Economy
Federal budget: You can’t solve a productivity emergency with tax hikes

News release from the Montreal Economic Institute
- Ottawa still has no plan to return to a balanced budget.
- Under Justin Trudeau, the federal government has hired over 98,000 new bureaucrats.
Montreal, April 16, 2024 – The increase in the capital gains tax inclusion rate will further exacerbate Canada’s productivity lag, asserted the Montreal Economic Institute in response to the publication of the federal budget this afternoon.
“Canada’s productivity is in crisis and the best way to get it back up is to attract new investments,” explains Renaud Brossard, Vice-President of Communications at the MEI. “And few are those who have been able to lure investments and job creators with promises of higher taxes.
“With this budget, the Trudeau government is shooting us in the foot.”
In the budget, the Trudeau government has announced the capital gains inclusion rate from 50 per cent to 66 per cent for capital gains superior to $250,000 per year.
Last March, the deputy governor of the Bank of Canada, Carolyn Rogers, spoke of a “productivity emergency” in Canada.
Canadians rank second to last among G7 countries in terms of productivity per hour worked, according to an MEI study published last August.
The Institute explains that this lag arises from a shortfall in private non-residential investment. In 2018, this investment amounted to an estimated $27,307 per American worker, but only $17,389 per Canadian worker.
“Every dollar the government expects to subtract from the pockets of investors with this tax hike is a dollar of potential investment lost,” explains Brossard. “It’s time for the Trudeau government to realize it doesn’t have a revenue problem, but rather a spending problem.”
The budget tabled by the Trudeau government today forecasts a shortfall of $39.8 billion for the year 2024-2025.
High interest rates are contributing to this situation, with interest payments on the federal debt estimated to reach $54.1 billion dollars this year, up 14.6 per cent over last year.
The MEI observes that one of the major sources of increased spending is the massive hiring of federal public servants under the Trudeau government.
Since the first Trudeau budget in 2016, the federal public service workforce has grown by more than 98,268 employees. Considered in terms of the number of government employees per Canadian, this represents a 28% increase according to an MEI study published in January.
“The explosion in the number of bureaucrats in recent years is symptomatic of a government that has lost all control over the growth of its spending,” explains Brossard. “There are now 28 per cent more federal public servants per capita, but very few Canadians would tell you that Ottawa is doing 28 per cent more for them.”
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The MEI is an independent public policy think tank with offices in Montreal and Calgary. Through its publications, media appearances, and advisory services to policy-makers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.
2025 Federal Election
Poilievre, Conservatives receive election endorsement from large Canadian trade union

From LifeSiteNews
The International Brotherhood of Boilermakers said Conservative prime minister candidate Pierre Poilievre ‘understands that the surest and most sustainable route to providing a cleaner environment is through technology, not dismantling our energy sectors, raising taxes, importing energy from other nations, and shipping Canadian jobs abroad.’
Conservative Party of Canada (CPC) leader Pierre Poilievre gained the support of one of Canada’s largest trade unions to become the nation’s next Prime Minister in what is an unprecedented show of favor to the conservatives.
An open letter statement published March 24 by the Arnie Stadnick, the International Brotherhood of Boilermakers’ vice president, stated that it is in its “interest” to announce its “endorsement for Pierre Poilievre and all the conservative candidates across Canada in this federal election.”
“Pierre gets it. He knows and understands that the surest and most sustainable route to providing a cleaner environment is through technology, not dismantling our energy sectors, raising taxes, importing energy from other nations, and shipping Canadian jobs abroad,” Stadnick wrote.
The Boilermakers, who represent about 12,000 skilled trades workers in many industries such as shipbuilding, manufacturing, and energy, said it supports Poilievre’s “Boots not Suits” policy that looks to expand training for tradespeople in the nation and increase grants.
“This plan is designed to strengthen the workforce and reduce reliance on foreign labour, adding 350,000 Canadian workers to job sites over five years,” the Boilermakers’ union noted.
“We believe that Pierre Poilievre is the man best equipped to support all of us in the work that we do.”
The Coalition of Concerned Manufacturers and Businesses of Canada also endorsed the Conservative leader with a statement last week, saying it “strongly supports the election of Pierre Poilievre as the next Prime Minister of Canada.”
Canada will hold its next federal election on April 28 after Prime Minister Mark Carney, who took over from Justin Trudeau a few weeks ago, triggered it a week ago.
Poilievre has blasted Carney as an “establishment” Liberal politician who was “installed” by “Justin Trudeau’s insiders.”
Carney thus far appears to not have gained the favor of Canada’s trade workers, as could be seen from a recent incident involving a Canadian construction worker. A video of this worker went viral online after the worker “vowed” not to “shake the hand” of Carney at a recent press conference in Alberta.
2025 Federal Election
Fixing Canada’s immigration system should be next government’s top priority

From the Fraser Institute
Whichever party forms government after the April 28 election must put Canada’s broken immigration system at the top of the to-do list.
This country has one of the world’s lowest fertility rates. Were it not for immigration, our population would soon start to decline, just as it’s declining in dozens of other low-fertility countries around the world.
To avoid the social and economic tensions of an aging and declining population, the federal government should re-establish an immigration system that combines a high intake with strictly enforced regulations. Once Canadians see that program in place and working, public support for immigration should return.
Canada’s total fertility rate (the number of children, on average, a woman will have in her lifetime) has been declining, with the odd blip here and there, since the 1960s. In 1972, it fell below the replacement rate of 2.1.
According to Statistics Canada, the country’s fertility rate fell to a record low of 1.26 in 2023. That puts us in the company of other lowest-low fertility countries such as Italy (1.21), Japan (1.26) and South Korea (0.82).
Those three countries are all losing population. But Canada’s population continues to grow, with immigrants replacing the babies who aren’t born. The problem is that, in the years that followed the COVID-19 lockdowns, the population grew too much.
The Liberal government was unhappy that the pandemic had forced Canada to restrict immigration and concerned about post-pandemic labour shortages. To compensate, Ottawa set a target of 500,000 new permanent residents for 2025, double the already-high intake of about 250,000 a year that had served as a benchmark for the Conservative government of Stephen Harper and the Liberal governments of Paul Martin and Jean Chrétien.
Ottawa also loosened restrictions on temporary foreign worker permits and the admission of foreign students to colleges and universities. Both populations quickly exploded.
Employers preferred hiring workers from overseas rather than paying higher wages for native-born workers. Community colleges swelled their ranks with international students who were also issued work permits. Private colleges—Immigration Minister Marc Miller called them “puppy mills”—sprang up that offered no real education at all.
At the same time, the number of asylum claimants in Canada skyrocketed due to troubles overseas and relaxed entry procedures, reaching a total of 457,285 in 2024.
On January 1 of this year, Statistics Canada estimated that there were more than three million temporary residents in the country, pushing Canada’s population up above 41.5 million.
Their presence worsened housing shortages, suppressed wages and increased unemployment among younger workers. The public became alarmed at the huge influx of foreign residents.
For the first time in a quarter century, according to an Environics poll, a majority of Canadians believed there were too many immigrants coming into Canada.
Some may argue that the solution to Canada’s demographic challenges lie in adopting family-friendly policies that encourage couples to have children. But while governments improve parental supports and filter policies through a family-friendly lens—for example, houses with backyards are more family-friendly than high-rise towers—no government has been able to reverse declining fertility back up to the replacement rate of 2.1.
The steps to repairing Canada’s immigration mess lie in returning to first principles.
According to Statistics Canada, there were about 300,000 international students at postsecondary institutions when the Liberals came to power in 2015. Let’s return to those levels.
The temporary foreign worker program should be toughened up. The government recently implemented stricter Labour Market Impact Assessments, but even stricter rules may be needed to ensure that foreign workers are only brought in when local labour markets cannot meet employer needs, while paying workers a living wage.
New legislation should ensure that only asylum claimants who can demonstrate they are at risk of persecution or other harm in their home country are given refuge in Canada, and that the process for assessing claims is fair, swift and final. If necessary, the government should consider employing the Constitution’s notwithstanding clause to protect such legislation from court challenges.
Finally, the government should admit fewer permanent residents under the family reunification stream and more from the economic stream. And the total admitted should be kept to around 1 per cent of the total population. That would still permit an extremely robust intake of about 450,000 new Canadians each year.
Restoring public confidence in Canada’s immigration system will take much longer than it took to undermine that confidence. But there can be no higher priority for the federal government. The country’s demographic future is at stake.
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