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Here are four ways the next federal government can cut spending

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4 minute read

From the Fraser Institute

By Jake Fuss and Grady Munro

With a federal election on the horizon, it’s worth reflecting on the Trudeau government’s extraordinary fiscal legacy, which includes record-high levels of spending (even after excluding emergency COVID spending), an uninterrupted string of budget deficits, a near doubling of the federal debt from $1.1 trillion to $2.1 trillion, and sky-high federal debt interest payments, which will reach a projected $51.9 billion (more than all GST revenue) this fiscal year.

Clearly, the next federal government, whoever that may be, must get smarter about government spending. Fortunately, as noted in our new study  published by the Fraser Institute, there are many areas within the federal government to find savings.

For example, this fiscal year (2024/25) the government will spend a projected $3.5 billion through the Canada Infrastructure Bank (CIB). Established by the Trudeau government in 2017, the CIB is a federal Crown corporation tasked with investing and attracting investment in infrastructure projects across Canada. Despite approving “investments” totalling $13.2 billion (as of the fourth quarter of 2023-24), the CIB has demonstrated an alarming lack of progress. As of July 2024, only two (out of 76) CIB-funded projects had been completed—the purchase of 20 electric buses in Edmonton and the construction of two solar facilities in Calgary. Small wonder that a 2022 multi-partisan House of Commons committee report recommended the government abolish the CIB.

To find more savings, the government should look at its seven Regional Development Agencies (RDAs), which provide financial assistance (a.k.a. corporate welfare) to businesses in specific regions across the country. Total spending will reach a projected $1.5 billion this fiscal year. But research shows that corporate welfare does little to nothing to promote widespread economic growth but simply allows the government to pick winners and losers in the free market. And rather than using concrete objectives and results to justify their existence, the RDAs rely on vague platitudes such as “businesses are growing” and “communities are developing economically.”

The government should also eliminate its so-called “Strategic Innovation Fund,” which spends tax dollars (a projected $2.4 billion this fiscal year) to simply shift jobs and investment away from some firms and industries to firms and industries favoured by the government, with no net benefit for the overall economy. And “Global Innovation Clusters,” which incentivize firms to spend time and resources modifying their businesses to secure government grants (worth a projected $202.3 million this fiscal year) rather than developing new and improved goods and services.

Finally, there’s the Green Municipal Fund (GMF), which uses federal tax dollars (including a projected $530 million this fiscal year) to bankroll municipal projects that purportedly accelerate the transition to “net-zero” greenhouse gas (GHG) emissions. But several current projects (e.g. “climate-friendly” home tours, funding for climate advocacy groups in Ottawa) will not reduce GHG emissions in any measurable way. In other words, the GMF is spending taxpayer dollars on projects that make no progress towards the GMF’s stated goal.

In total, our study highlights eight areas where the federal government should cut spending, with potential savings totalling $10.7 billion this fiscal year alone. By cancelling these wasteful programs, the government could eliminate roughly one-quarter of the current budget deficit.

Until policymakers in Ottawa get serious about cutting wasteful spending, budget deficits will likely continue. Smaller and smarter government in Ottawa is both possible and necessary.

Jake Fuss

Director, Fiscal Studies, Fraser Institute

Grady Munro

Policy Analyst, Fraser Institute

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2025 Federal Election

As PM Poilievre would cancel summer holidays for MP’s so Ottawa can finally get back to work

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From Conservative Party Communications

In the first 100 days, a new Conservative government will pass 3 laws:

1. Affordability For a Change Act—cutting spending, income tax, sales tax off homes

2. Safety For a Change Act to lock up criminals

3. Bring Home Jobs Act—that repeals C-69, sets up 6 month permit turnarounds for new projects

No summer holiday til they pass!

Conservative Leader Pierre Poilievre announced today that as Prime Minister he will cancel the summer holiday for Ottawa politicians and introduce three pieces of legislation to make life affordable, stop crime, and unleash our economy to bring back powerful paycheques. Because change can’t wait.

A new Conservative government will kickstart the plan to undo the damage of the Lost Liberal Decade and restore the promise of Canada with a comprehensive legislative agenda to reverse the worst Trudeau laws and cut the cost of living, crack down on crime, and unleash the Canadian economy with ‘100 Days of Change.’ Parliament will not rise until all three bills are law and Canadians get the change they voted for.

“After three Liberal terms, Canadians want change now,” said Poilievre. “My plan for ‘100 Days of Change’ will deliver that change. A new Conservative government will immediately get to work, and we will not stop until we have delivered lower costs, safer streets, and bigger paycheques.”

The ’100 Days of Change’ will include three pieces of legislation:

The Affordability–For a Change Act 

Will lower food prices, build more homes, and bring back affordability for Canadians by:

We will also:

  • Identify 15% of federal buildings and lands to sell for housing in Canadian cities.

The Safe Streets–For a Change Act 

Will end the Liberal violent crime wave by:

The Bring Home Jobs–For a Change Act 

This Act will be rocket fuel for our economy. We will unleash Canada’s vast resource wealth, bring back investment, and create powerful paycheques for workers so we can stand on our own feet and stand up to Trump from a position of strength, by:

Poilievre will also:

  • Call President Trump to end the damaging and unjustified tariffs and accelerate negotiations to replace CUSMA with a new deal on trade and security. We need certainty—not chaos, but Conservatives will never compromise on our sovereignty and security. 
  • Get Phase 2 of LNG Canada built to double the project’s natural gas production.
  • Accelerate at least nine other projects currently snarled in Liberal red tape to get workers working and Canada building again.

“After the Lost Liberal Decade of rising costs and crime and a falling economy under America’s thumb, we cannot afford a fourth Liberal term,” said Poilievre. “We need real change, and that is what Conservatives will bring in the first 100 days of a new government. A new Conservative government will get to work on Day 1 and we won’t stop until we have delivered the change we promised, the change Canadians deserve, the change Canadians voted for.”

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Automotive

Canadians’ Interest in Buying an EV Falls for Third Year in a Row

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From Energy Now

Electric vehicle prices fell 7.8 per cent in the last quarter of 2024 year-over-year, according to the AutoTader price index

Fewer Canadians are considering buying an electric vehicle, marking the third year in a row interest has dropped despite lower EV prices, a survey from AutoTrader shows.

Forty-two per cent of survey respondents say they’re considering an EV as their next vehicle, down from 46 per cent last year. In 2022, 68 per cent said they would consider buying an EV.

Meanwhile, 29 per cent of respondents say they would exclusively consider buying an EV — a significant drop from 40 per cent last year.

The report, which surveyed 1,801 people on the AutoTrader website, shows drivers are concerned about reduced government incentives, a lack of infrastructure and long-term costs despite falling prices.

Electric vehicle prices fell 7.8 per cent in the last quarter of 2024 year-over-year, according to the AutoTader price index.

The survey, conducted between Feb. 13 and March 12, shows 68 per cent of non-EV owners say government incentives could influence their decision, while a little over half say incentives increase their confidence in buying an EV.

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