Business
Prime minister rejects ‘austerity’ despite massive debt and dismal economic growth
From the Fraser Institute
By Grady Munro and Jake Fuss
Adjusting for population growth and inflation, the Trudeau government has recorded the five-highest years (2018-2022) of per-person spending in Canadian history, and is on track to record a sixth.
This week, at the Liberal cabinet retreat in Montreal, Prime Minister Justin Trudeau told reporters he’s against “austerity and cuts” and believes his government must “invest” to “create greater growth” in the economy, thus dashing hopes for any meaningful spending restraint in the upcoming federal budget.
But evidence shows the government’s current plan has not helped the economy despite the prime minister’s claims. Rather than double-down on a failed strategy of higher spending, taxes and borrowing, the Trudeau government should change direction immediately.
Let’s look at the evidence.
According to its latest fiscal projections, the federal government will spend $449.8 billion on programs and services in 2023/24—up 75.5 per cent (nominally) from 2014/15 when program spending was $256.2 billion. Adjusting for population growth and inflation, the Trudeau government has recorded the five-highest years (2018-2022) of per-person spending in Canadian history, and is on track to record a sixth. But have we seen a corresponding increase in economic growth?
No, in fact Canada has experienced an economic growth crisis for the last decade.
One of the best ways to measure economic growth is to use inflation-adjusted per-person gross domestic product (GDP), which provides the broadest measure of living standards for Canadians. According to a recent study by Philip Cross, former chief economic analyst at Statistics Canada, between 2013 and 2022 Canada’s per-person GDP (inflation-adjusted) grew at its slowest pace since the 1930s. Moreover, economic growth in Canada has fallen well behind growth in the United States, showing that Canada’s stagnation was not inevitable.
And there’s little room for optimism. According to OECD estimates, Canada will have the slowest growth in per-person GDP among advanced economies from 2020 to 2030 and 2030 to 2060.
Simply put, the data show that increased government spending has not produced greater prosperity for Canadians.
Indeed, rather than “invest” in Canadians, the Trudeau government has burdened Canadians with mountains of debt. The Trudeau government has yet to balance the budget, despite campaign promises, and this year will likely run its ninth consecutive deficit. Nearly a decade of uninterrupted deficits has increased the federal debt by $941.9 billion. This not only imposes costs on Canadians today—primarily through higher debt interest costs—but also increases the tax burden on future generations who are ultimately responsible for paying off today’s debt.
If the Trudeau government needs a blueprint for reform, it can find it within its own party, which has a history of spending reductions and strong economic growth.
During the mid-1990s, the Chrétien Liberal government introduced meaningful spending reductions that ultimately balanced the federal budget in 1997, marking the first federal budget surplus in nearly 30 years. In addition to spending reductions, the Chrétien government also introduced tax relief and other growth-enhancing policies. And the results were immediate.
Between 1997 and 2007, Canada’s average annual increase in per-person GDP (inflation-adjusted) was 2.2 per cent, which was higher than the OECD average. During the same time period, Canada’s average rate of employment growth was nearly double the average in the OECD and the United States. And the national poverty rate fell from 7.8 per cent in 1996 to 4.9 per cent in 2004. Overall, the Canadian economy outperformed many other industrialized economies during this time and living standards improved for Canadians—despite reductions in government spending.
Despite claims by Prime Minister Trudeau, less government spending (not more) is necessary to help reverse the trend of stagnant economic growth. The Trudeau government should recognize that the current plan isn’t working and change course in its upcoming budget.
Authors:
Quick Hit:
President Trump on Thursday confirmed a sweeping new 35% tariff on Canadian imports starting August 1, citing Canada’s failure to curb fentanyl trafficking and retaliatory trade actions.
Key Details:
- In a letter to Canadian Prime Minister Mark Carney, Trump said the new 35% levy is in response to Canada’s “financial retaliation” and its inability to stop fentanyl from reaching the U.S.
- Trump emphasized that Canadian businesses that relocate manufacturing to the U.S. will be exempt and promised expedited approvals for such moves.
- The administration has already notified 23 countries of impending tariffs following the expiration of a 90-day negotiation window under Trump’s “Liberation Day” trade policy.
Diving Deeper:
President Trump escalated his tariff strategy on Thursday, formally announcing a 35% duty on all Canadian imports effective August 1. The move follows what Trump described as a breakdown in trade cooperation and a failure by Canada to address its role in the U.S. fentanyl crisis.
“It is a Great Honor for me to send you this letter in that it demonstrates the strength and commitment of our Trading Relationship,” Trump wrote to Prime Minister Mark Carney. He added that the tariff response comes after Canada “financially retaliated” against the U.S. rather than working to resolve the flow of fentanyl across the northern border.
Trump’s letter made clear the tariff will apply broadly, separate from any existing sector-specific levies, and included a warning that “goods transshipped to evade this higher Tariff will be subject to that higher Tariff.” The president also hinted that further retaliation from Canada could push rates even higher.
However, Trump left the door open for possible revisions. “If Canada works with me to stop the flow of Fentanyl, we will, perhaps, consider an adjustment to this letter,” he said, adding that tariffs “may be modified, upward or downward, depending on our relationship.”
Canadian companies that move operations to the U.S. would be exempt, Trump said, noting his administration “will do everything possible to get approvals quickly, professionally, and routinely — In other words, in a matter of weeks.”
The U.S. traded over $762 billion in goods with Canada in 2024, with a trade deficit of $63.3 billion, a figure Trump called a “major threat” to both the economy and national security.
Speaking with NBC News on Thursday, Trump suggested even broader tariff hikes are coming, floating the idea of a 15% or 20% blanket rate on all imports. “We’re just going to say all of the remaining countries are going to pay,” he told Meet the Press moderator Kristen Welker, adding that “the tariffs have been very well-received” and noting that the stock market had hit new highs that day.
The Canadian announcement is part of a broader global tariff rollout. In recent days, Trump has notified at least 23 countries of new levies and revealed a separate 50% tariff on copper imports.
“Not everybody has to get a letter,” Trump said when asked if other leaders would be formally notified. “You know that. We’re just setting our tariffs.”
From LifeSiteNews
By Dan Frieth
In his letter dated July 9, 2025, addressed to President Luiz Inácio Lula da Silva, Trump ties new U.S. trade measures directly to Brazilian censorship.
U.S. President Donald Trump has launched a fierce rebuke of Brazil’s moves to silence American-run social media platforms, particularly Rumble and X.
In his letter dated July 9, 2025, addressed to President Luiz Inácio Lula da Silva, Trump ties new U.S. trade measures directly to Brazilian censorship.
He calls attention to “SECRET and UNLAWFUL Censorship Orders to U.S. Social Media platforms,” pointing out that Brazil’s Supreme Court has been “threatening them with Millions of Dollars in Fines and Eviction from the Brazilian Social Media market.”
Trump warns that these actions are “due in part to Brazil’s insidious attacks on Free Elections, and the fundamental Free Speech Rights of Americans,” and states: “starting on August 1, 2025, we will charge Brazil a Tariff of 50% on any and all Brazilian products sent into the United States, separate from all Sectoral Tariffs.” He also adds that “Goods transshipped to evade this 50% Tariff will be subject to that higher Tariff.”
Brazil’s crackdown has targeted Rumble after it refused to comply with orders to block the account of Allan dos Santos, a Brazilian streamer living in the United States.
On February 21, 2025, Justice Alexandre de Moraes ordered Rumble’s suspension for non‑compliance, saying it failed “to comply with court orders.”
Earlier, from August to October 2024, Moraes had similarly ordered a nationwide block on X.
The court directed ISPs to suspend access and imposed fines after the platform refused to designate a legal representative and remove certain accounts.
Elon Musk responded: “Free speech is the bedrock of democracy and an unelected pseudo‑judge in Brazil is destroying it for political purposes.”
By linking censorship actions, particularly those targeting Rumble and X, to U.S. trade policy, Trump’s letter asserts that Brazil’s judiciary has moved into the arena of foreign policy and economic consequences.
The tariffs, he makes clear, are meant, at least in part, as a response to Brazil’s suppression of American free speech.
Trump’s decision to impose tariffs on Brazil for censoring American platforms may also serve as a clear signal to the European Union, which is advancing similar regulatory efforts under the guise of “disinformation” and “online safety.”
With the EU’s Digital Services Act and proposed “hate speech” legislation expanding government authority over content moderation, American companies face mounting pressure to comply with vague and sweeping takedown demands.
By framing censorship as a violation of U.S. free speech rights and linking it to trade consequences, Trump is effectively warning that any foreign attempt to suppress American voices or platforms could trigger similar economic retaliation.
Reprinted with permission from Reclaim The Net.
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