Canada Is Suffocating Its Future One Policy At A Time

From the Frontier Centre for Public Policy

While wealth-generating industries are hindered, subsidies flow to politically favored projects, leaving capital fleeing and IPO activity collapsing. Canada’s prosperity is at risk unless leaders cut red tape, open trade, reform taxes, and support industries that create real growth.

Red tape, capital flight and anti-growth policies are draining Canada’s economy. Our prosperity is at risk if leaders don’t act now

Canada is slowly dismantling the foundations of its own prosperity. Instead of unleashing our strengths, we’ve layered on regulation, red tape and ideology that repel investment and weaken our economy—one policy at a time.

This isn’t hyperbole. For over a decade, Canada’s per capita gross domestic product (GDP) has stagnated. Our productivity has fallen behind global peers. Young people are leaving the country, investment is drying up and even our own entrepreneurs are taking their capital—and their ideas—elsewhere.

We’re not failing because of a lack of resources. Quite the opposite. We have everything: land, minerals, oil, gas, water, agriculture and human talent. But whether it’s energy infrastructure, mining projects or manufacturing capacity, the answer from Ottawa is almost always “no”—thanks to layers of red tape, regulation and risk-averse policy.

Bloated bureaucracy, regulatory overreach and ideologically driven legislation—such as Bill C-69, which made it far harder to approve major energy and infrastructure projects, and Bill C-5, which gives Ottawa sweeping veto power in the name of reconciliation—have created an environment so hostile to investment that many firms no longer even try.

One example illustrates this clearly. The Trans Mountain pipeline—a major oil pipeline intended to carry Alberta crude to Pacific markets—was crippled by government takeover and quintupled in cost. We’re now told it might expand further—if regulators allow it.

Meanwhile, 15 per cent of the pipeline sits idle. This portion, set aside for short-term or on-demand shipments—known as spot capacity—is burdened by toll rates so high that shippers can’t justify using it. These prohibitively high fees, meant to recover the ballooning construction costs, have effectively priced out would-be users, leaving critical infrastructure underused and investment returns diminished.

This isn’t just bad economics. It directly weakens the very foundation of Canadian life—good jobs, innovation and upward mobility. Without strong investment in productive sectors like energy, mining and agriculture, we lose the wealth and opportunity that support our way of life.

Yet we continue to subsidize politically fashionable projects such as pumping billions into electric vehicle plants while punishing the industries that pay the bills.

And the message to innovators is just as bleak: new companies are staying private, avoiding public markets like the Toronto Stock Exchange, where new listings—known as IPOs—have all but disappeared. Bloomberg has reported just one large IPO in Canada so far this year. That’s unthinkable in a country that once marketed itself as a global financial hub. It’s part of a deeper problem: productivity is flatlining, and capital is fleeing, with hundreds of billions of dollars quietly leaving Canada in recent years.

This is why the average Canadian feels poorer—at the grocery store, in job prospects and when trying to save for a home. When investment dries up, so does the future. Our middle class, once the backbone of this country, is being squeezed from all sides: by inflation, stagnating wages, rising taxes and the shrinking availability of meaningful work.

Even our national identity is eroding. What kind of country punishes its wealth creators? What kind of government claims to support Indigenous partnerships while vetoing resource projects that offer Indigenous communities real economic independence? What kind of democracy penalizes companies for speaking openly about their environmental performance?

Canadians are starting to feel it. Young graduates are leaving. Parents are unsure how their kids will afford homes—or futures. We’re told this is the cost of progress. But the truth is simpler: we’re managing our decline.

There is another way. Open internal trade. Restore industrial freedom. Reform taxation to reward innovation and risk. End the obsession with slogans and deliver real-world results.

Canada still has every advantage for renewal. But it will take leadership willing to act. Canadians are ready. It’s time for our policies to catch up.

Renewal begins with the conviction that this country can thrive again—not in theory, not one day, but now. It begins with a government willing to say “yes” to building, producing, investing and competing. It begins with citizens who understand that prosperity is not permanent—it must be earned, protected and made possible by policy.

Without a vibrant economy, there is no middle class. And without a middle class, there is no Canada.

David Leis is President and CEO of the Frontier Centre for Public Policy and host of the Leaders on the Frontier podcast.

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Major tax changes in 2026: Report

Published on December 15, 2025

Todayville

By Franco Terrazzano

The Canadian Taxpayers Federation released its annual New Year’s Tax Changes report today to highlight the major tax changes in 2026.

“There’s some good news and bad news for taxpayers in 2026,” said Franco Terrazzano, CTF Federal Director. “The federal government cut income taxes, but it’s hiking payroll taxes. The government cancelled the consumer carbon tax, but it’s hammering Canadian businesses with a higher industrial carbon tax.”

Payroll taxes: The federal government is raising the maximum mandatory Canada Pension Plan and Employment Insurance contributions in 2026. These payroll tax increases will cost a worker up to an additional $262 next year.

For workers making $85,000 or more, federal payroll taxes (CPP and EI tax) will cost $5,770 in 2026. Their employers will also be forced to pay $6,219.

Income tax: The federal government cut the lowest income tax rate from 15 to 14 per cent. This will save the average taxpayer $190 in 2026, according to the Parliamentary Budget Officer.

Carbon taxes: The government cancelled its consumer carbon tax effective April 1, 2025. However, the government still charges carbon taxes through its industrial carbon tax and a hidden carbon tax embedded in fuel regulations.

The industrial carbon tax will increase to $110 per tonne in 2026. While the government hasn’t provided further details on how much the industrial carbon tax will cost Canadians, 70 per cent of Canadians believe businesses pass on most or some of the cost of the tax to consumers, according to a Leger poll.

Alcohol taxes: Federal alcohol taxes are expected to increase by two per cent on April 1, 2026. This alcohol tax hike will cost taxpayers about $41 million in 2026-27, according to industry estimates.

First passed in the 2017 federal budget, the alcohol escalator tax automatically increases excise taxes on beer, wine and spirits every year without a vote in Parliament. Since being imposed, the alcohol escalator tax has cost taxpayers about $1.6 billion, according to industry estimates.

“Canadians pay too much tax because the government wastes too much money,” Terrazzano said. “Canadians are overtaxed and need serious tax cuts to help make life more affordable and our economy more competitive.

“Prime Minister Mark Carney needs to significantly cut spending, provide major tax relief and scrap all carbon taxes.”

You can read the CTF’s New Year’s Tax Changes report here.

Automotive

Politicians should be honest about environmental pros and cons of electric vehicles

Published on December 14, 2025

Todayville

From the Fraser Institute

By Annika Segelhorst and Elmira Aliakbari

According to Steven Guilbeault, former environment minister under Justin Trudeau and former member of Prime Minister Carney’s cabinet, “Switching to an electric vehicle is one of the most impactful things Canadians can do to help fight climate change.”

And the Carney government has only paused Trudeau’s electric vehicle (EV) sales mandate to conduct a “review” of the policy, despite industry pressure to scrap the policy altogether.

So clearly, according to policymakers in Ottawa, EVs are essentially “zero emission” and thus good for environment.

But is that true?

Clearly, EVs have some environmental advantages over traditional gasoline-powered vehicles. Unlike cars with engines that directly burn fossil fuels, EVs do not produce tailpipe emissions of pollutants such as nitrogen dioxide and carbon monoxide, and do not release greenhouse gases (GHGs) such as carbon dioxide. These benefits are real. But when you consider the entire lifecycle of an EV, the picture becomes much more complicated.

Unlike traditional gasoline-powered vehicles, battery-powered EVs and plug-in hybrids generate most of their GHG emissions before the vehicles roll off the assembly line. Compared with conventional gas-powered cars, EVs typically require more fossil fuel energy to manufacture, largely because to produce EVs batteries, producers require a variety of mined materials including cobalt, graphite, lithium, manganese and nickel, which all take lots of energy to extract and process. Once these raw materials are mined, processed and transported across often vast distances to manufacturing sites, they must be assembled into battery packs. Consequently, the manufacturing process of an EV—from the initial mining of materials to final assembly—produces twice the quantity of GHGs (on average) as the manufacturing process for a comparable gas-powered car.

Once an EV is on the road, its carbon footprint depends on how the electricity used to charge its battery is generated. According to a report from the Canada Energy Regulator (the federal agency responsible for overseeing oil, gas and electric utilities), in British Columbia, Manitoba, Quebec and Ontario, electricity is largely produced from low- or even zero-carbon sources such as hydro, so EVs in these provinces have a low level of “indirect” emissions.

However, in other provinces—particularly Alberta, Saskatchewan and Nova Scotia—electricity generation is more heavily reliant on fossil fuels such as coal and natural gas, so EVs produce much higher indirect emissions. And according to research from the University of Toronto, in coal-dependent U.S. states such as West Virginia, an EV can emit about 6 per cent more GHG emissions over its entire lifetime—from initial mining, manufacturing and charging to eventual disposal—than a gas-powered vehicle of the same size. This means that in regions with especially coal-dependent energy grids, EVs could impose more climate costs than benefits. Put simply, for an EV to help meaningfully reduce emissions while on the road, its electricity must come from low-carbon electricity sources—something that does not happen in certain areas of Canada and the United States.

Finally, even after an EV is off the road, it continues to produce emissions, mainly because of the battery. EV batteries contain components that are energy-intensive to extract but also notoriously challenging to recycle. While EV battery recycling technologies are still emerging, approximately 5 per cent of lithium-ion batteries, which are commonly used in EVs, are actually recycled worldwide. This means that most new EVs feature batteries with no recycled components—further weakening the environmental benefit of EVs.

So what’s the final analysis? The technology continues to evolve and therefore the calculations will continue to change. But right now, while electric vehicles clearly help reduce tailpipe emissions, they’re not necessarily “zero emission” vehicles. And after you consider the full lifecycle—manufacturing, charging, scrapping—a more accurate picture of their environmental impact comes into view.