From the Frontier Centre for Public Policy

By Jay Goldberg

Between bad trade calls and looming deficits, Canada is driving money out just when it needs it most

Canadians voted for relative continuity in April, but investors voted with their wallets, moving $124 billion out of the country.

According to the National Bank, Canadian investors purchased approximately $124 billion in American securities between February and July of this year. At the same time, foreign investment in Canada dropped sharply, leaving the country with a serious hole in its capital base.

As Warren Lovely of National Bank put it, “with non-resident investors aloof and Canadians adding foreign assets, the country has suffered a major capital drain”—one he called “unprecedented.”

Why is this happening?

One reason is trade. Canada adopted one of the most aggressive responses to U.S. President Donald Trump’s tariff agenda. Former prime minister Justin Trudeau imposed retaliatory tariffs on the United States and escalated tensions further by targeting goods covered under the Canada–United States–Mexico Agreement (CUSMA), something even the Trump administration avoided.

The result was punishing. Washington slapped a 35 per cent tariff on non-CUSMA Canadian goods, far higher than the 25 per cent rate applied to Mexico. That made Canadian exports less competitive and unattractive to U.S. consumers. The effects rippled through industries like autos, agriculture and steel, sectors that rely heavily on access to U.S. markets. Canadian producers suddenly found themselves priced out, and investors took note.

Recognizing the damage, Prime Minister Mark Carney rolled back all retaliatory tariffs on CUSMA-covered goods this summer in hopes of cooling tensions. Yet the 35 per cent tariff on non-CUSMA Canadian exports remains, among the highest the U.S. applies to any trading partner.

Investors saw the writing on the wall. They understood Trudeau’s strategy had soured relations with Trump and that, given Canada’s reliance on U.S. trade, the United States would inevitably come out on top. Parking capital in U.S. securities looked far safer than betting on Canada’s economy under a government playing a weak hand.

The trade story alone explains much of the exodus, but fiscal policy is another concern. Interim Parliamentary Budget Officer Jason Jacques recently called Ottawa’s approach “stupefying” and warned that Canada risks a 1990s-style fiscal crisis if spending isn’t brought under control. During the 1990s, ballooning deficits forced deep program cuts and painful tax hikes. Interest rates soared, Canada’s debt was downgraded and Ottawa nearly lost control of its finances. Investors are seeing warning signs that history could repeat itself.

After months of delay, Canadians finally saw a federal budget on Nov. 4. Jacques had already projected a deficit of $68.5 billion when he warned the outlook was “unsustainable.” National Bank now suggests the shortfall could exceed $100 billion. And that doesn’t include Carney’s campaign promises, such as higher defence spending, which could add tens of billions more.

Deficits of that scale matter. They can drive up borrowing costs, leave less room for social spending and undermine confidence in the country’s long-term fiscal stability. For investors managing pensions, RRSPs or business portfolios, Canada’s balance sheet now looks shaky compared to a U.S. economy offering both scale and relative stability.

Add in high taxes, heavy regulation and interprovincial trade barriers, and the picture grows bleaker. Despite decades of promises, barriers between provinces still make it difficult for Canadian businesses to trade freely within their own country. From differing trucking regulations to restrictions on alcohol distribution, these long-standing inefficiencies eat away at productivity. When combined with federal tax and regulatory burdens, the environment for growth becomes even more hostile.

The Carney government needs to take this unprecedented capital drain seriously. Investors are not acting on a whim. They are responding to structural problems—ill-advised trade actions, runaway federal spending and persistent barriers to growth—that Ottawa has yet to fix.

In the short term, that means striking a deal with Washington to lower tariffs and restore confidence that Canada can maintain stable access to U.S. markets. It also means resisting the urge to spend Canada into deeper deficits when warning lights are already flashing red. Over the long term, Ottawa must finally tackle high taxes, cut red tape and eliminate the bureaucratic obstacles that stand in the way of economic growth.

Capital has choices. Right now, it is voting with its feet, and with its dollars, and heading south. If Canada wants that capital to come home, the government will have to earn it back.

Jay Goldberg is a fellow with the Frontier Centre for Public Policy.

 Sonia Elijah

“Big Brother is watching you.” These chilling words from George Orwell’s dystopian masterpiece, 1984, no longer read as fiction but are becoming a bleak reality in the UK and Canada—where digital dystopian measures are unravelling the fabric of freedom in two of the West’s oldest democracies.

Under the guise of safety and innovation, the UK and Canada are deploying invasive tools that undermine privacy, stifle free expression, and foster a culture of self-censorship. Both nations are exporting their digital control frameworks through the Five Eyes alliance, a covert intelligence-sharing network uniting the UK, Canada, US, Australia, and New Zealand, established during the Cold War. Simultaneously, their alignment with the United Nations’ Agenda 2030, particularly Sustainable Development Goal (SDG) 16.9—which mandates universal legal identity by 2030—supports a global policy for digital IDs, such as the UK’s proposed Brit Card and Canada’s Digital Identity Program, which funnel personal data into centralized systems under the pretext of “efficiency and inclusion.” By championing expansive digital regulations, such as the UK’s Online Safety Act and Canada’s pending Bill C-8, which prioritize state-defined “safety” over individual liberties, both nations are not just embracing digital authoritarianism—they’re accelerating the West’s descent into it.

The UK’s digital dragnet

The United Kingdom has long positioned itself as a global leader in surveillance. The British spy agency, Government Communications Headquarters (GCHQ), runs the formerly-secret mass surveillance programme, code-named Tempora, operational since 2011, which intercepts and stores vast amounts of global internet and phone traffic by tapping into transatlantic fibre-optic cables. Knowledge of its existence only came about in 2013, thanks to the bombshell documents leaked by the former National Security Agency (NSA) intelligence contractor and whistleblower, Edward Snowden. “It’s not just a US problem. The UK has a huge dog in this fight,” Snowden told the Guardian in a June 2013 report. “They [GCHQ] are worse than the US.”

Following that, is the Investigatory Powers Act (IPA) 2016, also dubbed the “Snooper’s Charter,” which mandates that internet service providers store users’ browsing histories, emails, texts, and phone calls for up to a year. Government agencies, including police and intelligence services (like MI5, MI6, and GCHQ) can access this data without a warrant in many cases, enabling bulk collection of communications metadata. This has been criticized for enabling mass surveillance on a scale that invades everyday privacy.

Recent expansions under the Online Safety Act (OSA) further empower authorities to demand backdoors in encrypted apps like WhatsApp, potentially scanning private messages for vaguely defined “harmful” content—a move critics like Big Brother Watch, a privacy advocacy group, decry as a gateway to mass surveillance. The OSA, which received Royal Assent on October 26, 2023, represents a sprawling piece of legislation by the UK government to regulate online content and “protect” users, particularly children, from “illegal and harmful material.” Implemented in phases by Ofcom, the UK’s communications watchdog, it imposes duties on a vast array of internet services, including social media, search engines, messaging apps, gaming platforms, and sites with user-generated content forcing compliance through risk assessments and hefty fines. By July 2025, the OSA was considered “fully in force” for most major provisions. This sweeping regime, aligned with global surveillance trends via Agenda 2030’s push for digital control, threatens to entrench a state-sanctioned digital dragnet, prioritizing “safety” over fundamental freedoms.

Elon Musk’s platform X has warned that the act risks “seriously infringing” on free speech, with the threat of fines up to £18 million or 10% of global annual turnover for non-compliance, encouraging platforms to censor legitimate content to avoid punishment. Musk took to X to express his personal view on the act’s true purpose: “suppression of the people.”

In late September, Imgur (an image-hosting platform popular for memes and shared media) made the decision to block UK users rather than comply with the OSA’s stringent regulations. This underscores the chilling effect such laws can have on digital freedom.

The act’s stated purpose is to make the UK “the safest place in the world to be online.” However, critics argue it’s a brazen power grab by the UK government to increase censorship and surveillance, all the while masquerading as a noble crusade to “protect” users.

Another pivotal development is the Data (Use and Access) Act 2025 (DUAA), which received Royal Assent in June. This wide-ranging legislation streamlines data protection rules to boost economic growth and public services but at the cost of privacy safeguards. It allows broader data sharing among government agencies and private entities, including for AI-driven analytics. For instance, it enables “smart data schemes” where personal information from banking, energy, and telecom sectors can be accessed more easily, seemingly for consumer benefits like personalized services—but raising fears of unchecked profiling.

Cybersecurity enhancements further expand the UK’s pervasive surveillance measures. The forthcoming Cyber Security and Resilience Bill, announced in the July 2024 King’s Speech and slated for introduction by year’s end, expands the Network and Information Systems (NIS) Regulations to critical infrastructure, mandating real-time threat reporting and government access to systems. This builds on existing tools like facial recognition technology, deployed extensively in public spaces. In 2025, trials in cities like London have integrated AI cameras that scan crowds in real-time, linking to national databases for instant identification—evoking a biometric police state.

Source: BBC News

The New York Times reported: “British authorities have also recently expanded oversight of online speech, tried weakening encryption and experimented with artificial intelligence to review asylum claims. The actions, which have accelerated under Prime Minister Keir Starmer with the goal of addressing societal problems, add up to one of the most sweeping embraces of digital surveillance and internet regulation by a Western democracy.”

Compounding this, UK police arrest over 30 people a day for “offensive” tweets and online messages, per The Times, often under vague laws, fuelling justifiable fears of Orwell’s thought police.

Yet, of all the UK’s digital dystopian measures, none has ignited greater fury than Prime Minister Starmer’s mandatory “Brit Card” digital ID—a smartphone-based system effectively turning every citizen into a tracked entity.

First announced on September 4, as a tool to “tackle illegal immigration and strengthen border security,” but rapidly the Brit Card’s scope ballooned through function-creep to envelop everyday essentials like welfare, banking and public access. These IDs, stored on smartphones containing sensitive data like photos, names, dates of birth, nationalities, and residency status, are sold “as the front door to all kinds of everyday tasks,” a vision championed by the Tony Blair Institute for Global Change— and echoed by Work and Pensions Secretary Liz Kendall MP in her October 13 parliamentary speech.

Source: TheBritishIntel

This digital shackles system has sparked fierce resistance across the UK. A scathing letter, led by independent MP Rupert Lowe and endorsed by nearly 40 MPs from diverse parties, denounces the government’s proposed mandatory “Brit Card” digital ID as “dangerous, intrusive, and profoundly un-British.” Conservative MP David Davis issued a stark warning, declaring that such systems “are profoundly dangerous to the privacy and fundamental freedoms of the British people.” On X, Davis amplified his critique, citing a £14m fine imposed on Capita after hackers breached pension savers’ personal data, writing: “This is another perfect example of why the government’s digital ID cards are a terrible idea.” By early October, a petition opposing the proposal had garnered over 2.8 million signatures, reflecting widespread public outcry. The government, however, dismissed these objections, stating, “We will introduce a digital ID within this Parliament to address illegal migration, streamline access to government services, and improve efficiency. We will consult on details soon.”

Canada’s surveillance surge

Across the Atlantic, Canada’s surveillance surge under Prime Minister Mark Carney—former Bank of England head and World Economic Forum board member—mirrors the UK’s dystopian trajectory. Carney, with his globalist agenda, has overseen a slew of bills that prioritize “security” over sovereignty. Take Bill C-2, An Act to amend the Customs Act, introduced June 17, 2025, which enables warrantless data access at borders and sharing with U.S. authorities via CLOUD Act (Clarifying Lawful Overseas Use of Data Act) pacts—essentially handing Canadian citizens’ digital lives to foreign powers. Despite public backlash prompting proposed amendments in October, its core—enhanced monitoring of transactions and exports—remains ripe for abuse.

Complementing this, Bill C-8, first introduced June 18, 2025, amends the Telecommunications Act to impose cybersecurity mandates on critical sectors like telecoms and finance. It empowers the government to issue secret orders compelling companies to install backdoors or weaken encryption, potentially compromising user security. These orders can mandate the cutoff of internet and telephone services to specified individuals without the need for a warrant or judicial oversight, under the vague premise of securing the system against “any threat.”

Opposition to this bill has been fierce. In a parliamentary speech Canada’s Conservative MP Matt Strauss, decried the bill’s sections 15.1 and 15.2 as granting “unprecedented, incredible power” to the government. He warned of a future where individuals could be digitally exiled—cut off from email, banking, and work—without explanation or recourse, likening it to a “digital gulag.”

Source: Video shared by Andrew Bridgen

The Canadian Constitution Foundation (CCF) and privacy advocates have echoed these concerns, arguing that the bill’s ambiguous language and lack of due process violate fundamental Charter rights, including freedom of expression, liberty, and protection against unreasonable search and seizure.

Bill C-8 complements the Online Harms Act (Bill C-63), first introduced in February 2024, which demanded platforms purge content like child exploitation and hate speech within 24 hours, risking censorship with vague “harmful” definitions. Inspired by the UK’s OSA and EU’s Digital Services Act (DSA), C-63 collapsed amid fierce backlash for its potential to enable censorship, infringe on free speech, and lack of due process. The CCF and Pierre Poilievre, calling it “woke authoritarianism,” led a 2024 petition with 100,000 signatures. It died during Parliament’s January 2025 prorogation after Justin Trudeau’s resignation.

These bills build on an alarming precedent: during the COVID era, Canada’s Public Health Agency admitted to tracking 33 million devices during lockdown—nearly the entire population—under the pretext of public health, a blatant violation exposed only through persistent scrutiny. The Communications Security Establishment (CSE), empowered by the longstanding Bill C-59, continues bulk metadata collection, often without adequate oversight. These measures are not isolated; they stem from a deeper rot, where pandemic-era controls have been normalized into everyday policy.

Canada’s Digital Identity Program, touted as a “convenient” tool for seamless access to government services, emulates the UK’s Brit Card and aligns with UN Agenda 2030’s SDG 16.9. It remains in active development and piloting phases, with full national rollout projected for 2027–2028.

“The price of freedom is eternal vigilance.” Orwell’s 1984 warns we must urgently resist this descent into digital authoritarianism—through petitions, protests, and demands for transparency—before a Western Great Firewall is erected, replicating China’s stranglehold that polices every keystroke and thought.

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