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Carney government’s throne speech—different delivery, same old approach to policy

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3 days ago

7 minute read

From the Fraser Institute

By Jake Fuss and Grady Munro

For the first time in nearly 70 years, the speech from the throne—which marks the opening of a new Parliament and lays out the government’s policy priorities for the coming term—was delivered directly by Canada’s sovereign, King Charles III, as opposed to the governor general (his representative in Canada). A key theme throughout the speech was the idea of change, and that the Carney government has the opportunity to transform the Canadian economy.

But while Canada certainly needs change, peeling back the rhetoric reveals the government plans to utilize much of the same strategies as its predecessor when addressing the country’s problems. Consider the following three examples.

A New Fiscal Approach

Throughout the election, and again during the throne speech, the Carney government promised a new fiscal principle that will guide all of its actions—“spend less to invest more.” This “new fiscal discipline” is intended to depart from the fiscal approach of the previous government—which Prime Minister Mark Carney has said spent “too much.” To “spend less,” the government plans to split spending into two separate budgets—an operating and capital budget—and slow growth in operating spending to balance the operating budget over the next three years.

The problem is the government’s fiscal math simply doesn’t add up. In the speech, the government commits to major new investments in national defence and law enforcement, and personal income tax cuts—all of which put pressure on the budget. The government rightly identifies the need to cut spending elsewhere to offset this pressure, but essentially hamstrings efforts to rein in spending by taking approximately three-quarters of the budget—including (but not limited to) all transfers to provinces, territories and individuals, and major programs such as national dental care, pharmacare and daycare—off the table.

What is the result of the Carney government’s new fiscal approach? The government will spend more in total, run larger deficits and take on more debt over the next four years than was previously planned by the Trudeau government. Constantly hitting the gas on spending and debt is the same strategy that Carney’s predecessor employed time and time again.

Building the Strongest Economy in the G7

According to the throne speech, the government’s “core mission” is to “build the strongest economy in the G7.” Part of the government’s plan to do this is by removing internal trade barriers—something that has been long overdue—but there’s only so much the federal government can do, as much of the work must be done by the provinces. Missing from the speech was a comprehensive plan to reform and reduce taxes to promote economic growth, along with a clear commitment to dismantle the costly regulatory regime of the Trudeau government.

Canada’s tax system represents a significant drag on the Canadian economy, and while the Carney government plans to lower the bottom federal personal income tax (PIT) rate from 15 per cent to 14 per cent, this change will do little to increase economic growth because it will not meaningfully improve the economic incentives to work, save and invest, nor will it make Canada much better at attracting and retaining professionals, business owners and entrepreneurs. More ambitious and broad-based reforms and tax cuts are needed to make a meaningful impact on growth.

Similarly, it’s unclear whether the Carney government is willing to meaningfully depart from the regulatory regime of the Trudeau government. A number of studies have highlighted how overburdensome regulations implemented under the previous government (including Bill C-69 and the federal emissions cap) act as a major deterrent for the investments and projects needed to grow the economy.

However, despite the Carney government’s commitments to “catalyze” investments and projects while making Canada an “energy superpower,” the government has sent mixed signals regarding its willingness to significantly depart from the previous government’s approach to regulation and the energy sector.

Expanding Role of Federal Government

During the last decade under the Trudeau government, Canada experienced one of the largest increases in the size of government of any advanced country, in large part due to the previous government’s tendency to expand the federal government’s role in the economy (national dental care, pharmacare, daycare, etc.). Unfortunately, the throne speech suggests the Carney government will repeat these mistakes and continue to expand the federal government’s role in the economy.

For example, the government plans to speed up the time it takes to approve major projects within Canada to incentivize new investments and grow the economy. However, instead of eliminating the costly and burdensome regulations that make it hard to build projects in Canada, the Carney government plans to create a new government entity—the Major Federal Project Office—to reduce approval times. In other words, the government will create more bureaucracy and regulation to try and solve a problem created by too much regulation.

Similarly, in its efforts to spur new homebuilding, the Carney government will create another new federal entity called Build Canada Homes, which will “get the government back in the business of building” by acting as a developer to build affordable housing while also providing financing to other affordable homebuilders. However, by increasing the federal government’s role in the economy, and continuing to expand bureaucratic influence, the government is unlikely to “catalyze” significant new homebuilding but it will likely expose taxpayers to significant risks.

Due to the presence of King Charles III, the delivery of this year’s speech from the throne differed significantly from years past. However, in substance, the Carney government promises much of the same.

Jake Fuss

Director, Fiscal Studies, Fraser Institute

Grady Munro

Policy Analyst, Fraser Institute
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EV fantasy losing charge on taxpayer time

Published on May 30, 2025

By

From the Fraser Institute

By Kenneth P. Green

The vision of an all-electric transportation sector, shared by policymakers from various governments in Canada, may be fading fast.

The latest failure to charge is a recent announcement by Honda, which will postpone a $15 billion electric vehicle (EV) project in Ontario for two years, citing market demand—or lack thereof. Adding insult to injury, Honda will move some of its EV production to the United States, partially in response to the Trump Tariff Wars. But any focus on tariffs is misdirection to conceal reality; failures in the electrification agenda have appeared for years, long before Trump’s tariffs.

In 2023, the Quebec government pledged $2.9 billion in financing to secure a deal with Swedish EV manufacturer NorthVolt. Ottawa committed $1.34 billion to build the plant and another $3 billion worth of incentives. So far, per the CBC, the Quebec government “ invested $270 million in the project and the provincial pension investor, the Caisse de dépôt et placement du Québec (CDPQ), has also invested $200 million.” In 2024, NorthVolt declared bankruptcy in Sweden, throwing the Canadian plans into limbo.

Last month, the same Quebec government announced it will not rescue the Lion Electric company from its fiscal woes, which became obvious in December 2024 when the company filed for creditor protection (again, long before the tariff war). According to the Financial Post, “Lion thrived during the electric vehicle boom, reaching a market capitalization of US$4.2 billion in 2021 and growing to 1,400 employees the next year. Then the market for electric vehicles went through a tough period, and it became far more difficult for manufacturers to raise capital.” The Quebec government had already lost $177 million on investments in Lion, while the federal government lost $30 million, by the time the company filed for creditor protection.

Last year, Ford Motor Co. delayed production of an electric SUV at its Oakville, Ont., plant and Umicore halted spending on a $2.8 billion battery materials plant in eastern Ontario. In April 2025, General Motors announced it will soon close the CAMI electric van assembly plant in Ontario, with plans to reopen in the fall at half capacity, to “align production schedules with current demand.” And GM temporarily laid off hundreds of workers at its Ingersoll, Ontario, plant that produces an electric delivery vehicle because it isn’t selling as well as hoped.

There are still more examples of EV fizzle—again, all pre-tariff war. Government “investments” to Stellantis and LG Energy Solution and Ford Motor Company have fallen flat and dissolved, been paused or remain in limbo. And projects for Canada’s EV supply chain remain years away from production. “Of the four multibillion-dollar battery cell manufacturing plants announced for Canada,” wrote automotive reporter Gabriel Friedman, “only one—a joint venture known as NextStar Energy Inc. between South Korea’s LG Energy Solution Ltd. and European automaker Stellantis NV—progressed into even the construction phase.”

What’s the moral of the story?

Once again, the fevered dreams of government planners who seek to pick winning technologies in a major economic sector have proven to be just that, fevered dreams. In 2025, some 125 years since consumers first had a choice of electric vehicles or internal combustion vehicles (ICE), the ICE vehicles are still winning in economically-free markets. Without massive government subsidies to EVs, in fact, there would be no contest at all. It’d be ICE by a landslide.

In the face of this reality, the new Carney government should terminate any programs that try to force EV technologies into the marketplace, and rescind plans to have all new light-duty vehicle sales be EVs by 2035. It’s just not going to happen, and planning for a fantasy is not sound government policy nor sound use of taxpayer money. Governments in Ontario, Quebec and any other province looking to spend big on EVs should also rethink their plans forthwith.

Kenneth P. Green

Senior Fellow, Fraser Institute
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Switzerland has nearly 65% more doctors and much shorter wait times than Canada, despite spending roughly same amount on health care

Published on May 30, 2025

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From the Fraser Institute

By Yanick Labrie

Switzerland’s universal health-care system delivers significantly better results than Canada’s in terms of wait times, access to health professionals like doctors and nurses, and patient satisfaction finds a new study published by the Fraser Institute, an independent, non-partisan Canadian policy think-tank.

“Despite its massive price tag, Canada’s health-care system lags behind many other countries with universal health care,” said Yanick Labrie, senior fellow at the Fraser Institute and author of Building Responsive and Adaptive Health-Care Systems in Canada: Lessons from Switzerland.

The study highlights how Switzerland’s universal health-care system consistently outperforms Canada on most metrics tracked by the OECD.

In 2022, the latest year of available data, despite Canada (11.5 per cent of GDP) and Switzerland (11.9 per cent) spending close to the same amount on health care, Switzerland had 4.6 doctors per thousand people compared to 2.8 in Canada. In other words, Switzerland had 64.3 per cent more doctors than Canada (on a per-thousand people basis).

Switzerland also had 4.4 hospital beds per thousand people compared to 2.5 for Canada—Switzerland (8th) outranked Canada (36th) on this metric out of 38 OECD countries with universal health care.

Likewise, 85.3 per cent of Swiss people surveyed by the CWF (Commonwealth Fund) reported being able to obtain a consultation with a specialist within 2 months. By comparison, only 48.3 per cent of Canadians experienced a similar wait time. Beyond medical resources and workforce, patient satisfaction diverges sharply between the two countries, as 94 per cent of Swiss patients report being satisfied with their health-care system compared to just 56 per cent in Canada.

“Switzerland shows that a universal health care system can reconcile efficiency and equity – all while being more accessible and responsive to patients’ needs and preferences,” Labrie said.

“Policymakers in Canada who hope to improve Canada’s broken health-care system should look to more successful universal health-care countries like Switzerland.”

Building Responsive and Adaptive Health Care Systems in Canada: Lessons from Switzerland

  • Canada’s health-care system is increasingly unable to meet patient needs, with wait times reaching record lengths—over 30 weeks for planned care in 2024—despite significantly rising public spending and growing dissatisfaction among patients and providers nationwide.
  • Swiss health care outperforms Canada in nearly all OECD performance indicators: more doctors and nurses per capita, better access to care, shorter wait times, lower unmet needs, and higher patient satisfaction (94% vs. Canada’s 56%).
  • Switzerland ensures universal coverage through 44 competing private, not-for-profit insurers. Citizens are required to enroll but have the freedom to choose insurers and tailor coverage to their needs and preferences, promoting both access and autonomy.
  • Swiss basic insurance coverage is broader than Canada’s, including outpatient care, mental health, prescribed medications, home care, and long-term care—with modest, capped cost-sharing, and exemptions for vulnerable groups, including children, low-income individuals, and the chronically ill.
  • Patient cost participation (deductibles/co-payments) exists, but the system includes robust financial protection: 27.5% of the population receives direct subsidies, ensuring affordability and equity.
  • Risk equalization mechanisms prevent risk selection and guarantee insurer fairness, promoting solidarity across demographic and health groups.
  • Decentralized governance enhances responsiveness; cantons manage service planning, ensuring care adapts to local realities and population needs.
  • Managed competition drives innovation and efficiency: over 75% of the Swiss now choose alternative models (e.g., HMOs, telemedicine, gatekeeping).
  • The Swiss model proves that a universal, pluralistic, and competitive system can reconcile efficiency, equity, access, and patient satisfaction—offering powerful insights for Canada’s stalled health reform agenda.

 

Yanick Labrie

Senior Fellow, Fraser Institute
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