The repair job at Immigration

The department’s top bureaucrat answers a critical report, with rare candour

Seven months ago Neil Yeates, a retired former deputy minister of immigration, submitted a report on the organization of the department of Immigration, Refugees and Citizenship Canada to the current deputy minister, Christiane Fox.

Yeates’s 28-page report was blunt, plainspoken, critical but constructive. It said “the current organizational model at IRCC is broken.” At a time of global upheaval and dizzying growth in immigration levels, the department that decides who gets into Canada was no longer “fit for purpose,” he wrote. It was time for “major change.” When? “[T]he advice is to proceed now.”

On Thursday, a copy of Yeates’s report landed in my email inbox.

On Thursday night, Christiane Fox told me she is implementing many of Yeates’s recommendations, and described for me her plans for the department with a level of detail and candour I almost never see in today’s Ottawa.

I’m keeping the paywall off this story because I want it to be widely read. But producing work like this is my full-time job, and I’m able to get stories like this because people understand I’m writing for one of the best audiences in Canadian journalism. If you want to support my full-time work and join that audience, consider subscribing or upgrading to a paid subscription.

Upgrade to paid

Copies of Yeates’s February IRCC Organizational Review Report have been floating around Ottawa because the department began implementing big changes this week. Some of the nearly 13,000 people who work in the department have asked for the rationale behind the changes. Yeates’s 28-page report makes the case succinctly.

Yeates was a top civil servant in Saskatchewan before moving to Ottawa in 2004. He held senior positions in three other departments before becoming deputy minister at Citizenship and Immigration Canada, the department now known as IRCC, where he served from 2009 to his retirement in 2013. That means he was Jason Kenney’s deputy minister for all of Kenney’s time at Immigration, but he was also a Trudeau Foundation mentor if you want to get excited about that instead.

His report’s purpose, he wrote, “is to provide strategic advice to the Deputy Minister on how the department can become a more efficient and effective organization.” After interviewing 36 people inside and outside the department, he decided it was a mess.

‘“[T]he current organizational model at IRCC is broken but is being held together by the hard work and dedication of staff,” he wrote. “At IRCC today department-wide planning is limited and some interviewees suggested it has in fact disappeared completely . There is no multi-year strategic plan, annual plans are not in place consistently across the department and consequently reporting is seen by many as haphazard.”

What the department did have going for it was a decent work environment: “In talking to senior managers at IRCC the culture was universally seen as ‘committed,’ ‘collaborative,’ ‘supportive’ and so on.” The senior managers Yeates interviewed saw this culture as “helping to overcome the shortcomings of the current organizational structure and of the weakness of the governance and management systems.”

The immigration department has always been the main portal between a messy world and an anxious nation. Lately the world had grown messier, Yeates noted, and the demands on the department were starting to hurt. “[T]he operating environment, both nationally and internationally, has grown ever more complex, unstable and frenetic,” he wrote.

In response, “the department has grown exponentially,” from 5,217 staff when Yeates left it in 2013 to12,721 this year, an expansion of 144%. The “Ex complement,” the department’s management cadre, grew from 135 to 227 over the same period, a smaller increase of 68%. That might explain why the department’s managers are so stressed, Yeates speculated. At any rate, the department’s structure was conceived for a much smaller staff and caseload.

To catch up, Yeates proposed big reform in four areas: Organizational Structure, Governance, Management Systems and Culture. He cautioned that tinkering with only one or a couple of those areas wouldn’t have the effect that a “Big Bang,” however difficult, would achieve.

The big problem in Organizational Structure was that the department isn’t organized along business lines: that one of the world’s leading destinations for asylum and humanitarian immigration doesn’t have an assistant deputy minister for asylum, for instance. The obvious challenge was that in a hectic world there will certainly be more crises, like those of recent years. “Should IRCC have a permanent ‘response team’ in place? The short answer is no.” Between crises that team of experienced trouble-shooters would just be twirling their thumbs. Instead Yeates proposed better contingency planning, including lessons learned from other crisis-management departments such as National Defence.

Under Governance, Yeates found a proliferation of over-large committees sitting through endless presentations and not really sure, at the end of each, whether they had decided anything. “Most of the actual decision-making occurs in DMO/ADM bilats,” he wrote, referring to meetings between the Deputy Minister’s office and a given Assistant Deputy Minister.

The section of Yeates’s report that deals with Management Systems reads like a parable of contemporary Ottawa: a “series of periodic crises” that somehow nobody anticipated, “descend[ing] into ‘issues management.’” What’s needed is much better planning and reporting, he wrote. When he was running the department barely a decade ago, every part of the department was reporting on progress against targets every three months. That system has fallen by the wayside. A department that’s obsessed with its “priorities” or with the to-do items in “a minister’s mandate letters” is “inherently limited” and guaranteed to be side-swiped by events intruding from the real world, he wrote.

The upshot of all this tunnel vision was that the department was expecting to “lapse,” or leave unspent, $368 million in projected spending for the year underway, even as passport-related spending was projecting a $238 million deficit.

Yeates’s report closed with the sort of plea that’s traditional in this sort of exercise, essentially pleading not to be ignored. “IRCC is at a crossroads and as Yogi Berra famously quipped ‘when you come to a fork in the road, take it,’” he wrote. Change is hard, but a “substantial majority” of the people he interviewed told him it was overdue.

Neil Yeates and Christiane Fox.

And that’s where the report ends. I had to decide what to do with it. First, always consider the possibility that you’ve been handed a fake report, or the first draft of something that was later amended beyond recognition. I emailed the office of Immigration Minister Marc Miller looking for comment. They handed me off to the civil servants in the department’s communications staff. But I also emailed Christiane Fox, the deputy minister, offering her a chance to comment. This is the sort of chance that people in Ottawa usually don’t touch with a barge pole.

But Fox called me on Thursday night and responded in detail. I asked: was the conversation on the record? She thought out loud for a few seconds, working her way up to a “Yes.” I don’t want to belabour this, but that answer is very rare these days.

The other way you can help me, besides subscribing, is to tell people about the work I’m doing here. Share this story with friends and family, or post it to your social networks. Let people know what we’re building here.

Christiane Fox had been the DM at Indigenous Services for all of 22 months when she was sent to run IRCC in July of 2022. The new job “felt like crisis”: the department was sending weekly updates to an ad hoc committee of ministers whose job was to fix months of chaos in airports and passport offices.

“They felt like they were under duress,” Fox said. “Everyone was exhausted.” New staff were just “tacked on when there was a problem,” including the creation of an entirely new sector for Afghanistan. Fox talked about this with some of the most experienced public servants in town, including Yeates and Richard Dicerni, Fox’s former DM from her days as a young public servant at Industry, who passed away this summer and whose contribution to public life in Canada is hard to measure.

“I kind of said, ‘We’ve got to make some changes. And I don’t want to do it overnight. But I also don’t want to spend two years figuring out what a new model could look like.’” Yeates, whom she didn’t know well but who knew the department’s history, seemed like solid outside counsel.

While Yeates was doing his thing, Fox and the previous immigration minister, Sean Fraser, were consulting — with “business leaders, academics and clients” — about the department’s future. By June of this year, she had a plan, based on Yeates’s report and those consultations. She’s been rolling it out since then, from top managers on down, and on Wednesday, by way of explanation for the changes that are coming, she sent the Yeates report to enough people that I got a copy. A department-wide meeting is scheduled for this coming week.

What’s changing? “The model is now just more of a business-line model,” she said, reflecting Yeates’s first big recommendation.

So there’ll be a stronger crisis-planning sector. In a world that keeps producing humanitarian crises, the goal is to learn lessons for next time from Ukraine, Afghanistan and elsewhere. “Most importantly, we’ll have a group dedicated to thinking about these issues, planning for crisis.” It won’t eliminate the need to “surge,” or quickly add new staff when something flares up. “But in the past, we ended up surging so much that all of our other business lines suffered every time there was a crisis.” The goal now is to get better at anticipating so the department’s regular work doesn’t suffer.

“Asylum and Refugee. There was no Asylum ADM,” she said, reflecting another Yeates critique. “This is probably the thing that causes me the most heartache, in terms of, how are we going to deal with this as a country, globally? What are some of the tools that we have? How do we support the most vulnerable? How do we have a system that is fast and fair? So Asylum and Refugee will now be a sector within the department.”

In addition, there’ll be a sector focused on Economic Immigration and Family. “The business community didn’t really feel like we were actually talking to them about labour shortages, about skills missions, about what is the talent that the country needs.” And a sector on francophone immigration, identifying French-speaking sources of immigration and taking into account the needs of French-speaking newcomers.

“Other sectors remain kind of consistent. Like, we’ve always had a focus on border and security, but we will now have a team that’s really migration integrity, national security, fraud prevention, and looking at case management in that context.”

Fox said she’s working on more of a “client focus” in the department’s work. “When I joined the department I remember, my first few weeks, thinking, ‘Everybody talks about inventory and backlog and process.’ But I didn’t feel clients and people were at the forefront.” This may sound like a semantic difference. But anyone who’s been treated as inventory and backlog can testify to the potential value in any reform that restores a measure of humanity to recipients of government service.

I’ve been arguing for months here that simply acknowledging problems and identifying possible solutions is better communications than the happy-face sloganeering that passes for so much of strategic comms these days. Here, quite by accident, I’d stumbled across somebody who seems to have had similar thoughts. (There’s an irony here, because Fox’s CV includes a long stint as a director of strategic communications in the Privy Council Office.)

“There will be things that will come up,” Fox said, “that may not be as smooth a transition as we thought, or maybe a bit clunky, that we need to rethink. What we’ve told the employees is, it won’t be perfect. We needed to change, we’re going to change, but there’s going to be room for conversation around issues that arise as we go through this process.”

To subscribe to the full Paul Wells experience, upgrade your subscription.

Upgrade to paid

Todayville

Todayville is a digital media and technology company. We profile unique stories and events in our community. Register and promote your community event for free.

Follow Author

The idea of ‘democracy’ championed by globalist elites is far from what the people think

Business / 4 hours ago

The Strange Case of the Disappearing Public Accounts Report

Business / 23 hours ago

Two major banks leave UN Net Zero Banking Alliance in two weeks

Opinion

The idea of ‘democracy’ championed by globalist elites is far from what the people think

Published on December 23, 2024

Todayville

Marine Le Pen of the National Rally Party in France

From LifeSiteNews

By Emily Finley

The classic definition of democracy is ‘rule by the people’ and indicates a concrete form of government. There is another definition of ‘democracy,’ in currency among many elites, denoting democracy as hypothetical ideal.

Many are calling the present political turmoil in Europe a crisis of democracy. The German establishment is trying to ban the right-wing AfD Party for its alleged desire to return Germany to fascism. In France, the progressives are doing their darndest to hamstring conservative Marine Le Pen and her National Rally Party after they won the first round of the French elections. And in Romania, the Constitutional Court just nullified the results of a presidential election because the “right wing” victor ostensibly benefited from Russian “election interference.”

But which definition of “democracy” are we talking about? For the establishment leaders, the AfD, the National Rally Party, and Calin Georgescu are threats to democracy. For the supporters of these right-of-center parties and politicians, the progressive authorities are the threat to democracy.

It is time we make a clear distinction between these two varieties of “democracy” that we are told are in crisis.

The classic definition of democracy is “rule by the people” and indicates a concrete form of government. There is another definition of “democracy,” in currency among many elites, denoting democracy as hypothetical ideal. I call this ideological understanding “democratism.”

Populists worry about the survival of the former kind of democracy. The establishment worries about the survival of democratism.

On what basis do establishment leaders argue that excluding popularly elected parties and representatives of the people saves democracy? And that nullifying the results of a democratic election is in the name of democracy? There is, in fact, in America and Western Europe and its colonial satellites a tradition of conceiving of democracy as an ideal rather than the actual will of the people. Jean-Jacques Rousseau outlined this new understanding of democracy in his Social Contract in 1762. He argues that democracy is not the expressed will of the people but rather its ideal will, which he calls the General Will. Because the people are often uninformed, inclined to self-interest, and generally too narrow-minded to see the whole picture, they often deviate from that which is in their true interest, which is synonymous with the General Will. Therefore, an all-knowing and all-powerful Legislator must midwife the General Will into existence, even against the wishes of the people. If the people were to look deep down, Rousseau insists, they would see that the Legislator’s General Will really is their own individual will.

How often do we hear that those who voted for Donald Trump did not really know what was in their best interest? That they were duped? Or that the results of a popular election in Europe in which a “far right” candidate won was due to “interference” or social media misinformation adulterating the results of the election? Headlines and academic articles about this or that politician or political measure or social media platform subverting democracy to “save it” are too numerous to count.

It turns out that an entirely different notion of democracy, the one elaborated by Rousseau, is under discussion. For Rousseau as well as our own elite ministers of democracy, pluralism, coalition governments, compromise as imagined by the American founders, and genuine tolerance of opposing viewpoints are like so many defeats for “democracy” of the democratist variety.

The concept of “democratic backsliding” is along these same lines. Backsliding from what? From the hypothetical ideal as conceived by the academicians and foreign policy establishment. The highly theoretical, democratist interpretation of democracy has now become the norm for many of our thought leaders.

In the face of legitimate popular grievances with the status quo, ruling elites are canceling elections, shutting down social media accounts, and using lawfare to take down political opponents. This makes clear that when these elites talk about “democracy,” they’re not talking about rule by the people.

How will this tension between the elites and the people be resolved? Handing down goals of “carbon neutrality,” ideological notions of “gender equality,” spreading democracy abroad, and other abstractions only further distances the elite from ordinary people who are concerned with high consumer prices, the abominable state of public education for their kids, and big hurdles to homeownership. Trump put his finger on the pulse, and he won the election because of it. The ascendency of populist and anti-establishment parties in Europe indicates that the same is happening there.

As the ruling elites continue to take repressive measures against their political opponents, we will see an increase in the rift between them and the people they claim to represent. If modern history is any indicator, a ruling body acting in its own interest and against the body politic will not enjoy power for long.

Business

The Strange Case of the Disappearing Public Accounts Report

Published on December 23, 2024

Todayville

David Clinton

A few days ago, Public Services and Procurement Canada tabled their audited consolidated financial statements of the Government of Canada for 2024. This is the official and complete report on the state of government finances. When I say “complete”, I mean the report’s half million words stretch across three volumes and total more than 1,300 pages.

Together, these volumes provide the most comprehensive and authoritative view of the federal government’s financial management and accountability for the fiscal year ending March 31, 2024. The tragedy is that no one has the time and energy needed to read and properly understand all that data. But the report identifies problems serious enough to deserve the attention of all Canadians – and especially policy makers.

The Audit is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Subscribe to The Audit

Following the approach of my Parliamentary Briefings series, I uploaded all three volumes of the report to my AI research assistant and asked for its thoughts. Each one of the observations that came out the other end is significant and, in calmer and more rational times, could easily have driven a week’s worth of news coverage. But given the craziness of the past few weeks and months, they’re being largely ignored.

With that in mind, I’ve made this special edition of the Parliamentary Briefings series fully accessible to all subscribers.

We begin with a summary of the purpose and scope of the three uploaded volumes of the Public Accounts of Canada for 2023–2024:

Volume I: Summary Report and Consolidated Financial Statements

Purpose: Provides a high-level overview of the federal government’s financial performance, presenting the consolidated financial statements audited by the Auditor General. It serves as the primary accountability report.
Scope:
- Audited financial statements.
- Analysis of revenues, expenses, and the accumulated deficit.
- Overview of assets, liabilities, and financial position.
- Discussion of economic context, risks, uncertainties, and ten-year comparative financial data.

Volume II: Details of Expenses and Revenues

Purpose: Presents the financial operations of the government, broken down by ministries and agencies, for detailed accountability.
Scope:
- Financial transactions segregated by ministry.
- Details of appropriations, revenues, and transfer payments.
- Summary tables on ministerial expenditures by type, object, and other dimensions.
- Appendices providing additional details on budgetary authorities and their sources.

Volume III: Additional Information and Analyses

Purpose: Offers supplementary analyses and financial data beyond what is included in the first two volumes, focusing on revolving funds, professional services, and shared-cost programs.
Scope:
- Financial statements of revolving funds (e.g., Passport Canada, Canadian Grain Commission).
- Expenditure details on acquisitions, transfer payments, and public debt charges.
- Analyses of federal-provincial shared-cost programs and claims against the Crown.
- Miscellaneous financial and operational data for broader transparency.

The Audit: Based on these documents, could you identify the most serious threats to Canada’s economic stability?

From the Public Accounts of Canada 2023–2024, several serious threats to Canada’s economic security can be identified. These threats emerge from the broader fiscal and economic analyses, contingent liabilities, and uncertainties highlighted in the documents.

1. Growing Public Debt and Debt Servicing Costs

Observation: Canada’s public debt charges increased significantly in 2024, rising by 35.2% year-over-year, largely due to higher interest rates on debt. The total accumulated federal debt stood at $1.24 trillion, representing 42.1% of GDP, up from 41.1% the previous year.
Risk: Rising debt servicing costs reduce fiscal space for critical public investments, making the economy vulnerable to future economic shocks or downturns.

2. Contingent Liabilities and Indigenous Claims

Observation: The government recorded $16.4 billion in contingent liabilities related to Indigenous claims in 2024, reflecting ongoing efforts to address past injustices. These liabilities have been increasing at an average annual growth rate of 30% since 2016.
Risk: The unpredictable nature and scale of these liabilities could create significant financial pressures if settlements or court decisions require substantial payouts.

3. Legacy Costs from the COVID-19 Pandemic

Observation: The government recorded $4.7 billion in pandemic-related expenses for 2024, including write-offs for expired vaccines and provisions for unrecovered loans and benefits.
Risk: These costs highlight vulnerabilities in emergency financial planning and expose the government to further financial risks if similar large-scale public health crises occur.

4. Economic Pressures from High Inflation and Interest Rates

Observation: Inflation returned to the Bank of Canada’s 2% target by mid-2024 after 41 consecutive months above this threshold. However, elevated interest rates (peaking at 5%) contributed to a softening economy.
Risk: Prolonged periods of high interest rates could suppress household and business spending, slowing economic growth and increasing the likelihood of a recession.

5. Climate Change and Environmental Commitments

Observation: Significant spending is allocated to addressing climate change, with over $1 billion dedicated to environmental programs in 2024, including pollution pricing proceeds and clean energy initiatives.
Risk: Canada’s reliance on resource-intensive industries and increasing costs to meet climate targets create economic vulnerabilities, particularly in regions heavily reliant on fossil fuels.

6. Global Economic Instability

Observation: Global supply chain disruptions, energy price volatility, and geopolitical events (e.g., Russia’s invasion of Ukraine) significantly impacted Canada’s economy, with slower GDP growth (1.5% in 2023) and reduced trade.
Risk: External shocks could exacerbate domestic economic challenges, such as rising import costs or reduced demand for Canadian exports.

7. Labor Market and Productivity Challenges

Observation: While job creation remained positive, population growth outpaced employment gains, leading to an increase in the unemployment rate to 6.5% by October 2024. Productivity improvements have been uneven.
Risk: Labor shortages in key sectors and declining workforce participation among certain demographics (e.g., aging population) could undermine economic resilience.

8. Dependence on Resource Revenues

Observation: Volatile global commodity prices impacted nominal GDP growth, with gains slowing to 2.9% in 2023 after double-digit growth in prior years.
Risk: Fluctuations in resource revenues leave Canada exposed to external shocks, particularly in provinces like Alberta and Saskatchewan, heavily reliant on oil and gas.

These challenges underscore the need for proactive fiscal and policy measures to safeguard economic stability, manage liabilities, and address emerging risks.

The Audit: What would you recommend as the three most urgent areas to address to avoid deepening the economic crisis?

1. Manage Rising Public Debt and Debt Servicing Costs

Why It’s Urgent: The rapid increase in public debt charges (35.2% in 2024) is crowding out fiscal space for essential programs. The federal debt, at 42.1% of GDP, has become a significant liability, with interest rate fluctuations posing an ongoing threat.
Recommendations:
- Introduce stricter fiscal discipline by prioritizing expenditures that yield long-term economic benefits (e.g., infrastructure, innovation).
- Develop a comprehensive debt reduction strategy to stabilize the debt-to-GDP ratio in the medium term.
- Explore debt refinancing strategies to lock in lower interest rates where feasible.
Impact: Reducing debt servicing pressures will free up resources for critical investments and improve Canada’s fiscal resilience.

2. Mitigate the Economic Impact of Contingent Liabilities

Why It’s Urgent: Contingent liabilities related to Indigenous claims have grown exponentially (30% annually since 2016), creating fiscal unpredictability and potentially overwhelming future budgets.
Recommendations:
- Accelerate settlement negotiations to limit litigation costs and interest on outstanding claims.
- Establish a transparent reserve fund specifically for contingent liabilities, ensuring predictable future payouts.
- Increase collaboration with Indigenous communities to address systemic issues and prevent further claims.
Impact: Resolving liabilities promptly will reduce fiscal uncertainty and demonstrate Canada’s commitment to reconciliation.

3. Address Structural Labor Market and Productivity Challenges

Why It’s Urgent: Despite job creation, rising unemployment (6.5% in late 2024) and productivity stagnation threaten long-term economic growth. Labor shortages in critical sectors further exacerbate vulnerabilities.
Recommendations:
- Expand skilled immigration programs to address labor shortages in healthcare, technology, and green industries.
- Increase investment in workforce retraining programs, particularly for sectors undergoing automation or transition due to climate policies.
- Promote workplace flexibility and childcare access to increase labor force participation, particularly among women and aging workers.
Impact: Enhancing workforce productivity and participation will strengthen the economic foundation and support GDP growth.

Rationale for Prioritization

These areas represent the most immediate threats to economic security and fiscal stability. Addressing them proactively can reduce vulnerabilities and position Canada for sustainable growth.

The Audit: What are the most surprising and disturbing details in these documents?

1. Rapid Growth of Public Debt Charges

Detail: Public debt charges increased by 35.2% year-over-year to $47.3 billion, representing one of the fastest-growing expense categories. This reflects a combination of higher interest rates and the significant size of Canada’s debt.
Why Disturbing: Such a rapid increase in debt servicing costs could divert funds from essential public services and programs. It also signals limited fiscal flexibility in the event of future economic shocks.

2. Ballooning Contingent Liabilities

Detail: The federal government recorded $16.4 billion in expenses for Indigenous contingent liabilities in 2024. This is part of an ongoing surge, with liabilities increasing by 30% annually since 2016.
Why Disturbing: While reconciliation efforts are vital, the sheer scale and rapid growth of these liabilities are fiscally unsustainable without structural changes or dedicated funding mechanisms. The risk of further liabilities emerging adds to fiscal uncertainty.

3. Significant Write-offs and Provisions for Pandemic Programs

Detail: The government wrote off $1.2 billion in expired COVID-19 vaccines and therapeutics and recorded $3.5 billion in provisions for unrecovered pandemic-era loans.
Why Disturbing: These figures highlight inefficiencies in planning and administration during the pandemic response, leading to substantial financial losses. The scale of unrecovered funds also raises questions about accountability in the deployment of emergency programs.

4. Rising Unemployment Despite Job Creation

Detail: While 475,000 jobs were created in 2023, the unemployment rate rose to 6.5% by late 2024 due to population growth outpacing employment gains.
Why Surprising: Despite strong job creation, an inability to keep pace with population growth signals structural issues in labor force integration. This poses a risk to Canada’s economic competitiveness and social cohesion.

5. Declining Corporate Income Tax Revenues

Detail: Corporate income tax revenues decreased by 0.7%, driven by reduced taxable income despite an overall increase in total revenues.
Why Surprising: The decline in corporate tax revenues during a period of economic recovery raises concerns about potential tax avoidance, economic inequality, or over-reliance on other revenue streams, such as personal income taxes.

6. Substantial Environmental and Climate Spending

Detail: Over $1 billion was allocated to environmental programs, including pollution pricing proceeds. However, the documents note Canada’s slow progress toward net-zero targets and risks to resource-dependent provinces.
Why Disturbing: While necessary, this spending may be insufficient given the scale of the climate challenge. The mismatch between spending and measurable progress on climate goals risks long-term environmental and economic consequences.

7. Unanticipated Costs of Indigenous Reconciliation

Detail: Beyond contingent liabilities, the government is facing unpredictable settlement costs due to increasing litigation and the complexity of claims. These have already exceeded $60 billion since 2016.
Why Disturbing: The ongoing financial impact of these settlements reflects Canada’s historical neglect of Indigenous issues. Resolving these claims is essential, but the lack of predictability or dedicated funding highlights systemic shortcomings in reconciliation strategies.

8. Softened GDP Growth and Inflation Challenges

Detail: Real GDP growth slowed to 1.5% in 2023, and inflation remained high throughout the year, only reaching the Bank of Canada’s 2% target by mid-2024.
Why Disturbing: The prolonged inflationary period and sluggish growth signal a fragile recovery. These economic conditions could exacerbate income inequality and lead to further fiscal strain.

9. High Provisions for Unrecovered Loans

Detail: Provisions of $3.5 billion were recorded for emergency loans provided during the pandemic. The government continues to face difficulties in recovering these funds.
Why Disturbing: This provision raises serious questions about the efficiency of loan administration and the government’s ability to safeguard public funds during emergencies.

10. Heavy Dependence on Volatile Resource Revenues

Detail: Nominal GDP growth slowed to 2.9% in 2023, largely due to easing commodity prices after a surge in 2022. Resource dependence remains a key economic vulnerability.
Why Surprising: Despite global shifts toward renewable energy, Canada’s reliance on resource revenues remains high, posing long-term risks to economic diversification and stability.