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Canada’s Financial Freefall: When Rosy Rhetoric Meets Hard Reality

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This article is from The Opposition With Dan Knight substack.  

The Trudeau Government’s Economic Alchemy: Turning Gold Hopes Into Lead Numbers

Good morning, my fellow Canadians. It’s September 3, 2023, and if you’re expecting to wake up to a bright, financially secure Canada, well, I have some sobering news for you. The latest figures from Statistics Canada are in, and they confirm what many of us have suspected: the Canadian economy is not on the up-and-up. Despite the rosy pictures painted by Prime Minister Justin Trudeau and Finance Minster Chrystia Freeland, the real numbers don’t lie, and they point to an economic landscape in turmoil. Allow me to break it down for you.

The new Statistics Canada data is in, and it paints a rather bleak picture of the Canadian economy under the watchful eyes of the federal government and Justin Trudeau. Let’s delve into some numbers, shall we? A staggering $16.5 billion in debt was added by Canadian households in the first quarter of this year alone, with $11.2 billion being in mortgage debt. In an environment of 5% interest rates, a rate we haven’t seen for over a decade, this is a financial bomb waiting to explode.

And let’s not forget inflation. Since 2021, we’ve seen a cumulative inflation rate of around 16.5%. Now, remember, these aren’t just abstract numbers on a ledger somewhere; these are realities hitting your grocery bills, your gas prices, your rents, and slowly emptying your wallets. But it’s not just households feeling the pinch. The economy as a whole is stalling, with real GDP nearly unchanged in the second quarter of 2023, following a measly 0.6% rise in the first quarter.

Amidst all this, Justin Trudeau and the federal government seem content piling on debt like there’s no tomorrow. The Parliamentary Budget Officer’s March 2023 report shows Canada’s deficit is expected to rise to $43.1 billion in 2023-24, up from $36.5 billion in 2022-23. And let’s not forget that 1 out of every 5 dollars in this debt spree didn’t even exist pre-pandemic. Essentially, we’re spending money we don’t have, to solve problems we’re not solving, all while making new ones.

So, where has all this spending gone? Not into securing a robust future for Canadians, I can tell you that. Despite the monumental deficits and the reckless spending, housing investment fell 2.1% in the second quarter,marking its fifth consecutive quarterly decrease. Canadians are struggling to make ends meet, and the government’s financial imprudence is exacerbating, not alleviating, the situation.

But here’s a twist to the story: while investments in housing decline, Justin Trudeau decided it was prime time to open the floodgates of immigration. There’s an aspect of governance called planning, something that seems foreign to this administration. How does one justify allowing over a million immigrants into Canada without even hinting at a solution for housing them? The result is basic economics – demand outstrips supply, and prices soar.

Remember the days before Trudeau’s reign, when the average home in Canada cost around $400,000? Eight years under his watch and that figure has doubled. Trudeau’s policies seem like a cruel jest to young families, professionals, and, frankly, anyone aspiring to own a piece of the Canadian dream. It’s almost as if he expected the housing market to “balance itself”.

And before you think this is just a ‘rough patch,’ let me remind you that household spending is also slowing. So not only are Canadians going into debt, but they’re also cutting back on spending. They’re being hit from both sides, and there’s no end in sight. The government’s promises of prosperity seem increasingly hollow when we see that per capita household spending has declined in three of the last four quarters.

The Trudeau administration’s approach to governing appears to be in a parallel universe, one where debt is limitless, and financial responsibilities are for the next government or even the next generation to sort out. And don’t even get me started on the higher taxes lurking around the corner to pay off this bonanza of spending. This isn’t governance; it’s financial negligence.

When Canadians were told that this level of inflationary spending could turn our country into something akin to Venezuela, many scoffed at the idea. But let’s face it: the signs are becoming hard to ignore. The truth is, many Canadians have been led to believe they can have gold-plated social services without paying an ounce of gold in taxes. Prime Minister Justin Trudeau seemed more than happy to sell that narrative. He promised a utopia, a social safety net woven from dreams and aspirations. But what has that net caught? Rising costs, crippling debt, and a harder life for everyday Canadians.

Trudeau has turned out to be less a responsible steward of the economy and more of a Pied Piper, leading us all off a fiscal cliff while playing a cheerful tune. Or perhaps he’s more like the Cheshire Cat from “Alice in Wonderland,” grinning broadly as he disappears, leaving behind only his grin and a trail of false promises.

As we approach the pivotal year of 2025, don’t forget who sold you this bill of goods. Remember the skyrocketing costs of living, the unmanageable debt, and the empty words that were supposed to make everything better. I, for one, certainly won’t forget. And I suspect, come election time, neither will you.

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Trump: “I HAVE JUST SIGNED THE BILL TO RELEASE THE EPSTEIN FILES!”

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President Trump moved Wednesday to end years of secrecy surrounding one of the nation’s most notorious scandals, signing legislation that compels the Department of Justice to hand Congress virtually every scrap of material tied to Jeffrey Epstein. The president announced the move on Truth Social, writing, “I HAVE JUST SIGNED THE BILL TO RELEASE THE EPSTEIN FILES!”

Trump reminded supporters that he personally pressed House Speaker Mike Johnson and Senate Majority Leader John Thune to fast-track the legislation. “Because of this request, the votes were almost unanimous in favor of passage,” he wrote, pointing to the rare level of bipartisan agreement behind a bill that forces unprecedented transparency. The Epstein Files Transparency Act requires the DOJ to deliver all unclassified records — and as much classified material as possible — to Congress within 30 days. It also directs Attorney General Pam Bondi to provide lawmakers with a list of government officials and other “politically exposed persons” tied to Epstein within just 15 days.

The measure sailed through the House in a staggering 427–1 vote Tuesday before clearing the Senate unanimously. Its path to passage wasn’t always straightforward. For months, the Trump administration had sparred with lawmakers pushing for the release, with the president often calling the frenzy around “Epstein files” a Democrat-driven hoax designed to smear him.

In his Truth Social post, Trump leaned into the history, reminding Americans that Epstein “was charged by the Trump Justice Department in 2019 (Not the Democrats!)” and that the disgraced financier “was a lifelong Democrat” who poured money into Democrat campaigns. The president also pointed to Epstein’s well-documented relationships with high-profile Democrats, listing figures such as Bill Clinton — “who traveled on his plane 26 times” — former Treasury Secretary Larry Summers, activist billionaire Reid Hoffman, House Minority Leader Hakeem Jeffries, and Delegate Stacey Plaskett. “Perhaps the truth about these Democrats, and their associations with Jeffrey Epstein, will soon be revealed,” Trump wrote.

He added that the DOJ, under his direction, has already provided Congress nearly 50,000 pages of Epstein-related material — a stark contrast, he said, to the Biden administration, which “did not turn over a SINGLE file or page related to Democrat Epstein, nor did they ever even speak about him.”

For Trump, the transparency push is as much about exposing what Democrats don’t want voters to see as it is about delivering documents. He argued that the left had leaned on “the ‘Epstein’ issue” to distract from the “AMAZING Victories” of his administration. Now, with the bill signed and agencies under a firm deadline, he predicted the political tables are about to turn.

“This latest Hoax will backfire on the Democrats just as all of the rest have!” he wrote — a warning, and a promise, as Washington braces for whatever the next 30 days will reveal.

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Canada is failing dismally at our climate goals. We’re also ruining our economy.

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From the Fraser Institute

By Annika Segelhorst and Elmira Aliakbari

Short-term climate pledges simply chase deadlines, not results

The annual meeting of the United Nations Conference of the Parties, or COP, which is dedicated to implementing international action on climate change, is now underway in Brazil. Like other signatories to the Paris Agreement, Canada is required to provide a progress update on our pledge to reduce greenhouse gas (GHG) emissions by 40 to 45 per cent below 2005 levels by 2030. After decades of massive government spending and heavy-handed regulations aimed at decarbonizing our economy, we’re far from achieving that goal. It’s time for Canada to move past arbitrary short-term goals and deadlines, and instead focus on more effective ways to support climate objectives.

Since signing the Paris Agreement in 2015, the federal government has introduced dozens of measures intended to reduce Canada’s carbon emissions, including more than $150 billion in “green economy” spending, the national carbon tax, the arbitrary cap on emissions imposed exclusively on the oil and gas sector, stronger energy efficiency requirements for buildings and automobiles, electric vehicle mandates, and stricter methane regulations for the oil and gas industry.

Recent estimates show that achieving the federal government’s target will impose significant costs on Canadians, including 164,000 job losses and a reduction in economic output of 6.2 per cent by 2030 (compared to a scenario where we don’t have these measures in place). For Canadian workers, this means losing $6,700 (each, on average) annually by 2030.

Yet even with all these costly measures, Canada will only achieve 57 per cent of its goal for emissions reductions. Several studies have already confirmed that Canada, despite massive green spending and heavy-handed regulations to decarbonize the economy over the past decade, remains off track to meet its 2030 emission reduction target.

And even if Canada somehow met its costly and stringent emission reduction target, the impact on the Earth’s climate would be minimal. Canada accounts for less than 2 per cent of global emissions, and that share is projected to fall as developing countries consume increasing quantities of energy to support rising living standards. In 2025, according to the International Energy Agency (IEA), emerging and developing economies are driving 80 per cent of the growth in global energy demand. Further, IEA projects that fossil fuels will remain foundational to the global energy mix for decades, especially in developing economies. This means that even if Canada were to aggressively pursue short-term emission reductions and all the economic costs it would imposes on Canadians, the overall climate results would be negligible.

Rather than focusing on arbitrary deadline-contingent pledges to reduce Canadian emissions, we should shift our focus to think about how we can lower global GHG emissions. A recent study showed that doubling Canada’s production of liquefied natural gas and exporting to Asia to displace an equivalent amount of coal could lower global GHG emissions by about 1.7 per cent or about 630 million tonnes of GHG emissions. For reference, that’s the equivalent to nearly 90 per cent of Canada’s annual GHG emissions. This type of approach reflects Canada’s existing strength as an energy producer and would address the fastest-growing sources of emissions, namely developing countries.

As the 2030 deadline grows closer, even top climate advocates are starting to emphasize a more pragmatic approach to climate action. In a recent memo, Bill Gates warned that unfounded climate pessimism “is causing much of the climate community to focus too much on near-term emissions goals, and it’s diverting resources from the most effective things we should be doing to improve life in a warming world.” Even within the federal ministry of Environment and Climate Change, the tone is shifting. Despite the 2030 emissions goal having been a hallmark of Canadian climate policy in recent years, in a recent interview, Minister Julie Dabrusin declined to affirm that the 2030 targets remain feasible.

Instead of scrambling to satisfy short-term national emissions limits, governments in Canada should prioritize strategies that will reduce global emissions where they’re growing the fastest.

Annika Segelhorst

Junior Economist

Elmira Aliakbari

Elmira Aliakbari

Director, Natural Resource Studies, Fraser Institute
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