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Federal government poised to pile on more spending and debt

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Next week, the Trudeau government will release its fall fiscal update, which, considering the sorry state of federal finances, should demonstrate a newfound approach to spending and borrowing. But don’t hold your breath.

Although the Trudeau government describes itself as “fiscally responsible,” in reality it has a track record of unrestrained spending and large budget deficits. And it’s overseen the five highest years (2018 to 2022) of per-person program spending (adjusted for inflation) in Canadian history. Even excluding COVID-related spending, 2020 and 2021 remain the two highest years of per-person spending on record.

The Trudeau government has also run deficits every year since it took office in 2015—according to forecasts, this year’s deficit will eclipse $40 billion even though COVID is in the rearview mirror. Consequently, federal debt will have increased nearly $900 billion since 2014/15, up to $1.9 trillion for 2023/24.

While the prime minister and Finance Minister Chrystia Freeland often downplay the level of debt accumulation by noting that Canada has the lowest net debt-to-GDP ratio among the G7 countries (Germany, Italy, Japan, France, the United Kingdom and the United States), this is misleading.

Net debt is calculated as total (gross) debt minus all financial assets, with the implicit assumption that those assets could be used to offset debt. However, the Canada and Quebec Pension Plans (CPP and QPP) are included in the financial assets used to calculate net debt in Canada. But because CPP/QPP assets are needed for existing and future retirees, in reality they can’t be used to offset government debt.

Therefore, a better measure is gross debt, which measures all liabilities that require future payment of interest and/or principal by the debtor to the creditor. Compared to 29 other advanced economies, including the G7 countries, Canada’s gross debt as a share of the economy ranks 20th—meaning Canada is among the most indebted countries.

Clearly, the Trudeau government has been anything but fiscally responsible. And the current levels of spending and borrowing impose real costs on Canadians.

For example, since 2014/15 federal government debt interest costs have nearly doubled—reaching an estimated $43.9 billion, or 9.6 per cent of total revenues, for 2023/24. This means roughly one in every 10 dollars Ottawa collects from Canadian taxpayers this year will go towards debt interest costs, rather than government services or tax relief.

In light of these fiscal realities, if the Trudeau government wants to move anywhere close to a balanced budget in the foreseeable future, it must take meaningful steps in the upcoming fall fiscal update to restrain spending growth.

Unfortunately, this is unlikely to happen.

In a recent report, the Parliamentary Budget Officer (PBO) estimated that, due to spending increases, the federal government will run a deficit of $46.5 billion for 2023/24—$6.4 billion more than the government’s budget projections in March.

The government will also likely include new spending in the upcoming fiscal update meant to address housing and affordability. And will likely soon table legislation on national pharmacare, which the PBO estimates will cost $11.2 billion in 2024/25 alone.

Finally, not only does this unprecedented level of spending rack up mountains of debt, according to Bank of Canada Governor Tiff Macklem, “government spending is starting to get in the way of getting inflation back to target.” In other words, more spending by the federal government to address affordability concerns could actually worsen the problem by keeping inflation (and interest rates) higher than would otherwise be the case, eroding the purchasing power of Canadians.

While Ottawa’s fiscal situation demands a fiscally responsible fall fiscal update, it’s likely we’ll see much of the same next week from the Trudeau government—more spending and more borrowing.

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2025 Federal Election

Poilievre will cancel Mark Carney’s new Liberal packaging law and scrap the Liberal plastic ban!

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From Conservative Party Communications

Conservative Leader Pierre Poilievre promised today that a new Conservative government will stop Mark Carney’s proposed Liberal food tax and scrap the existing Liberal plastic ban. Poilievre will:

  • Stop proposed new labelling and packaging requirements that will raise the cost of fresh produce by as much as 34% and cost the average Canadian household an additional $400 each year.
  • Scrap the Liberal plastics ban, including the ban on straws, grocery bags, food containers and cutlery, and other single-use plastics, letting consumers and businesses choose what works for them.
  • Protect restaurants, grocers, and low-income Canadians from one-size-fits-all packaging rules that disproportionately affect those who can least afford it.

“After the Lost Liberal Decade, many Canadians can barely afford to put food on the table. And now Mark Carney and the Liberals want to make it even harder with a new food packaging law that will raise the price of food–again,” said Poilievre. “A new Conservative government will keep food prices down by scrapping the Liberal plastic ban and stopping Carney’s new Liberal food tax.”

After a decade of out-of-control spending and massive tax increases, families are spending $800 more on food this year than they did in 2024, and food banks had to handle a record two million visits in a single month. In Montreal, 44 percent of CEGEP students are experiencing some form of food insecurity, while places like HawkesburyKingstonToronto and Mississauga have all declared food insecurity emergencies.

And food prices are still rocketing upwards, surging by 3.2% over the last year, with no end in sight. In the last month alone, food inflation increased by 1.9 percentage points—the largest monthly jump in food prices in decades.

As if this wasn’t bad enough, Liberals have made life even more expensive and inconvenient for Canadians by banning plastics – including everything from straws to bags to food packaging. The current Liberal ban on single-use plastics will cost Canadians $1.3 billion dollars over the next decade.

Now Mark Carney wants to make it worse by adding complicated and costly new food packaging rules that will drive up the price of food even more–in effect, a new Liberal food tax. Plastic food packaging makes up 1/3 of all plastic packaging in Canada. The proposed Liberal food tax will cost the average Canadian household an additional $400 each year, waste half a million tonnes of food, decrease access to imported fruit and produce, and increase food inflation. The Chemistry Industry Association of Canada has also warned that this tax will put up to 60,000 Canadians out of work.

“The Liberals’ ideological crusade against convenience has already driven up food prices and the last thing Canadians need is Mark Carney’s new food tax added directly to your grocery bill,” said Poilievre. “The choice for Canadians is clear, a fourth Liberal term that will make food even more expensive or a new Conservative government that will axe the food tax and bring back straws, grocery bags and other items, to make life more affordable and convenient for Canadians – For a Change.”

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Ted Cruz, Jim Jordan Ramp Up Pressure On Google Parent Company To Deal With ‘Censorship’

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From the Daily Caller News Foundation

By Andi Shae Napier

Republican Texas Sen. Ted Cruz and Republican Ohio Rep. Jim Jordan are turning their attention to Google over concerns that the tech giant is censoring users and infringing on Americans’ free speech rights.

Google’s parent company Alphabet, which also owns YouTube, appears to be the GOP’s next Big Tech target. Lawmakers seem to be turning their attention to Alphabet after Mark Zuckerberg’s Meta ended its controversial fact-checking program in favor of a Community Notes system similar to the one used by Elon Musk’s X.

Cruz recently informed reporters of his and fellow senators’ plans to protect free speech. 

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“Stopping online censorship is a major priority for the Commerce Committee,” Cruz said, as reported by Politico. “And we are going to utilize every point of leverage we have to protect free speech online.”

Following his meeting with Alphabet CEO Sundar Pichai last month, Cruz told the outlet, “Big Tech censorship was the single most important topic.”

Jordan, Chairman of the House Judiciary Committee, sent subpoenas to Alphabet and other tech giants such as RumbleTikTok and Apple in February regarding “compliance with foreign censorship laws, regulations, judicial orders, or other government-initiated efforts” with the intent to discover how foreign governments, or the Biden administration, have limited Americans’ access to free speech.

“Throughout the previous Congress, the Committee expressed concern over YouTube’s censorship of conservatives and political speech,” Jordan wrote in a letter to Pichai in March. “To develop effective legislation, such as the possible enactment of new statutory limits on the executive branch’s ability to work with Big Tech to restrict the circulation of content and deplatform users, the Committee must first understand how and to what extent the executive branch coerced and colluded with companies and other intermediaries to censor speech.”

Jordan subpoenaed tech CEOs in 2023 as well, including Satya Nadella of Microsoft, Tim Cook of Apple and Pichai, among others.

Despite the recent action against the tech giant, the battle stretches back to President Donald Trump’s first administration. Cruz began his investigation of Google in 2019 when he questioned Karan Bhatia, the company’s Vice President for Government Affairs & Public Policy at the time, in a Senate Judiciary Committee hearing. Cruz brought forth a presentation suggesting tech companies, including Google, were straying from free speech and leaning towards censorship.

Even during Congress’ recess, pressure on Google continues to mount as a federal court ruled Thursday that Google’s ad-tech unit violates U.S. antitrust laws and creates an illegal monopoly. This marks the second antitrust ruling against the tech giant as a different court ruled in 2024 that Google abused its dominance of the online search market.

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