Declining stature of foreign affairs minister underscores Canada’s waning influence on world stage

From the Fraser Institute

In the cabinet he unveiled in May, Prime Minister Mark Carney appointed Anita Anand to serve as this year’s foreign affairs minister.

Yes, that’s tongue in cheek. Anand may well serve longer than one year in that role. Her predecessor, Mélanie Joly, served three-and-a-half years, almost as long as John Baird who served from May 2011 to February 2015. But those two were exceptions to what has become a revolving door ministry. In this century, 15 people have served as minister of foreign affairs.

Some of this has to do with the six minority governments we’ve had in Ottawa over that time. But the bigger reason is that Global Affairs Canada, as it is currently known, no longer has the stature it once enjoyed, in part because foreign policy is directed more and more from the Prime Minister’s Office, and because “Canada’s standing in the world has slipped,” as Marc Garneau, who was foreign minister for nine months in 2021, wrote in his memoir. “We are losing credibility.”

The minister of foreign affairs was once seen almost as a Canadian equivalent of an American vice-president. Louis St. Laurent, Lester Pearson and Jean Chretien all served at foreign affairs before later becoming prime minister. Joe Clark served as foreign affairs minister after having been prime minister.

And Canadian foreign policy once mattered in world affairs. Pearson played a key role in the negotiations that led to the creation of the North Atlantic Treaty Organization (NATO) in 1949. He was the only Canadian to win the Nobel Prize for Peace, after he helped broker a ceasefire during the 1956 Suez Crisis that led to the first peacekeeping mission.

During her brief tenure as foreign affairs minister in 1979, Flora MacDonald promoted the idea of bringing Vietnamese refugees to Canada through private sponsorships by citizens and groups. The United Nations awarded Canada the Nansen Refugee Award for accepting more than 60,000 boat people, as they were known, from Indochina.

Joe Clark, as External Affairs minister in the 1980s, put Canada in the forefront of opposition to the apartheid regime in South Africa.

At the turn of this century, foreign minister Lloyd Axworthy led the movement that brought about the United Nations doctrine of Responsibility to Protect—a global commitment to prevent genocide and other atrocities.

And following the attacks on 9/11, Foreign affairs minister John Manley worked closely with Homeland Security Director Tom Ridge to secure the Canada-U.S. border, while continuing to promote free trade across it.

Since then, the stature of foreign affairs ministers has declined. Bill Graham was deeply disappointed when Paul Martin replaced him as minister with Pierre Pettigrew, whom Martin kept on a very short leash.

Stephen Harper cycled through a plethora of foreign affairs ministers—Peter MacKay, Maxime Bernier, David Emerson, Lawrence Cannon, Baird and, in the final months, Rob Nicholson.

Justin Trudeau did the same, replacing Stéphane Dion with Chrystia Freeland, then François-Philippe Champagne, then Garneau and finally Joly.

Part of this is the way of the world. In foreign affairs ministries everywhere, from Foggy Bottom to Whitehall to the Quai d’Orsay, diplomats lament that the office of the head of government effectively runs foreign affairs, shunting them aside.

But the declining stature of the Canada’s minister of foreign affairs coincides with the declining stature of Canada within the Western alliance and beyond, which itself is the result of the decline in Canda’s defence capability.

In the 1950s, during the Korean War, Canada’s defence spending reached 7.4 per cent of GDP. On John Diefenbaker’s watch it sat above 4 per cent; on Pearson’s, around 3 per cent.

Pierre Trudeau reduced the size and role of Canada’s military, while seeking to make Canada less closely aligned with the United States. He took defence spending down to 2 per cent of GDP, where Brian Mulroney kept it.

With the end of the Cold War, and with the need to balance the federal budget, defence spending under Jean Chretien and Paul Martin fell to about 1 per cent of GDP, where it largely remained under Stephen Harper and Justin Trudeau.

Other members of NATO are investing heavily in their military in the wake of Russia’s invasion of Ukraine. But Canada continues to lag behind.

Prime Minister Carney promises to increase Canada’s defence commitments while pursuing a more robust foreign and trade policy. We shall see. In any case, Anand should not get too comfortable in her office at the Pearson building. If past is precedent, she may not be there long.

John Ibbitson

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The world needs energy. Canada has the supply. Other nations eagerly fill the demand.

Published on June 4, 2025

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From the Fraser Institute

By Jock Finlayson

Spend time on the websites of Canada’s leading environmental non-governmental organizations (ENGOs) and you will see repeated references to the “energy transition”—the shift away from fossil-fuel energy sources to no- and low-carbon alternatives, to help lower the greenhouse gas (GHG) emissions that lie behind concerns over climate change.

While most countries—albeit not Donald Trump’s America—notionally support the 2015 Paris Agreement goal to limit global temperature increases to between 1.5 and 2.0 degrees centigrade, few are on track to slash their emissions sufficiently to reach that target. Indeed, emissions are still climbing, mainly due to the ravenous appetite for energy in many emerging economies.

Notwithstanding decades of climate change conferences, humanity remains firmly wedded to fossil fuels, which currently supply about four-fifths of global primary energy demand—a share that has fallen only slightly since the late-1990s. Moreover, as Canadian energy scholar Vaclav Smil recently noted, the absolute quantity of fossil fuels consumed by the world has risen by more than half since 1997.

Stupendous amounts of energy are needed to provide electrical power, for heating and cooling, transportation and agriculture, and to support many industrial processes. Today, fossil fuels are ubiquitous in all these areas. Only in the case of electricity have we observed a quantitatively significant move away from fossil fuel energy.

A glance at recent energy supply/demand projections highlights the dominant role of fossil fuels in the world’s energy system. The latest global outlook from multinational giant Shell is a good example.

According to Shell’s 2025 baseline forecast, worldwide demand for energy “will continue to increase as the global population grows and living standards rise.” By 2050, energy demand “could be nearly a quarter higher than in 2024 depending on economic growth rates, energy efficiency gains and the pace of electrification.”

Global oil demand is expected by grow by another 3-5 million barrels per day into the mid-2030s, confounding earlier forecasts of imminent “peak oil” consumption. Shell notes that “petroleum fuels remain affordable and convenient in transport, particularly in long-distance haulage, aviation and marine.” Oil also remains crucial to the petrochemicals sector.

Meanwhile, natural gas use is set to increase into the 2040s at least, with liquefied natural gas (LNG) representing a steadily rising share of the total natural gas market. Natural gas is a principal source of “industrial heat, fuel for power generation and heat for buildings.” It’s also critical to “helping the world move away from coal.”

Significant investments in oil and gas exploration, production, infrastructure and downstream processing “will be required for decades to come.” So much for the argument of Canadian environmental activists that it’s time to starve the oil and gas business of capital.

What are the implications of all of this for Canada?

We are endowed with an almost unmatched abundance of energy riches, notably the world’s third-largest oil reserves and vast amounts of natural gas. Canada is also a global leader in producing electricity from carbon-free sources. And energy plays an outsized role in our economy, directly accounting for one-tenth of GDP and supplying roughly a quarter of the country’s merchandise exports.

As a major energy producer, Canada has well-respected environmental standards and rigorous project approval and permitting processes. These are a long-term competitive advantage.

Even as efforts continue to reduce the carbon intensity of energy use and expand renewable power capacity, a growing world will need prodigious quantities of energy including oil and gas. Canada is well-placed to help meet it.

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Patriotic Millionaires concept of tax ‘fairness’ ignores tax facts in Canada

Published on June 3, 2025

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From the Fraser Institute

By Jake Fuss and Tegan Hill

A group of wealthy Canadians called the “Patriotic Millionaires” recently asked governments in Canada to increase the amount of taxes they pay to “ensure greater fairness” in the system. In particular, the group is calling for a wealth tax and higher taxes on capital gains.

Unfortunately, the Patriotic Millionaires (whose motto is “Tax the rich!”) seem to misunderstand the current distribution of taxes paid by different income groups in Canada and the economic consequences of raising taxes.

The fixation on tax “fairness” (which the Patriotic Millionaires never actually define) is not new in Canada. It was a constant focus of the Trudeau government, which decided to increase “fairness” by increasing the top federal personal income tax rate from 29 per cent to 33 per cent in 2016 and proposing to raise taxes on capital gains in 2024.

These policies, like the Patriotic Millionaires, ignored basic facts about taxes. According to a recent study, the top 20 per cent of income-earning families in Canada paid 54.2 per cent of all federal, provincial and local taxes while earning less than half of the country’s total income (46.4 per cent). These families are the only income group in Canada that pay a larger share of taxes than their share of income.

In contrast, the remaining 80 per cent of Canadian families pay less in taxes than their share of total income. For example, the bottom 20 per cent of income-earning families pay 2.0 per cent of total taxes while earning 5.0 per cent of total income.

Why? Because Canada, like most advanced economies, has a progressive income tax system where government taxes individuals at increasingly higher rates as their income rises. For example, the marginal federal tax rate is 15 per cent on individual incomes up to $57,375 but more than double that rate (33 per cent) on income that exceeds $253,414.

According to the Patriotic Millionaires, Canada needs a “wealth tax,” which taxes a person’s net wealth. But time and time again, wealth taxes have failed to deliver the promised results of proponents. Eight European countries that experimented with wealth taxes have since abandoned them because they were expensive to administer, raised little revenue and imposed enormous costs on their economies. In particular, wealth taxes discourage investment, which is needed to broadly raise living standards and improve prosperity, by prompting people to move their assets away from productive investments (e.g. new businesses) to investments that may be exempt from the tax.

So, if Ottawa implemented a wealth tax, we’d likely see a reallocation of investment away from startups and towards housing (assuming housing remains exempt from the tax). Consequently, companies and investors would have less resources to invest in the technology, machinery and equipment that improve productivity, create jobs and drive higher living standards, particularly for average workers.

The Patriotic Millionaires also want to raise taxes on capital gains, which would have similar negative effects by making it more expensive for individuals and businesses to invest in Canada, leading to stagnant wages and living standards for Canadians.

The Patriotic Millionaires are misguided in their claims about “fairness” in the tax system. High-income earners already pay the majority of all taxes in Canada, and proportionality is one of the only objective measures of fairness with respect to the tax burden. Their policy proposals, if enacted by government, would only harm the economy rather than help it. That wouldn’t be fair to Canadian workers.