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24 facts for 2024—Canadians should understand impact of government policies

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8 minute read

From the Fraser Institute

By Niels Veldhuis

With a better understanding of the impact of government policies, Canadians will be better able to hold politicians accountable and make informed decisions at the ballot box. With the calendar now turned to 2024, here are 24 facts for Canadians to consider.

Canada’s Economic Crisis

  1. Average per-person incomes in Canada have stagnated from 2016 ($54,154) to 2022 ($55,863). Meanwhile, the United States has seen an increase from $65,792 to $73,565. The average Canadian now earns $17,700 less annually than the average American.
  2. Canada ranks just below Louisiana ($57,954) in average per-person income and slightly ahead Kentucky ($54,671). Is this the company we want to keep?
  3. According to the Organisation for Economic Co-operation and Development, Canada will be the worst-performing advanced economy from 2020 to 2030 and from 2030 to 2060.
  4. Canada’s economic growth crisis is due in large part to the decline in business investment. Business investment per worker in Canada declined by 20 per cent since 2014, from $18,363 to $14,687.
  5. In 2014, Canada invested about 79 cents per worker for every dollar invested in the United States—in 2021, investment was 55 cents for every U.S. dollar.
  6. We’ve witnessed a massive flight of capital from Canada since 2014, to the tune of more than $285 billion.
  7. From the onset of the COVID recession in February 2020 to June 2023, the number of government jobs across the country increased by 11.8 per cent compared to only 3.3 per cent in the private sector (including the self-employed).

Fiscal Crisis: Imprudent Spending and Massive Deficits

  1. The Trudeau government has increased annual spending (not including interest payments on its debt) by nearly 75 per cent since 2014, from $256 billion in 2014-15 to a projected $453 billion in 2023-24.
  2. With federal spending at nearly $11,500 per Canadian, the Trudeau government is on track to record the five highest levels of per-person spending in Canadian history.
  3. A large portion of government spending in Canada goes to pay for the 4.1 million federal, provincial and local government employees. Government employees across Canada—including federal, provincial and municipal workers—are paid 31.3 per cent higher wages (on average) than workers in the private sector. Even after adjusting for differences (education, tenure, type of work, occupation, etc.) government employees are still paid 8.5 per cent higher wages.
  4. The Trudeau government has used large increases in borrowing and tax increases to finance this spending. Federal debt has ballooned to $1.9 trillion (2022-23) will reach a projected $2.4 trillion by 2027/28.
  5. Combined federal and provincial debt in Canada has nearly doubled from $1.18 trillion in 2007/08 (the year before the last recession) to a projected $2.18 trillion this year.Infographic 1

Tax Increases and Canada’s Affordability Crisis

  1. To pay for all this spending, the total tax bill for the average Canadian family was $48,199 or 45.3 per cent per cent of its income—more than what the average family spends on housing, food and clothing combined.Infographic 2
  2. Housing and grocery costs dominated the news last year but in 2022 the average family spent $1,452 more on housing and $996 more on food while governments extracted an extra $4,566 from the average family in taxes.
  3. While the federal government has claimed it “cut taxes for middle-class Canadians everywhere,” in reality 86 per cent of middle-class families in Canada are paying higher income taxes under the government’s personal income tax changes. And that doesn’t account for carbon taxes, etc.
  4. More than 60 per cent of lower-income families (those in the bottom 20 per cent of earners) in Canada now pay higher federal income taxes because of the federal government’s tax changes.
  5. Seventy-four per cent of Canadians surveyed believe the average family is being overtaxed by the federal, provincial and local governments.

Damaging Energy and Environment Policy

  1. In the federal government, there’s a common belief that the Canadian economy is undergoing a fundamental and rapid transition towards “clean/green” industries. Yet despite massive regulations and subsidies, Statistics Canada data shows that Canada’s “green” economy amounts to only about 3 per cent of gross domestic product (GDP) and directly employs roughly 1.6 per cent of all jobs.
  2. The recent United Nations climate change conference pushed for a “transition away from fossil fuels.” Despite significant spending on “clean energy”, from 1995 to 2022, the amount of fossil fuels (oil, gas and coal) consumed worldwide actually increased by nearly 59 per cent.
  3. Canada has an opportunity to serve the world with its energy and resources and, in doing so, benefit our allies and improve both world energy security and the environment. But the federal government doesn’t see it that way. How else could one explain the latest singling out of Canada’s oil and gas sector through an arbitrary cap on greenhouse gas emissions, even though the sector only represents 26 per cent of Canada’s total GHG emissions? Even if Canada eliminated all greenhouse gas emissions expected from the oil and gas sector in 2030, the reduction would equal only 0.004 per cent of global emissions while imposing huge costs.Infographic 3
  4. As a result of new federal energy efficiency regulations, the cost of a newly constructed home in Canada will increase by $55,000, on average, by 2030 because of the federal government’s stricter energy efficiency regulations for buildings. Rather than increasing the costs of new homes, governments should help close the gap between supply and demand.

Our Failing Health-Care System

  1. How good is our health-care system? Canada’s average health-care wait times hit 27.7 weeks in 2023—the longest ever recorded and nearly 200 per cent longer than the 9.3 weeks in 1993 when the Fraser Institute began tracking wait times.
  2. Among a group of 30 high-income countries that have universally accessible health care, Canada spends the most money on health care as a percentage of GDP.
  3. Despite this high spending, we are a poor performer. Among this group, Canada had the longest wait lists and ranked:
    • 28th (out of 30) for the number of doctors
    • 23rd (out of 29) for the number of hospital beds available
    • 23rd (out of 29) for the number of psychiatric beds available
    • 25th (out of 29) for the number of MRI machines
    • 26th (out of 30) for CT scanners

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Economy

ESG rankings have no significant effect on investment performance of Canadian public companies

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From the Fraser Institute

By Steven Globerman

Despite claims to the contrary, the ESG rankings of publicly-traded Canadian companies have no significant effect on investment returns, finds a new study published today by the Fraser Institute, an independent, non-partisan Canadian
public policy think-tank.

“While government regulators and some industry executives promote the benefits of ESG investing, there’s no evidence of significant advantages for investors,” said Steven Globerman, senior fellow at the Fraser Institute and author of ESG Investing and Financial Returns in Canada.

Environmental, social and governance (ESG) is a movement designed to pressure businesses and investors to pursue larger social goals. In Canada, due to government securities regulation, publicly-traded companies must disclose ESG-related
information on a range of issues including environmental impact, human rights, and equity and inclusion.

ESG advocates claim that government-mandated ESG disclosures improve the financial performance of companies.
However, the study—the first empirical analysis of the relationship between changes in the ESG rankings of Canadian publicly-traded companies and equity returns— tracked 310 companies on the Toronto Stock Exchange from 2013 to 2022 and found no significant relationship between changes in ESG ranking (upgrades or downgrades) and financial returns, as measured by the price of shares and dividend income.

In other words, advocates for greater ESG disclosures cannot accurately claim—based on Canadian evidence—that requiring companies to provide more information for ESG rankings will significantly affect the financial performance of Canadian
investors.

“Better performance on ESG rankings simply does not translate into better financial performance for Canadian firms,” Globerman said.

  • ESG investing incorporates environmental (E), social (S), and governance (G) considerations into investment decisions. Until recently, ESG-themed investing comprised an increasing share of investments made by professional money managers and retail investors.
  • Financial industry executives and regulators who have promoted ESG-themed investing argue that it will enhance investment performance either by increasing asset returns and/or by reducing investment risk.
  • However, empirical studies, on balance, find no consistent and statistically significant evidence of a positive relationship between the ESG rankings of individual companies or portfolios of companies and the financial performances of those companies or investment portfolios.
  • Most empirical studies have focused on US-based publicly traded companies. To our knowledge, this study is the first to focus on returns to ESG-themed investing for Canadian-based public companies.
  • Using data from MSCI, a leading ESG ratings provider, we estimate the statistical relationship between changes in ESG rankings of companies and changes in equity returns for those companies using a sample of 310 companies listed on the Toronto Stock Exchange between 2013 and 2022.
  • Our study finds that neither upgrades nor downgrades in ESG ratings significantly affect stock market returns.

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Economy

400,000 more Canadians live in poverty now compared to 2020: gov’t report

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From LifeSiteNews

By Anthony Murdoch

A report by the federal government has found that ‘9.9 percent of Canadians, some four million people, live in poverty compared to 6.4 percent in 2020, the equivalent of approximately 400,000 more Canadians.’

Decades of progress in lowering the poverty rate in Canada has been wiped out in the last few years under Prime Minister Justin Trudeau’s Liberal government, one of his own federal departments has reported.

According to Blacklock’s Reporter, a recently released report dated December 11, 2023 by the Department of Social Development “estimates” that “9.9 percent of Canadians, some four million people, live in poverty compared to 6.4 percent in 2020, the equivalent of ‘approximately 400,000 more Canadians,’” and that “[f]uture increases in the rate of poverty could stall progress towards reaching the 2030 poverty reduction target of a 50 percent reduction in poverty versus 2015 levels.” 

The report observed that high inflation in Canada combined with “lagging household incomes” has led to “affordability pressures among many households.” 

While the uptick in the poverty rate is certainly concerning for many Canadians, it may come as little surprise as this is not the first time one of Trudeau’s own departments has warned of such a trend.

In January, the National Advisory Council on Poverty (NACP) observed to Parliament that fast-rising food costs have led to many people feeling a sense of “hopelessness and desperation.”

“Persons with lived expertise of poverty and service providers alike told us things seem worse now than they were before and during the first years of the pandemic,” read the NACP report.  

“We heard that people are worried about the rising cost of living and inflation,” it continued, adding, “More people are in crisis and these crises are more visible in our communities.” 

The damning figures comes as critics, including the nation’s leading taxpayer watchdog, the Canadian Taxpayers Federation, have warned that the Trudeau government’s deficit spending and oft-increasing tax regime has been putting undue strain on the pocketbooks of its citizens.

Previously speaking to LifeSiteNews, CTF federal director Franco Terrazzano urged the Trudeau government to cut spending, balance the budget and “completely scrap” the “carbon tax.”

“More debt means more money wasted on interest charges and less room to cut taxes,” Terrazzano stated, warning that “[i]n a handful of years, every penny collected from the GST (Goods and Service Tax) will go toward paying interest on the debt.”

Under Trudeau, Canadians have seen their overall tax rate go up thanks to the punitive carbon tax that affects all goods and services in the nation. 

Even the Bank of Canada, the nation’s central bank, has taken issue with Trudeau government policy, acknowledging last year that some of its federal “climate change” programs, which have been deemed “extreme” by provincial leaders, are helping to fuel inflation. 

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