsaw to Elon Musk ahead of his interview at CPAC, reinforcing their shared vision of reducing governmental influence. The chainsaw, emblazoned with Milei’s signature slogan, was meant to represent Musk’s mission with the Department of Government Efficiency (DOGE) to cut waste, fraud, and abuse within federal agencies.
Musk enthusiastically accepted the gift and held it aloft, declaring it the “chainsaw for bureaucracy.” The bold gesture was well-received by the conservative audience, with Musk adding a simple yet effective rallying cry: “Chainsaw!” The theatrics were in line with his commitment to DOGE’s mission of downsizing federal bureaucracy, drawing inspiration from Milei’s aggressive government-cutting measures in Argentina.
Milei’s fiscal conservatism has gained international attention, influencing Musk’s approach to DOGE. The Argentine president’s radical budget cuts and advocacy for limited government resonate with Musk’s goals for the United States. By symbolically passing the chainsaw to Musk, Milei reinforced a partnership rooted in economic freedom and governmental reform.
Musk later posted a photo of himself with the chainsaw on his social media platform, X, captioning it, “This is a real picture,” underscoring his commitment to his bureaucratic overhaul agenda. The image quickly went viral, amplifying the message of aggressive government reform.
The bold display at CPAC not only solidified Musk’s role as a disruptor within the political landscape but also strengthened the ideological bond between Musk and Milei, signaling an international alliance against government inefficiency.
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