With our economy becalmed, Good Ship Canada needs a new captain

From the MacDonald Laurier Institute

Output has been stagnant for five years now. Canada is ‘as idle as a painted ship upon a painted ocean’

One of my favourite poems is Samuel Coleridge’s “The Rime of the Ancient Mariner.” It describes a ship driven by storms towards the South Pole. An albatross saves the ship and crew but the Ancient Mariner kills it, an act of cruelty for which he is later punished, including by having to repeat the story to strangers for the rest of his life.

It is the verse “Day after day, day after day,/ We stuck, nor breath nor motion;/ As idle as a painted ship/ Upon a painted ocean” that became one of my favourites. It comes back to me periodically when life seems stalled.

Which is the case with Canada these days. Our economy is at a standstill. Interest rates are up and inflation, though trending down, remains stubbornly high. Real GDP growth these past four quarters (August 2022 to August 2023) was a feeble 0.9 per cent. Any growth we do have is from a policy-driven population expansion of close to three per cent. But per capita GDP actually fell 2.1 per cent over that period, which means Canadians are poorer today than they were a year ago.

And it’s not just this year. Canada has been a “painted ship on a painted ocean” for some time. From January 2018 to June of this year, our GDP per capita was flat, according to OECD data released this week. Add in July and August and Canada’s per capita real GDP has declined slightly — from $52,300 in January 2018 to $51,900 in August (in 2012 dollars).

With the pandemic and surging inflation after 2020, you might think other countries’ economies are also becalmed. But they aren’t. U.S. per capita real GDP is up 2.4 per cent over the past year and up 9.3 per cent since January 2018, from US$61,500 to US$67,200 (again in 2012 dollars). At today’s exchange rate, Canada’s per capita GDP is now just 56 per cent of America’s — ouch!

Nor is it just the U.S. we’re slipping behind. Compared to our own slight decline in real per capita GDP since 2018, the OECD average is up 5.6 per cent, though there’s considerable variation across countries. For example, resource-rich Australia’s real per capita GDP was up only 4.8 per cent — which was still better than here — but superstar Ireland’s was up fully 31.0 per cent.

Let’s face it: Sir Wilfrid Laurier’s famous 1904 prediction that “For the next 100 years, Canada shall be the star towards which all men who love progress and freedom shall come” seems hollow these days. It is not that we don’t have the potential to shine; it’s that we so often fail to. We do still attract immigrants, but they often leave — as much as 20 per cent of a cohort over 25 years according to the Conference Board. And if salaries here keep falling behind those in the U.S., will we still be able to attract the best and brightest?

Canada has always been a trading nation but exports as a share of GDP have been relatively flat this past decade. The oil and gas sector has been our most important source of export earnings, surpassing even motor vehicles and parts, but since 2015 the Trudeau government has actively discouraged its growth.

We have had our share of innovations over the years but R&D spending has slipped back to the same share of GDP as it was in 1998. It seems the only way for Canada to develop new things is to subsidize them to the hilt with multi-billion grants like the ones given this past year to three different battery manufacturers.

Our health-care system is a shambles, with long waiting lines and not enough doctors and health professionals. One index ranks Canada’s health system as only 32nd best among 166 countries (with Singapore, Japan, South Korea, Taiwan and Israel ranking highest). We know what the problems are, but we seemingly don’t have the will to fix them.

Our tax system is a mess, with high rates and far too many ineffective incentives. Canada now has one of the highest top personal income tax rates in the world but applies it at much lower incomes than elsewhere, beginning at only twice the average wage. One important driver of U.S. growth was the Tax Cuts and Jobs Act of 2017, which bolstered investment by 20 per cent, as shown in important research released last month.

We are a free rider in defence and security spending, at only 1.29 per cent of GDP, well below the minimum two per cent needed to fulfil our NATO obligations. Our financial contribution to modernize NORAD is lacking despite the growing importance of the Arctic to Russia and China. We have contributed little in the way of advanced weaponry or tanks to our allies in Eastern Europe or the Middle East. Europe is desperate for natural gas but instead of buying it from us it is having to import it from Qatar.

While regional tensions have always been a major part of Canadian history, we seem to have lost all sight of nation-building. National infrastructure projects are absent. Provincial trade barriers undermine internal growth but are hard to remove. Alberta, angry with a federal government intent on shackling its energy industry, is ready to pull out of the national social security system. Quebec is drastically hiking tuition fees on students from the rest of Canada who attend its anglophone universities.

To fulfill its remarkable potential, this country cannot remain a painted ship upon a painted ocean. Someone needs to move the ship forward.

Related Topics:#CanadaNeedsANewCaptain #GDP #JackMintz #MacdonaldLaurierInstitute #PerCapitaRealGDP #Stagnation economy

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Saskatchewan becomes first Canadian province to fully eliminate carbon tax

Published on April 1, 2025

Todayville

From LifeSiteNews

By Clare Marie Merkowsky

Saskatchewan has become the first Canadian province to free itself entirely of the carbon tax.

On March 27, Saskatchewan Premier Scott Moe announced the removal of the provincial industrial carbon tax beginning April 1, boosting the province’s industry and making Saskatchewan the first carbon tax free province.

“The immediate effect is the removal of the carbon tax on your Sask Power bills, saving Saskatchewan families and small businesses hundreds of dollars a year. And in the longer term, it will reduce the cost of other consumer products that have the industrial carbon tax built right into their price,” said Moe.

Under Moe’s direction, Saskatchewan has dropped the industrial carbon tax which he says will allow Saskatchewan to thrive under a “tariff environment.”

“I would hope that all of the parties running in the federal election would agree with those objectives and allow the provinces to regulate in this area without imposing the federal backstop,” he continued.

The removal of the tax is estimated to save Saskatchewan residents up to 18 cents a liter in gas prices.

The removal of the tax will take place on April 1, the same day the consumer carbon tax will reduce to 0 percent under Prime Minister Mark Carney’s direction. Notably, Carney did not scrap the carbon tax legislation: he just reduced its current rate to zero. This means it could come back at any time.

Furthermore, while Carney has dropped the consumer carbon tax, he has previously revealed that he wishes to implement a corporation carbon tax, the effects of which many argued would trickle down to all Canadians.

The Saskatchewan Association of Rural Municipalities (SARM) celebrated Moe’s move, noting that the carbon tax was especially difficult on farmers.

“It puts our farming community and our business people in rural municipalities at a competitive disadvantage, having to pay this and compete on the world stage,” he continued.

“We’ve got a carbon tax on power — and that’s going to be gone now — and propane and natural gas and we use them more and more every year, with grain drying and different things in our farming operations,” he explained.

“I know most producers that have grain drying systems have three-phase power. If they haven’t got natural gas, they have propane to fire those dryers. And that cost goes on and on at a high level, and it’s made us more noncompetitive on a world stage,” Huber decalred.

The carbon tax is wildly unpopular and blamed for the rising cost of living throughout Canada. Currently, Canadians living in provinces under the federal carbon pricing scheme pay $80 per tonne.

Automotive

Electric cars just another poor climate policy

Published on April 1, 2025

Todayville

From the Fraser Institute

By Bjørn Lomborg

The electric car is widely seen as a symbol of a simple, clean solution to climate change. In reality, it’s inefficient, reliant on massive subsidies, and leaves behind a trail of pollution and death that is seldom acknowledged.

We are constantly reminded by climate activists and politicians that electric cars are cleaner, cheaper, and better. Canada and many other countries have promised to prohibit the sale of new gas and diesel cars within a decade. But if electric cars are really so good, why would we need to ban the alternatives?

And why has Canada needed to subsidize each electric car with a minimum $5,000 from the federal government and more from provincial governments to get them bought? Many people are not sold on the idea of an electric car because they worry about having to plan out where and when to recharge. They don’t want to wait for an uncomfortable amount of time while recharging; they don’t want to pay significantly more for the electric car and then see its used-car value decline much faster. For people not privileged to own their own house, recharging is a real challenge. Surveys show that only 15 per cent of Canadians and 11 per cent of Americans want to buy an electric car.

The main environmental selling point of an electric car is that it doesn’t pollute. It is true that its engine doesn’t produce any CO₂ while driving, but it still emits carbon in other ways. Manufacturing the car generates emissions—especially producing the battery which requires a large amount of energy, mostly achieved with coal in China. So even when an electric car is being recharged with clean power in BC, over its lifetime it will emit about one-third of an equivalent gasoline car. When recharged in Alberta, it will emit almost three-quarters.

In some parts of the world, like India, so much of the power comes from coal that electric cars end up emitting more CO₂ than gasoline cars. Across the world, on average, the International Energy Agency estimates that an electric car using the global average mix of power sources over its lifetime will emit nearly half as much CO₂ as a gasoline-driven car, saving about 22 tonnes of CO₂.

But using an electric car to cut emissions is incredibly ineffective. On America’s longest-established carbon trading system, you could buy 22 tonnes of carbon emission cuts for about $660 (US$460). Yet, Ottawa is subsidizing every electric car to the tune of $5,000 or nearly ten times as much, which increases even more if provincial subsidies are included. And since about half of those electrical vehicles would have been bought anyway, it is likely that Canada has spent nearly twenty-times too much cutting CO₂ with electric cars than it could have. To put it differently, Canada could have cut twenty-times more CO₂ for the same amount of money.

Moreover, all these estimates assume that electric cars are driven as far as gasoline cars. They are not. In the US, nine-in-ten households with an electric car actually have one, two or more non-electric cars, with most including an SUV, truck or minivan. Moreover, the electric car is usually driven less than half as much as the other vehicles, which means the CO₂ emission reduction is much smaller. Subsidized electric cars are typically a ‘second’ car for rich people to show off their environmental credentials.

Electric cars are also 320–440 kilograms heavier than equivalent gasoline cars because of their enormous batteries. This means they will wear down roads faster, and cost societies more. They will also cause more air pollution by shredding more particulates from tire and road wear along with their brakes. Now, gasoline cars also pollute through combustion, but electric cars in total pollute more, both from tire and road wear and from forcing more power stations online, often the most polluting ones. The latest meta-study shows that overall electric cars are worse on particulate air pollution. Another study found that in two-thirds of US states, electric cars cause more of the most dangerous particulate air pollution than gasoline-powered cars.

These heavy electric cars are also more dangerous when involved in accidents, because heavy cars more often kill the other party. A study in Nature shows that in total, heavier electric cars will cause so many more deaths that the toll could outweigh the total climate benefits from reduced CO₂ emissions.

Many pundits suggest electric car sales will dominate gasoline cars within a few decades, but the reality is starkly different. A 2023-estimate from the Biden Administration shows that even in 2050, more than two-thirds of all cars globally will still be powered by gas or diesel.

CanvasJS.com

Source: US Energy Information Administration, reference scenario, October 2023
Fossil fuel cars, vast majority is gasoline, also some diesel, all light duty vehicles, the remaining % is mostly LPG.

Electric vehicles will only take over when innovation has made them better and cheaper for real. For now, electric cars run not mostly on electricity but on bad policy and subsidies, costing hundreds of billions of dollars, blocking consumers from choosing the cars they want, and achieving virtually nothing for climate change.