By Gwyn Morgan

Mark Carney was supposed to be the adult in the room. After nearly a decade of runaway spending under Justin Trudeau, the former central banker was presented to Canadians as a steady hand – someone who could responsibly manage the economy and restore fiscal discipline.

Instead, Carney has taken Trudeau’s recklessness and dialled it up. His government’s recently released spending plan shows an increase of 8.5 percent this fiscal year to $437.8 billion. Add in “non-budgetary spending” such as EI payouts, plus at least $49 billion just to service the burgeoning national debt and total spending in Carney’s first year in office will hit $554.5 billion.

Even if tax revenues were to remain level with last year – and they almost certainly won’t given the tariff wars ravaging Canadian industry – we are hurtling toward a deficit that could easily exceed 3 percent of GDP, and thus dwarf our meagre annual economic growth. It will only get worse. The Parliamentary Budget Officer estimates debt interest alone will consume $70 billion annually by 2029. Fitch Ratings recently warned of Canada’s “rapid and steep fiscal deterioration”, noting that if the Liberal program is implemented total federal, provincial and local debt would rise to 90 percent of GDP.

This was already a fiscal powder keg. But then Carney casually tossed in a lit match. At June’s NATO summit, he pledged to raise defence spending to 2 percent of GDP this fiscal year – to roughly $62 billion. Days later, he stunned even his own caucus by promising to match NATO’s new 5 percent target. If he and his Liberal colleagues follow through, Canada’s defence spending will balloon to the current annual equivalent of $155 billion per year. There is no plan to pay for this. It will all go on the national credit card.

This is not “responsible government.” It is economic madness.

And it’s happening amid broader economic decline. Business investment per worker – a key driver of productivity and living standards – has been shrinking since 2015. The C.D. Howe Institute warns that Canadian workers are increasingly “underequipped compared to their peers abroad,” making us less competitive and less prosperous.

The problem isn’t a lack of money; it’s a lack of discipline and vision. We’ve created a business climate that punishes investment: high taxes, sluggish regulatory processes, and politically motivated uncertainty. Carney has done nothing to reverse this. If anything, he’s making the situation worse.

Recall the 2008 global financial meltdown. Carney loves to highlight his role as Bank of Canada Governor during that time but the true credit for steering the country through the crisis belongs to then-prime minister Stephen Harper and his finance minister, Jim Flaherty. Facing the pressures of a minority Parliament, they made the tough decisions that safeguarded Canada’s fiscal foundation. Their disciplined governance is something Carney would do well to emulate.

Instead, he’s tearing down that legacy. His recent $4.3 billion aid pledge to Ukraine, made without parliamentary approval, exemplifies his careless approach. And his self-proclaimed image as the experienced technocrat who could go eyeball-to-eyeball against Trump is starting to crack. Instead of respecting Carney, Trump is almost toying with him, announcing in June, for example that the U.S. would pull out of the much-ballyhooed bilateral trade talks launched at the G7 Summit less than two weeks earlier.

Ordinary Canadians will foot the bill for Carney’s fiscal mess. The dollar has weakened. Young Canadians – already priced out of the housing market – will inherit a mountain of debt. This is not stewardship. It’s generational theft.

Some still believe Carney will pivot – that he will eventually govern sensibly. But nothing in his actions supports that hope. A leader serious about economic renewal would cancel wasteful Trudeau-era programs, streamline approvals for energy and resource projects, and offer incentives for capital investment. Instead, we’re getting more borrowing and ideological showmanship.

It’s no longer credible to say Carney is better than Trudeau. He’s worse. Trudeau at least pretended deficits were temporary. Carney has made them permanent – and more dangerous.

This is a betrayal of the fiscal stability Canadians were promised. If we care about our credit rating, our standard of living, or the future we are leaving our children, we must change course.

That begins by removing a government unwilling – or unable – to do the job.

Canada once set an economic example for others. Those days are gone. The warning signs – soaring debt, declining productivity, and diminished global standing – are everywhere. Carney’s defenders may still hope he can grow into the job. Canada cannot afford to wait and find out.

The original, full-length version of this article was recently published in C2C Journal.

Gwyn Morgan is a retired business leader who was a director of five global corporations.

By Michael Bonner

The 21 st century is going to be overshadowed by a crisis that human beings have never faced before. I don’t mean war, pestilence, famine or climate change. Those are perennial troubles. Yes, even climate change, despite the hype, is nothing new as anyone who’s heard of the Roman Warm Period, the Mediaeval Warm Period or the Little Ice Age will know. Climate change and the others are certainly problems, but they aren’t new.

But the crisis that’s coming is new.

The global decline in fertility rates has grown so severe that some demographers now talk about “peak humanity” – a looming maximum from which the world’s population will begin to rapidly decline. Though the doomsayers who preach the dangers of overpopulation may think that’s a good development, it is in fact a grave concern.

In the Canadian context, it is doubly worrisome. Our birth rates have been falling steadily since 1959. It was shortly after that in the 1960s when we began to build a massive welfare state, and we did so despite a shrinking domestically-born population and the prospect of an ever-smaller pool of taxable workers to pay for the expanding social programs.

Immigration came to the rescue, and we became adept at recruiting a surplus population of young, skilled, economically focused migrants seeking their fortune abroad. The many newcomers meant a growing population and with it a larger tax base.

But what would happen if Canada could no longer depend on a steady influx of newcomers? The short answer is that our population would shrink, and our welfare state would come under intolerable strain. The long answer is that Canadian businesses, which have become addicted to abundant, cheap foreign labour through the Temporary Foreign Worker Program, would be obliged to invest in hiring, training and retaining Canadian workers.
Provincial and federal governments would scramble to keep older Canadians in the workforce for longer. And governments would be torn between demands to cut the welfare state or privatize large parts of it while raising taxes to help pay for it.

No matter what, the status quo won’t continue. And – even though Canada is right now taking in record numbers of new immigrants and temporary workers – we are going to discover this soon. The main cause is the “peak humanity” that I mentioned before. Fertility rates are falling rapidly nearly everywhere. In the industrialized West, births have fallen further in some places than in others, but all countries are now below replacement levels
(except Israel, which was at 2.9 in 2020).

Deaths have long been outpacing births in China, Japan and some Western countries like Italy. A recent study in The Lancet expects that by 2100, 97 percent of countries will be shrinking. Only Western and Eastern sub-Saharan Africa will have birth rates above replacement levels, though births will be falling in those regions also.

In a world of sub-replacement fertility, there will still be well-educated, highly skilled people abroad. But there will not be a surplus of them. Some may still be ready and willing to put down roots in Canada, but the number will soon be both small and dwindling. And it seems likely that countries which have produced Canada’s immigrants in recent years will try hard to retain domestic talent as their own populations decline. In contrast, the population of sub-Saharan Africa will be growing for a little longer. But unless education and skills-training change drastically in that region, countries there will not produce the kind of skilled immigrants that Canada has come to rely on.

And so the moment is rapidly approaching when immigration will no longer be able to make up for falling Canadian fertility. Governments will have to confront the problem directly—not years or decades hence, but now.

While many will cite keeping the welfare state solvent as the driving force, in my view this is not the reason to do it. The reason to do it is that it is in Canada’s national interest to make it easier for families to have the number of children that they want. A 2023 study by the think-tank Cardus found that nearly half of Canadian women at the end of their reproductive years had fewer children than they had wanted. This amounted to an average
of 0.5 fewer children per woman – a shortfall that would lift Canada close to replacement level.

The United Nations Population Fund (UNPF) has noticed the same challenge on a global scale. Neither Cardus nor the UNPF prescribes any specific solutions, but their analysis points to the same thing: public policy should focus on identifying and removing barriers families face to having the number of children they want.

Every future government should be vigilant against impediments to family-formation and raising a desired number of children. Making housing more abundant and affordable would surely be a good beginning. Better planning must go into making livable communities (not merely atomized dwellings) with infrastructure favouring families and designed to ease commuting. But more fundamentally, policy-makers will need to ask and answer an uncomfortable question: why did we allow barriers to fertility to arise in the first place?

The original, full-length version of this article was recently published in C2C Journal.

Michael Bonner is a political consultant with Atlas Strategic Advisors, LLC, contributing editor to the Dorchester Review, and author of In Defense of Civilization: How Our Past Can Renew Our Present.