Business
Capital Flight Signals No Confidence In Carney’s Agenda
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.
Alberta
A Christmas wish list for health-care reform
From the Fraser Institute
By Nadeem Esmail and Mackenzie Moir
It’s an exciting time in Canadian health-care policy. But even the slew of new reforms in Alberta only go part of the way to using all the policy tools employed by high performing universal health-care systems.
For 2026, for the sake of Canadian patients, let’s hope Alberta stays the path on changes to how hospitals are paid and allowing some private purchases of health care, and that other provinces start to catch up.
While Alberta’s new reforms were welcome news this year, it’s clear Canada’s health-care system continued to struggle. Canadians were reminded by our annual comparison of health care systems that they pay for one of the developed world’s most expensive universal health-care systems, yet have some of the fewest physicians and hospital beds, while waiting in some of the longest queues.
And speaking of queues, wait times across Canada for non-emergency care reached the second-highest level ever measured at 28.6 weeks from general practitioner referral to actual treatment. That’s more than triple the wait of the early 1990s despite decades of government promises and spending commitments. Other work found that at least 23,746 patients died while waiting for care, and nearly 1.3 million Canadians left our overcrowded emergency rooms without being treated.
At least one province has shown a genuine willingness to do something about these problems.
The Smith government in Alberta announced early in the year that it would move towards paying hospitals per-patient treated as opposed to a fixed annual budget, a policy approach that Quebec has been working on for years. Albertans will also soon be able purchase, at least in a limited way, some diagnostic and surgical services for themselves, which is again already possible in Quebec. Alberta has also gone a step further by allowing physicians to work in both public and private settings.
While controversial in Canada, these approaches simply mirror what is being done in all of the developed world’s top-performing universal health-care systems. Australia, the Netherlands, Germany and Switzerland all pay their hospitals per patient treated, and allow patients the opportunity to purchase care privately if they wish. They all also have better and faster universally accessible health care than Canada’s provinces provide, while spending a little more (Switzerland) or less (Australia, Germany, the Netherlands) than we do.
While these reforms are clearly a step in the right direction, there’s more to be done.
Even if we include Alberta’s reforms, these countries still do some very important things differently.
Critically, all of these countries expect patients to pay a small amount for their universally accessible services. The reasoning is straightforward: we all spend our own money more carefully than we spend someone else’s, and patients will make more informed decisions about when and where it’s best to access the health-care system when they have to pay a little out of pocket.
The evidence around this policy is clear—with appropriate safeguards to protect the very ill and exemptions for lower-income and other vulnerable populations, the demand for outpatient healthcare services falls, reducing delays and freeing up resources for others.
Charging patients even small amounts for care would of course violate the Canada Health Act, but it would also emulate the approach of 100 per cent of the developed world’s top-performing health-care systems. In this case, violating outdated federal policy means better universal health care for Canadians.
These top-performing countries also see the private sector and innovative entrepreneurs as partners in delivering universal health care. A relationship that is far different from the limited individual contracts some provinces have with private clinics and surgical centres to provide care in Canada. In these other countries, even full-service hospitals are operated by private providers. Importantly, partnering with innovative private providers, even hospitals, to deliver universal health care does not violate the Canada Health Act.
So, while Alberta has made strides this past year moving towards the well-established higher performance policy approach followed elsewhere, the Smith government remains at least a couple steps short of truly adopting a more Australian or European approach for health care. And other provinces have yet to even get to where Alberta will soon be.
Let’s hope in 2026 that Alberta keeps moving towards a truly world class universal health-care experience for patients, and that the other provinces catch up.
Business
Warning Canada: China’s Economic Miracle Was Built on Mass Displacement
If you think the CCP will treat foreigners better than its own people, when it extends its power over you, please think again: Dimon Liu’s warning to Canadian Parliament.
Editor’s Note: The Bureau is publishing the following testimony to Canada’s House of Commons committee on International Human Rights from Dimon Liu, a China-born, Washington, D.C.-based democracy advocate who testified in Parliament on December 8, 2025, about the human cost of China’s economic rise. Submitted to The Bureau as an op-ed, Liu’s testimony argues that the Canadian government should tighten scrutiny of high-risk trade and investment, and ensure Canada’s foreign policy does not inadvertently reward coercion. Liu also warns that the Chinese Communist Party could gain leverage over Canadians and treat them as it has done to its own subjugated population—an implied message to Prime Minister Mark Carney, who has pledged to engage China as a strategic partner without making that position clear to Canadians during his election campaign.
OTTAWA — It is an honor to speak before you at the Canadian Parliament.
My testimony will attempt to explain why China’s economic success is built on the backs of the largest number of displaced persons in human history.
It is estimated that these displaced individuals range between 300 to 400 million — it is equivalent to the total population of the United States being uprooted and forced to relocate. These displaced persons are invisible to the world, their sufferings unnoticed, their plights ignored.
In 1978, when economic reform began, China’s GDP was $150 billion USD.
In 2000, when China joined the WTO, it was approximately $1.2 trillion USD.
China’s current GDP is approximately $18 trillion USD.
In 2000 China’s manufacturing output was smaller than Italy’s.
Today it’s larger than America, Europe, Japan, and South Korea combined.
If you have ever wondered how China managed to grow so fast in such a short time, Charles Li, former CEO of the Hong Kong Stock Exchange, has the answers for you.
He listed 4 reasons: 1) cheapest land, 2) cheapest labor, 3) cheapest capital, and 4) disregard of environmental costs.
“The cheapest land” because the CCP government took the land from the farmers at little to no compensation.
“The cheapest labor,” because these farmers, without land to farm, were forced to find work in urban areas at very low wages.
The communist household registration system (hukou 戶口) ties them perpetually to the rural areas. This means they are not legal residents, and cannot receive social benefits that legal urban residents are entitled. They could be evicted at any time.
One well known incident of eviction occurred in November 2017. Cai Qi, now the second most powerful man in China after Xi Jinping, was a municipal official in Beijing. He evicted tens of thousands into Beijing’s harsh winter, with only days, or just moments of notice. Cai Qi made famous a term, “low-end population” (低端人口), and exposed CCP’s contempt of rural migrants it treats as second class citizens.
These displaced migrant workers have one tradition they hold dear — it is to reunite with their families during the Chinese Lunar New Year holiday, making this seasonal migration of 100 to 150 million people a spectacular event. In China’s economic winter of 2025 with waves of bankruptcies and factory closures, the tide of unemployed migrant workers returning home to where there is also no work, and no land to farm, has become a worrisome event.
Historically in the last 2,000 years, social instability has caused the collapse of many ruling regimes in China.
“The cheapest capital” is acquired through predatory banking practices, and through the stock markets, first to rake in the savings of the Chinese people; and later international investments by listing opaque, and state owned enterprises in leading stock markets around the world.
“A disregard of environmental costs” is a hallmark of China’s industrialization. The land is poisoned, so is the water; and China produces one-third of all global greenhouse gases.
Chinese Communist officials often laud their system as superior. The essayist Qin Hui has written that the Chinese communist government enjoys a human rights abuse advantage. This is true. By abusing its own people so brutally, the CCP regime has created an image of success, which will prove to be a mirage.
If you think the CCP will treat foreigners better than its own people, when it extends its power over you, please think again.
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