Business
Comparing four federal finance ministers in moments of crisis
From the Fraser Institute
By Grady Munro, Milagros Palacios and Jason Clemens
The sudden resignation of federal finance minister (and deputy prime minister) Chrystia Freeland, hours before the government was scheduled to release its fall economic update has thrown an already badly underperforming government into crisis. In her letter of resignation, Freeland criticized the government, and indirectly the prime minister, for “costly political gimmicks” and irresponsible handling of the country’s finances and economy during a period of great uncertainty.
But while Freeland’s criticism of recent poorly-designed federal policies is valid, her resignation, in some ways, tries to reshape her history into that of a more responsible finance minister. That is, however, ultimately an empirical question. If we contrast the performance of the last four long-serving (more than three years) federal finance ministers—Paul Martin (Liberal), Jim Flaherty (Conservative), Bill Morneau (Liberal) and Freeland (Liberal)—it’s clear that neither Freeland nor her predecessor (Morneau) were successful finance ministers in terms of imposing fiscal discipline or overseeing a strong Canadian economy.
Let’s first consider the most basic measure of economic performance, growth in per-person gross domestic product (GDP), adjusted for inflation. This is a broad measure of living standards that gauges the value of all goods and services produced in the economy adjusted for the population and inflation. The chart below shows the average annual growth in inflation-adjusted per-person GDP over the course of each finance minister’s term. (Adjustments are made to reflect the effects of temporary recessions or unique aspects of each minister’s tenure to make it easier to compare the performances of each finance minister.)
Sources: Statistics Canada Table 17-10-0005-01, Table 36-10-0222-01; 2024 Fall Economic Statement
By far Paul Martin oversaw the strongest growth in per-person GDP, with an average annual increase of 2.4 per cent. Over his entire tenure spanning a decade, living standards rose more than 25 per cent.
The average annual increase in per-person GDP under Flaherty was 0.6 per cent, although that includes the financial recession of 2008-09. If we adjust the data for the recession, average annual growth in per-person GDP was 1.4 per cent, still below Martin but more than double the rate if the effects of the recession are included.
During Bill Morneau’s term, average annual growth in per-person GDP was -0.5 per cent, although this includes the effects of the COVID recession. If we adjust to exclude 2020, Morneau averaged a 0.7 per cent annual increase—half the adjusted average annual growth rate under Flaherty.
Finally, Chrystia Freeland averaged annual growth in per-person GDP of -0.3 per cent during her tenure. And while the first 18 or so months of her time as finance minister, from the summer of 2020 through 2021, were affected by the COVID recession and the subsequent rebound, the average annual rate of per-person GDP growth was -0.2 per cent during her final three years. Consequently, at the time of her resignation from cabinet in 2024, Canadian living standards are projected to be 1.8 per cent lower than they were in 2019.
Let’s now consider some basic fiscal measures.
Martin is by far the strongest performing finance minister across almost every metric. Faced with a looming fiscal crisis brought about by decades of deficits and debt accumulation, he reduced spending both in nominal terms and as a share of the economy. For example, after adjusting for inflation, per-person spending on federal programs dropped by 5.9 per cent during his tenure as finance minister (see chart below). As a result, the federal government balanced the budget and lowered the national debt, ultimately freeing up resources via lower interest costs for personal and business tax relief that made the country more competitive and improved incentives for entrepreneurs, businessowners, investors and workers.
*Note: Freeland’s term began in 2020, but given the influence of COVID, 2019 is utilized as the baseline for the overall change in spending. Sources: Statistics Canada Table 17-10-0005-01, Table 36-10-0130-01; Fiscal Reference Tables 2024; 2024 Fall Economic Statement
Flaherty’s record as finance minister is mixed, in part due to the recession of 2008-09. Per-person program spending (inflation adjusted) increased by 11.6 per cent, and there was a slight (0.6 percentage point) increase in spending as a share of the economy. Debt also increased as a share of the economy, although again, much of the borrowing during Flaherty’s tenure was linked with the 2008-09 recession. Flaherty did implement tax relief, including extending the business income tax cuts started under Martin, which made Canada more competitive in attracting investment and fostering entrepreneurship.
Both Morneau and Freeland recorded much worse financial performances than Flaherty and Martin. Morneau increased per-person spending on programs (inflation adjusted) by 37.1 per cent after removing 2020 COVID-related expenditures. Even if a more generous assessment is used, specifically comparing spending in 2019 (prior to the effects of the pandemic and recession) per-person spending still increased by 18.1 per cent compared to the beginning of his tenure.
In his five years, Morneau oversaw an increase in total federal debt of more than $575 billion, some of which was linked with COVID spending in 2020. However, as multiple analyses have concluded, the Trudeau government spent more and accumulated more debt during COVID than most comparable industrialized countries, with little or nothing to show for it in terms of economic growth or better health performance. Simply put, had Morneau exercised more restraint, Canada would have accumulated less debt and likely performed better economically.
Freeland’s tenure as finance minister is the shortest of the four ministers examined. It’s nonetheless equally as unimpressive as that of her Trudeau government predecessor (Morneau). If we use baseline spending from 2019 to adjust for the spike in spending in 2020 when she was appointed finance minister, per-person spending on programs by the federal government (inflation adjusted) during Freeland’s term increased by 4.1 per cent. Total federal debt is expected to increase from $1.68 trillion when Freeland took over to an estimated $2.2 trillion this year, despite the absence of a recession or any other event that would impair federal finances since the end of COVID in 2021. For some perspective, the $470.8 billion in debt accumulated under Freeland is more than double the $220.3 billion accumulated under Morneau prior to COVID. And there’s an immediate cost to that debt in the form of $53.7 billion in expected federal debt interest costs this year. These are taxpayer resources unavailable for actual services such as health care.
Freeland’s resignation from cabinet sent shock waves throughout the country, perhaps relieving her of responsibility for the Trudeau government’s latest poorly-designed fiscal policies. However, cabinet ministers bear responsibility for the performance of their ministries—meaning Freeland must be held accountable for her previous budgets and the fiscal and economic performance of the government during her tenure. Compared to previous long-serving finances ministers, it’s clear that Chrystia Freeland, and her Trudeau predecessor Bill Morneau, failed to shepherd a strong economy or maintain responsible and prudent finances.
From LifeSiteNews
Pornhub has taken down 91% of its images and videos and a huge portion of the last 9% will be gone by June 30 because it never verified the age or consent of those in the videos.
Despite an aggressive PR operation to persuade lawmakers that they have reformed, Pornhub is having a very bad year.
On May 29, it was reported that the European Commission is investigating the pornography giant and three other sites for failing to verify the ages of users.
The investigation, which comes after a letter sent to the companies last June asking what measures they have taken to protect minors, is being carried out under the Digital Services Act. The DSA came into effect in November 2022 and directs platforms to ensure “appropriate and proportionate measures to ensure a high level of privacy, safety, and security of minors, on their service” and implement “targeted measures to protect the rights of the child, including age verification and parental control tools, tools aimed at helping minors signal abuse or obtain support, as appropriate.”
According to France24: “The commission, the EU’s tech regulator, accused the platforms of not having ‘appropriate; age verification tools to prevent children from being exposed to pornography. An AFP correspondent only had to click a button on Tuesday stating they were older than 18 without any further checks to gain access to each of the four platforms.”
Indeed, Pornhub’s alleged safety mechanisms are a sick joke, and Pornhub executives have often revealed the real reason behind their opposition to safeguards: It limits their traffic.
Meanwhile, Pornhub — and other sites owned by parent company Aylo — are blocking their content in France in response to a new age verification law that came into effect on June 7. Solomon Friedman, Aylo’s point man in the Pornhub propaganda war, stated that the French law was “potentially privacy infringing” and “dangerous,” earning a scathing rebuke from France’s deputy minister for digital technology Clara Chappaz.
“We’re not stigmatizing adults who want to consume this content, but we mustn’t do so at the expense of protecting our children,” she said, adding later, “Lying when one does not want to comply with the law and holding others hostage is unacceptable. If Aylo would rather leave France than apply our law, they are free to do so.” According to the French media regulator Arcom, 2.3 million French minors visit pornographic sites every month.
Incidentally, anti-Pornhub activist Laila Mickelwait reported another major breakthrough on June 7. “P*rnhub is deleting much of what’s left of the of the site by June 30,” she wrote on X. “Together we have collectively forced this sex trafficking and rape crime scene to take down 91% of the entire site, totaling 50+ million videos and images. Now a significant portion of the remaining 9% will be GONE this month in what will be the second biggest takedown of P*rnhub content since December 2020.”
“The reason for the mass deletion is that they never verified the age or consent of the individuals depicted in the images and videos, and therefore the site is still awash with real sexual crime,” she added. “Since the fight began in 2020, 91% of P*rnhub has been taken down — over 50 million images and videos. Now a huge portion of the last 9% will be gone by June 30 because P*rnhub never verified the age or consent of those in the videos and the site is a crime scene.”
Mickelwait has long called for the shutdown of Pornhub and the prosecution of those involved in its operation. This second mass deletion of content, as welcome as it is, reeks of a desperate attempt to eliminate the evidence of Pornhub’s crimes.
Chief David Jimmie is president of Stonlasec8 and Chief of Squiala First Nation in B.C. He also chairs the Western Indigenous Pipeline Group. Photo courtesy Western Indigenous Pipeline Group
From the Canadian Energy Centre
Stonlasec8 agreement is Canada’s first federal Indigenous loan guarantee
The first federally backed Indigenous loan guarantee paves the way for increased prosperity for 36 First Nations communities in British Columbia.
In May, Canada Development Investment Corporation (CDEV) announced a $400 million backstop for the consortium to jointly purchase 12.5 per cent ownership of Enbridge’s Westcoast natural gas pipeline system for $712 million.
In the works for two years, the deal redefines long-standing relationships around a pipeline that has been in operation for generations.
“For 65 years, there’s never been an opportunity or a conversation about participating in an asset that’s come through the territory,” said Chief David Jimmie of the Squiala First Nation near Vancouver, B.C.
“We now have an opportunity to have our Nation’s voices heard directly when we have concerns and our partners are willing to listen.”
Jimmie chairs the Stonlasec8 Indigenous Alliance, which represents the communities buying into the Enbridge system.
The name Stonlasec8 reflects the different regions represented in the agreement, he said.
The Westcoast pipeline stretches more than 2,900 kilometres from northeast B.C. near the Alberta border to the Canada-U.S. border near Bellingham, Wash., running through the middle of the province.
It delivers up to 3.6 billion cubic feet per day of natural gas throughout B.C. and the Lower Mainland, Alberta and the U.S. Pacific Northwest.
“While we see the benefits back to communities, we are still reminded of our responsibility to the land, air and water so it is important to think of reinvestment opportunities in alternative energy sources and how we can offset the carbon footprint,” Jimmie said.
He also chairs the Western Indigenous Pipeline Group (WIPG), a coalition of First Nations communities working in partnership with Pembina Pipeline to secure an ownership stake in the newly expanded Trans Mountain pipeline system.
There is overlap between the communities in the two groups, he said.
CDEV vice-president Sébastien Labelle said provincial models such as the Alberta Indigenous Opportunities Corporation (AIOC) and Ontario’s Indigenous Opportunities Financing Program helped bring the federal government’s version of the loan guarantee to life.
“It’s not a new idea. Alberta started it before us, and Ontario,” Labelle said.
“We hired some of the same advisors AIOC hired because we want to make sure we are aligned with the market. We didn’t want to start something completely new.”
Broadly, Jimmie said the Stonlasec8 agreement will provide sustained funding for investments like housing, infrastructure, environmental stewardship and cultural preservation. But it’s up to the individual communities how to spend the ongoing proceeds.
The long-term cash injections from owning equity stakes of major projects can provide benefits that traditional funding agreements with the federal government do not, he said.
Labelle said the goal is to ensure Indigenous communities benefit from projects on their traditional territories.
“There’s a lot of intangible, indirect things that I think are hugely important from an economic perspective,” he said.
“You are improving the relationship with pipeline companies, you are improving social license to do projects like this.”
Jimmie stressed the impact the collaborative atmosphere of the negotiations had on the success of the Stonlasec8 agreement.
“It takes true collaboration to reach a successful partnership, which doesn’t always happen. And from the Nation representation, the sophistication of the group was one of the best I’ve ever worked with.”
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