Business
Understanding the Nature of Canada’s Fiscal and Economic Challenges

From the Fraser Institute
By Jake Fuss and Jason Clemens
” between 2016 and 2019 (pre-COVID), growth in per-person GDP (inflation-adjusted) was an anemic 0.9 percent. According to one study, among the last five pre-recession periods in Canadian history, the Trudeau period (again, 2016 to 2019) recorded the weakest economic growth “
The Trudeau government was first elected in 2015 based in part on a new approach to government policy, which promised greater prosperity for Canadians based on short-term deficit spending (totaling $25.1 billion over three years), lower taxes for most Canadians (except higher-income earners), and a more active approach to economic development (LPC, 2015). This new policy direction stood in stark contrast to the consensus of the previous 20 years (Clemens and Palacios, 2017). The result has been a marked deterioration in the country’s finances, economic stagnation, and a collapse in business investment. If Canada is to restore its fiscal and economic health, Ottawa must enact fundamental policy reform.
Government spending, taxes, and debt
The Trudeau government has markedly increased spending to finance both new programs and increases in existing programs. Federal spending (excluding interest costs) increased from $256.3 billion in 2014-15 (the year before the Trudeau government took office) to $448.2 billion in 2022-23 (an increase of 74.9 percent) (Canada, 2023a) and a projected $453.0 billion in 2023-24 (Canada, 2023b). Not surprisingly, COVID-related spending contributed to increases in 2019-20 to 2021-22. But in 2022-23 and thereafter, there is no COVID-related spending.
The federal government has used tax increases and large increases in borrowing to finance these spending increases. In 2016, the federal government increased the top personal income tax rate imposed on entrepreneurs, professionals , and business owners from 29 percent to 33 percent. Consequently, the combined top personal income tax rate (federal and provincial) now exceeds 50 percent in eight provinces (with the remaining provinces only slightly below 50 percent) and in 2022 Canada had the 5th highest tax rate out of 38 OECD countries. This represents a serious competitive challenge for Canada’s ability to attract and retain entrepreneurs, investors, skilled professionals, and businesses.
And while the Trudeau government reduced the middle personal income tax rate, it also eliminated several tax credits. The combination of the two policy changes means that 86 percent of middle-income families now pay higher personal income taxes (Palacios et al., 2022). If the analysis also includes increases to the Canada Pension Plan contribution rate, almost all Canadians now pay higher taxes.
The Trudeau government also borrowed to finance its new spending. Figure 1 contrasts the originally
planned deficits with the actual deficits incurred by the Trudeau government (excluding COVID-related
spending) from 2016-17 to 2022-23. The actual borrowing exceeds the originally planned borrowing
every year (except 2021-22), often by significant margins, due to the government’s inability to control
spending growth.
The string of deficits means federal debt (measured as gross debt) has ballooned to $1.9 trillion
(2022-23) and is projected to reach $2.4 trillion by 2027/28, fueling a dramatic growth in interest costs,
which have grown by 53.2 percent (inflation-adjusted) between 2014/15 and 2023/24 and will reach
a projected $46.5 billion in 2023/24. Interest costs now consume substantial revenue that is then unavailable for government services or tax reduction.
Simply put, Trudeau government policy changes have produced large increases in government spending, taxes, and borrowing. Unfortunately, these policy changes have not resulted in a more robust and vibrant economy.
Weak economic growth and collapsing business investment
The broadest measure of living standards is GDP per person, which calculates the total value of all goods and services produced in the economy in a given year (adjusted by the population). As illustrated in Figure 2, between 2016 and 2019 (pre-COVID), growth in per-person GDP (inflation-adjusted) was an anemic 0.9 percent. According to one study, among the last five pre-recession periods in Canadian history, the Trudeau period (again, 2016 to 2019) recorded the weakest economic growth (Clemens, Palacios, and Veldhuis, 2021). Another study found that Canada’s per-person GDP growth from 2013 to 2022 was the weakest on record since the 1930s (Cross, 2023). And per-person GDP in 2022 (inflation-adjusted) had still not recovered from the pandemic losses and was basically stagnant at 2018 levels (see figure 2).
Prospects for the future, given current policies, are not encouraging. The OECD projects that Canada will record the lowest rate of per-person GDP growth among 32 advanced economies from 2020 to 2030 and from 2030 to 2060(OECD, 2021).Countries such as Estonia, South Korea, and New Zealand are expected to vault past Canada and achieve higher living standards by 2060.
According to a recent analysis, Canada’s economic growth crisis is due in part to the decline in business investment, which is critical to increasing living standards because it equips workers with tools and technologies to produce more higher-quality goods and services. This, in turn, fuels innovation and improved productivity (Cross, 2023). There are obvious explanations for the decline in business investment including regulatory barriers, particularly related to the energy and mining sectors (Globerman and Emes, 2021), and government deficits, which imply tax increases in the future, dampening investment today. Business investment (inflation-adjusted), excluding residential construction, has declined by 1.8 percent annually since 2014.
According to a 2023 study (Hill and Emes, 2023), between 2014 and 2021, business investment per worker (inflation-adjusted, excluding residential construction) decreased by $3,676 (to $14,687) compared to growth of $3,418 (to $26,751) in the United States. Put differently, in 2014, Canadian
businesses invested 79 cents per worker for every dollar invested in the United States. By 2021, that level of investment had declined to just 55 cents per worker.
Moreover, the amount of investment in Canada by foreigners has decreased while the amount of investment by Canadians outside of the country has increased. In 2008, the two levels were roughly comparable—$65.7 billion in foreign direct investment (FDI) in Canada vs. $84.6 billion in investment by Canadians outside of the country. However, a sizeable change began in 2015; by 2022, the amount of FDI ($64.6 billion) was significantly smaller than the amount of investment by Canadians outside the country ($102.3 billion).
Finally, while Canada’s labour market has consistently demonstrated its strength and resilience, the labour market numbers hide some concerning trends. For example, between February 2020 (when the pandemic began) and June 2023, private-sector job creation (net) was fairly weak at 3.3 percent compared to 11.8 percent job growth in the government sector (Eisen, Ryan and Palacios, 2023). In other words, the recovery and growth in the private sector following the pandemic has not been as strong as expected.
Conclusion: The Path Forward
There is reason for optimism, however, since many of Canada’s challenges are of the federal government’s own making. The Chrétien Liberals in the 1990s faced many of the same challenges that we do today (Veldhuis, Clemens, and Palacios, 2011). By shifting the focus to more prudent government spending, balanced budgets, debt reduction, and competitive tax rates, the Chrétien Liberals—followed in large measure by the Harper Tories—paved the way for two decades of prosperity when Canada outperformed other OECD countries on economic growth, job-creation, and business investment.
To help foster greater prosperity for Canadians today, the federal government can learn from the Chrétien Liberals, and the Harper Tories. The rest of this series identifies policy options that can increase living standards for Canadians by repairing federal finances, improving tax competitiveness, and lowering economic barriers. These reforms could help build a more prosperous country through the creation of good jobs which would lead to rising incomes for Canadians.
Authors:
Business
Elon Musk says X targeted by “massive cyberattack” originating in Ukraine

MxM News
Quick Hit:
Elon Musk revealed Monday that X was the target of a “massive cyberattack,” with IP addresses linked to the Ukraine region. Musk noted the attack was highly coordinated and suggested it could involve a large group or a nation-state.
Key Details:
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Speaking to Fox Business’ Larry Kudlow, Musk said, “We’re not exactly sure what happened, but there was a massive cyberattack to try to bring down the ecosystem with IP addresses originating in the Ukraine area.”
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Earlier Monday, Musk posted about the attack on X, stating, “There was (still is) a massive cyberattack against X,” adding that the platform faces daily attacks but this one was particularly well-resourced.
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Musk, who acquired X (formerly Twitter) for $44 billion in October 2022, has faced increasing pressure as his companies, including Tesla and SpaceX, deal with coordinated protests that he alleges are backed by left-wing billionaires like George Soros and Reid Hoffman.
Diving Deeper:
X suffered a significant cyberattack Monday, according to its owner Elon Musk. During an interview with Fox Business’ Larry Kudlow, Musk said that while the full details were unclear, the attack sought to “bring down the ecosystem” and had origins tied to the Ukraine region. He suggested the attack was well-funded and likely involved either a large, coordinated group or a nation-state.
Musk had earlier addressed the incident on X, stating that while the platform regularly faces cyber threats, this particular attack was on a different scale. “We get attacked every day, but this was done with a lot of resources,” he wrote, adding that efforts were underway to trace those responsible.
The timing of the cyberattack raises questions, as it comes amid widespread protests against Musk’s other ventures, particularly Tesla. Musk has accused high-profile Democrat donors, including George Soros and LinkedIn co-founder Reid Hoffman, of financing the demonstrations. He has not provided direct evidence to support the claim, but the protests have coincided with an intensifying political battle over Musk’s influence in both the private sector and government.
Musk’s role in the Trump administration as the head of the Department of Government Efficiency has drawn praise from the president. Trump has credited Musk with spearheading efforts to reduce government waste and save taxpayers billions. Meanwhile, Musk’s companies, including SpaceX, hold lucrative contracts with the Department of Defense, making them frequent targets of scrutiny and opposition from political adversaries.
As X continues to investigate the cyberattack, the broader implications remain unclear. Whether a nation-state or an organized cybercriminal group was behind the attack could have significant ramifications, particularly given the geopolitical tensions surrounding Ukraine.
Business
Mark Carney’s Misleading Actions and Non-Disclosure Should Disqualify Him as Canada’s Next Truly “Elected” Prime Minister – Jim Warren

From EnergyNow.Ca
By Jim Warren
If Mark Carney simply told the truth, he wouldn’t have to remember if what he says in Quebec matches what he says in Western Canada.
When speaking in Kelowna on February 12, Mark Carney left the impression he’d been converted from environmental zealot to missionary for an Energy East pipeline.
Carney said he would “use all of the powers of the federal government, including the emergency powers of the federal government, to accelerate the major projects that we need in order to build this economy and take on the Americans.”
Five days later Carney told CBC those emergency powers wouldn’t apply to Quebec. The government of Quebec would have veto power over any pipeline to the east coast. To clear up any possible confusion he repeated his pipeline veto pledge to Quebec at the French debate for the Liberal Leadership.
Apparently tough measures like the “peace, order and good government” clause in the Constitution and the Emergencies Act can be used by Liberals to arrest and seize the bank accounts of truckers who honk horns and cause traffic jams in Ottawa. But they can’t be used to build pipelines across Quebec even if it will reduce the impact of US tariffs on Canada’s economy. Like any good Liberal, Carney knows the interests of Maritimers and the West are of little consequence when his party needs to boost its support in Quebec.
Ironically, the second national poll in the past few months shows a majority of Quebecers support the construction of an East/West pipeline through their province. It is the Central Canadian political elite based in the major cities of Ontario and Quebec and excessively zealous environmental activists who oppose pipelines. And the Liberals are, of course, the party which represents that environmentally sanctimonious elite.
You read it here first.
On January 28, EnergyNow ran a column with the headline: Trump’s Wake-up Call to Canada, Politicians & Activists… The column outlined how the “peace, order and good government’” clause in the Constitution and/or the Emergencies Act could be employed to override regulatory barriers and court injunctions to ensure new pipelines to tidewater are built. The column says the first step in that process will be booting the Liberals from office. That condition still applies, given that Carney’s one-time mention of using “emergency powers” in support of a West to East pipeline turned out to be just one more Liberal lie to Western Canada.
Pierre Poilievre has aptly pegged Mark Carney as a hypocrite whose corporate interests and behavior are in substantial conflict with his environmental virtue signaling. At a House of Commons committee hearing in 2021, Poilievre spanked Carney for supporting the cancellation of the Energy East pipeline, while Brookfield Asset Management, the company he chaired, had bought pipelines in Brazil and the United Arab Emirates.
Poilievre admonished Carney, “You make billions of dollars off foreign pipelines and you shut them down here at home, putting our people out of work.”
More recently Carney misled Canadians about the role he played in moving Brookfield’s head office from Canada to the US. Carney claimed he had absolutely nothing to do with the move despite the fact he was company chairman at the time.
No less egregious is the fact Carney has used a loophole in federal legislation to avoid the financial disclosure rules for cabinet ministers including the prime minister. The disclosure rules help Parliament determine when ministers are involved in conflicts of interest. Carney will soon be crowned prime minister by the Liberals and will technically be exempt from the rule.
Carney is technically exempt because he’s never been elected as an MP. He will be able to avoid making his financial disclosure until 60 days after he is appointed prime minster. This means there is a good chance Carney’s financial information won’t be available well into the run up to a possible spring election.
Poilievre rang the alarm regarding the loophole and plans to introduce legislation as soon as Parliament reopens to fix the problem. He pointed out that there was nothing preventing Carney from being transparent and voluntarily providing the necessary information to Canadians prior to the Liberal leadership vote.
Poilevre was being too kind. A lack of integrity is what’s holding Carney back.
Carney is on record as a firm believer in carbon taxes. In the book he published in 2023 he wrote, “Meaningful carbon prices are the cornerstone of any effective [environmental] policy framework.”
Now, in support of his campaign to become prime minister, Carney promises to get rid of Canada’s unpopular carbon tax. The claim is clearly deceptive. He intends to replace the current tax on consumers with an upstream tax on oil producers and industry. Carney must think Canadians are too dumb to realize the increased upstream tax burden will be passed on to consumers in the form of higher prices for virtually everything they purchase.
When Carney is pressed to explain his carbon tax 2.0, he mumbles his way through an incomprehensible word salad worthy of Kamala Harris.
Also like Harris, Carney avoids campaign events where non-supporters might show up or media appearances and interviews where he might be asked a tough question. His appearance on US late night talk shows hosted by uber-liberals like Jon Stewart are unlikely to generate hard ball questions—the hosts are ignorant about Canadian politics and wouldn’t have a clue about what to ask.
I think Carney knows how bad the Kamala campaign tactics look. He was clearly taken aback by an incident at a campaign event in Regina. A member of the Liberal party who was somehow identified as a closet Conservative was accosted by two security agents and police who ejected him from the meeting. The guy had done nothing untoward—he hadn’t so much as raised his voice. It seems Mark Carney is very precious and must be protected from the public– including Liberal party members who are potentially dangerous because they supported another party in the past.
Where Carney really stands on environmental issues
Mark Carney didn’t just drink the climate alarmist Kool-Aid, he helped make it and wants to serve it to you.
“He’s the father of net-zero on a global basis,” according to Catherine Swift, President of the Canadian Coalition of Concerned Manufacturers and Businesses of Canada.
Carney has been a steadfast supporter of the environmental dogma underlying the Liberal assault on the fortunes of the oil and gas industries including the legislation preventing new pipelines. For years now, he’s been working on the inside of international organizations dedicated to climate change mitigation and greenhouse gas (GHG) emissions reduction.
In December 2019, he was appointed as the very first UN Special Envoy for Climate Action and Finance.
Prior to, during and after his time at the UN Carney has found time to hobnob with the billionaires and national leaders who presumably constitute the global elite. He’s been a regular at the annual World Economic Forum conferences in Davos, Switzerland.
As a member of the forum’s Foundation Board he is a duly qualified member of the modern day Illuminati. He associates with the international bankers who presume to know what’s best for the little people. His promotion of the radical green agenda dovetails nicely with the environmental virtue signaling of the world’s rich and powerful at Davos. They are dedicated to conquering global warming no matter what it costs the rest of us.
At the COP26 conference in 2021 Carney proudly proclaimed he was part of the same social movement as Greta Thunberg. Carney praised Thunberg as the “catalyst” who inspired the youth wing of the environmental movement. I haven’t heard if he’s gone off Greta and her wing of the movement now that she has announced her support for Hamas.
Don Braid recently wrote an insightful column in the Calgary Herald where he proposes that Carney is too deeply embedded in environmental activism and too publicly committed to climate change mitigation and the anti-oil agenda to run away from it when he becomes prime minister. Braid reports what Carney had to say about the environment and the need to abandon natural gas and petroleum in the 600 page door-stopper book he published in 2021, Value(s): Building a Better World for All.
In 2021, Carney was deluded enough to imagine the world’s virtuous emissions cutters would prevent the planet’s average temperature in 2050 from being any higher than 1.5O above what it was in the middle of the 19th century.
Not even serious climate change alarmists like Gwynne Dyer believe that’s remotely possible. The goals of climate zealots like Carney include fanciful, overly ambitious emissions reduction targets. They want change to happen too fast to be affordable for virtually everyone except the sorts of people who hang out at Davos.
In his book, Carney identifies what he believes should happen to the fossil fuel industries. His goals don’t bode well for the future of Canada’s petroleum and gas sectors and can’t help but harm the country’s economy.
Carney writes, “To meet the 1.5o C target, more than 80 per cent of current fossil fuel reserves (including three-quarters of coal, half of gas, one-third of oil)” will need to “stay in the ground, stranding these assets.”
Steven Guilbeault, Canada’s most infamous and politically dangerous environmental extremist backed Carney in the Liberal leadership contest. Guilbeault’s support is in recognition of Carney’s radical record on environmental issues including climate change mitigation.
Nothing to say about Liberal corruption
One of the most disturbing omissions from Carney’s political platform and media coverage of his campaign is any mention of plans for dealing with runaway Liberal cronyism and corruption.
He hasn’t promised to open the books and jail the crooks. He hasn’t promised to release the unredacted evidence of Green Slush Fund corruption. He hasn’t promised to release that evidence and turn it over to Parliament and the RCMP. He hasn’t announced plans for a thorough forensic accounting of Liberal backroom deals. And he hasn’t promised investigations into sweetheart contracts and looting in cases like the ArriveCAN scam.
He can’t do any of the above because it would implicate a number of Liberal insiders and he needed them to support him in the leadership contest. And how will he be able to work with the government caucus if he suggests he wants to get tough with the hogs at the trough? Given that he won’t release his financial information, it could be he doesn’t want to limit his own access to the gravy train.
In the final analysis, you’d have to say Mark Carney is a committed environmental zealot except when it interferes with his business interests or political ambitions.
He appears comfortable giving preference to the environmental extremism of the Davos set over the harm overly zealous climate change policies do to the livelihoods of ordinary Canadians and the country’s economy.
He appears comfortable with hypocrisy and misleading Canadians which clearly qualifies him to lead the Liberal party, but makes for a bad prime minister.
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