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Canada’s economic performance cratered after Ottawa pivoted to the ‘green’ economy

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From the Fraser Institute

By Jason Clemens and Jake Fuss

There are ostensibly two approaches to economic growth from a government policy perspective. The first is to create the best environment possible for entrepreneurs, business owners and investors by ensuring effective government that only does what’s needed, maintains competitive taxes and reasonable regulations. It doesn’t try to pick winners and losers but rather introduces policies to create a positive environment for all businesses to succeed.

The alternative is for the government to take an active role in picking winners and losers through taxes, spending and regulations. The idea here is that a government can promote certain companies and industries (as part of a larger “industrial policy”) better than allowing the market—that is, individual entrepreneurs, businesses and investors—to make those decisions.

It’s never purely one or the other but governments tend to generally favour one approach. The Trudeau era represented a marked break from the consensus that existed for more than two decades prior. Trudeau’s Ottawa introduced a series of tax measures, spending initiatives and regulations to actively constrain the traditional energy sector while promoting what the government termed the “green” economy.

The scope and cost of the policies introduced to actively pick winners and losers is hard to imagine given its breadth. Direct spending on the “green” economy by the federal government increased from $600 million the year before Trudeau took office (2014/15) to $23.0 billion last year (2024/25).

Ottawa introduced regulations to make it harder to build traditional energy projects (Bill C-69), banned tankers carrying Canadian oil from the northwest coast of British Columbia (Bill C-48), proposed an emissions cap on the oil and gas sector, cancelled pipeline developments, mandated almost all new vehicles sold in Canada to be zero-emission by 2035, imposed new homebuilding regulations for energy efficiency, changed fuel standards, and the list goes on and on.

Despite the mountain of federal spending and regulations, which were augmented by additional spending and regulations by various provincial governments, the Canadian economy has not been transformed over the last decade, but we have suffered marked economic costs.

Consider the share of the total economy in 2014 linked with the “green” sector, a term used by Statistics Canada in its measurement of economic output, was 3.1 per cent. In 2023, the green economy represented 3.6 per cent of the Canadian economy, not even a full one-percentage point increase despite the spending and regulating.

And Ottawa’s initiatives did not deliver the green jobs promised. From 2014 to 2023, only 68,000 jobs were created in the entire green sector, and the sector now represents less than 2 per cent of total employment.

Canada’s economic performance cratered in line with this new approach to economic growth. Simply put, rather than delivering the promised prosperity, it delivered economic stagnation. Consider that Canadian living standards, as measured by per-person GDP, were lower as of the second quarter of 2025 compared to six years ago. In other words, we’re poorer today than we were six years ago. In contrast, U.S. per-person GDP grew by 11.0 per cent during the same period.

Median wages (midpoint where half of individuals earn more, and half earn less) in every Canadian province are now lower than comparable median wages in every U.S. state. Read that again—our richest provinces now have lower median wages than the poorest U.S. states.

A significant part of the explanation for Canada’s poor performance is the collapse of private business investment. Simply put, businesses didn’t invest much in Canada, particularly when compared to the United States, and this was all pre-Trump tariffs. Canada’s fundamentals and the general business environment were simply not conducive to private-sector investment.

These results stand in stark contrast to the prosperity enjoyed by Canadians during the Chrétien to Harper years when the focus wasn’t on Ottawa picking winners and losers but rather trying to establish the most competitive environment possible to attract and retain entrepreneurs, businesses, investors and high-skilled professionals. The policies that dominated this period are the antithesis of those in place now: balanced budgets, smaller but more effective government spending, lower and competitive taxes, and smart regulations.

As the Carney government prepares to present its first budget to the Canadian people, many questions remain about whether there will be a genuine break from the policies of the Trudeau government or whether it will simply be the same old same old but dressed up in new language and fancy terms. History clearly tells us that when governments try to pick winners and losers, the strategy doesn’t lead to prosperity but rather stagnation. Let’s all hope our new prime minister knows his history and has learned its lessons.

Jason Clemens

Executive Vice President, Fraser Institute

Jake Fuss

Director, Fiscal Studies, Fraser Institute

Business

Oil tanker traffic surges but spills stay at zero after Trans Mountain Expansion

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From the Canadian Energy Centre

Bigger project maintains decades-long marine safety record

The Trans Mountain system continues its decades-long record of zero marine spills, even as oil tanker traffic has surged more than 800 per cent since the pipeline’s expansion in May 2024.

The number of tankers calling at Trans Mountain’s Westridge Marine Terminal in the Port of Vancouver in one month now rivals the number that used to go through in one year.

A global trend toward safer tanker operations

Trans Mountain’s safe operations are part of a worldwide trend. Global oil tanker traffic is up, yet spills are down, according to the International Tanker Owners Pollution Federation, a London, UK-based nonprofit that provides data and response support.

Graph courtesy International Tanker Owners Pollution Federation

Transport Canada reports a 95 per cent drop in ship-source oil spills and spill volumes since the 1970s, driven by stronger ship design, improved response and better regulations.

“Tankers are now designed much more safely. They are double-hulled and compartmentalized to mitigate spills,” said Mike Lowry, spokesperson for the Western Canada Marine Response Corporation (WCMRC).

WCMRC: Ready to protect the West Coast

One of WCMRC’s new response vessels arrives in Barkley Sound. Photo courtesy Western Canada Marine Response Corporation

From eight marine bases including Vancouver and Prince Rupert, WCMRC stands at the ready to protect all 27,000 kilometres of Canada’s western coastline.

Lowry sees the corporation as similar to firefighters — training to respond to an event they hope they never have to see.

In September, it conducted a large-scale training exercise for a worst-case spill scenario. This included the KJ Gardner — Canada’s largest spill response vessel and a part of WCMRC’s fleet since 2024.

“It’s part of the work we do to make sure everybody is trained and prepared to use our assets just in case,” Lowry said.

Expanding capacity for Trans Mountain

The K.J. Gardner is the largest-ever spill response vessel in Canada. Photo courtesy Western Canada Marine Response Corporation

WCMRC’s fleet and capabilities were doubled with a $170-million expansion to support the Trans Mountain project.

Between 2012 and 2024, the company grew from 13 people and $12 million in assets to more than 200 people and $213 million in assets.

“About 80 per cent of our employees are mariners who work as deckhands, captains and marine engineers on our vessels,” Lowry said.

“Most of the incidents we respond to are small marine diesel spills — the last one was a fuel leak from a forest logging vessel near Nanaimo — so we have deployed our fleet in other ways.”

Tanker safety starts with strong rules and local expertise

Tanker loading at the Westridge Marine Terminal in the Port of Vancouver. Photo courtesy Trans Mountain Corporation

Speaking on the ARC Energy Ideas podcast, Trans Mountain CEO Mark Maki said tanker safety starts with strong regulations, including the use of local pilots to guide vessels into the harbour.

“On the Mississippi River, you have Mississippi River pilots because they know how the river behaves. Same thing would apply here in Vancouver Harbour. Tides are strong, so people who are familiar with the harbor and have years and decades of experience are making sure the ships go in and out safely,” Maki said.

“A high standard is applied to any ship that calls, and our facility has to meet very strict requirements. And we have rejected ships, just said, ‘Nope, that one doesn’t fit the bill.’ A ship calling on our facilities is very, very carefully looked at.”

Working with communities to protect sensitive areas

Beyond escorting ships and preparing for spills, WCMRC partners with coastal communities to map sensitive areas that need rapid protection including salmon streams, clam beds and culturally important sites like burial grounds.

“We want to empower communities and nations to be more prepared and involved,” Lowry said.

“They can help us identify and protect the areas that they value or view as sensitive by working with our mapping people to identify those areas in advance. If we know where those are ahead of time, we can develop a protection strategy for them.”

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Bruce Dowbiggin

Integration Or Indignation: Whose Strategy Worked Best Against Trump?

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““He knows nothing; and he thinks he knows everything. That points clearly to a political career.” George Bernard Shaw

In the days immediately following Donald Trump’s rude intervention into the 2025 Canadian federal election— suggesting Canada might best choose American statehood— two schools of thought emerged.

The first and most impactful school in the short term was the fainting-goat response of Canadian’s elites. Sensing an opening in which to erode Pierre Poilievre’s massive lead in the 2024 polls over Justin Trudeau, the Laurentian elite concocted Elbows Up, a self-pity response long on hurt feelings and short on addressing the issues Trump had cited in his trashing of the Canadian nation state.

In short order they fired Trudeau into oblivion, imported career banker Mark Carney as their new leader in a sham convention and convinced Canada’s Boomers that Trump had the tanks ready to go into Saskatchewan at a moment’s notice. The Elbows Up meme— citing Gordie Howe— clinched the group pout.

(In fact, Trump has said that America is the world’s greatest market, and if those who’ve used it for free in the past [Canada] want to keep special access they need to pay tariffs to the U.S. or drop protectionist charges on dairy and more against the U.S.)

The ruse worked out better than they could have ever imagined with Trump even saying he preferred to negotiate with Carney over Poilievre. In short order the Tories were shoved aside, the NDP kneecapped and the pet media anointed Carney the genius skewing Canada away from its largest trade partner to the Eurosphere. We remain in that bubble, although the fulsome promises of Carney’s first days are now coming due.

Which brings us to the second reaction. That was Alberta premier Danielle Smith bolting to Mar A Lago in the days following Trump’s comments. Her goal was to put pride aside and accept that a new world order was in play for Canada. She met with U.S. officials and, briefly, with Trump to remind them that Canada’s energy industry was integral to American prosperity and Canadian stability.

Needless to say, the fainting goats pitched a fit that not everyone was clutching pearls and rending garments in the wake of Trump’s dismissive assessment of his northern neighbours. Their solution to Trump was to join China in retaliatory tariffs— the only two nations to do so— and to boycott American products and travel. Like the ascetic monks they cut themselves off from real life. Trump has yet to get back to Carney the Magnificent

And Smith? She was a “traitor” or a “subversive” who should be keel hauled in the North Saskatchewan. For much of the intervening months she has been attacked at home in Alberta by the N-Deeps and in Ottawa by just about everyone on CBC, CTV, Global and the Globe & Mail. “How could she meet with the Cheeto?”

Nonetheless conservatives in the province moved toward a more independence within Canada. Smith articulated her demands for Alberta to prevent a referendum on whether to remain within Confederation. At the top of her list were pipelines and access to tidewater. Ergo, a no-go for BC’s squish premier David Eby who is the process of handing over his province to First Nations.

It became obvious that for all of Carney’s alleged diplomacy in Europe and Asia (is the man ever home?) he had a brewing disaster in the West with Alberta and Saskatchewan growing restless. In a striking move against the status quo, Nutrien announced it would ship its potash to tidewater via the U.S., thereby bypassing Vancouver’s strike-prone, outdated port and denying them billions.

Suddenly, Smith’s business approach began making eminent good sense if the goal is to keep Canada as one. So we saw last week’s “memorandum of understanding” between Alberta and Ottawa trading off carbon capture and carbon taxes for potential pipelines to tidewater on the B.C. coast. A little bit of something for everyone and a surrender on other things.

The most amazing feature of the Mark Carney/Danielle Smith MOU is that both politicians probably need the deal to fail. Carney can tell fossil-fuel enemy Quebec that he tried to reason with Smith, and Smith can say she tried to meet the federalists halfway. Failure suits their larger purposes. Which is for Carney to fold Canada into Euro climate insanity and Smith into a strong leverage against the pro-Canada petitioners in her province.

Soon enough, at the AFN Special Chiefs Assembly, FN Chief Cindy Woodhouse Nepinak told Carney that  “Turtle Island” (the FN term for North America popularized by white hippy poet Gary Snyder) belongs to the FN people “from coast to coast to coast.” The pusillanimous Eby quickly piped up about tanker bans and the sanctity of B.C. waters etc.

Others pointed out the massive flaw in a plan to attract private interests to build a vital bitumen pipeline if the tankers it fills are not allowed to  sail through the Dixon Entrance to get to Asia.

But then Eby got Nutrien’s message that his power-sharing with the indigenous might cause other provinces to bypass B.C. (imagine California telling Texas it can’t ship through its ports over moral objections to a product). He’s now saying he’s open to pipelines but not to lift the tanker ban along the coast. Whatever.

Meanwhile the kookaburras of isolation back east continue with virtue signalling on American booze— N.S. to sell off its remains stocks — while dreaming that Trump’s departure will lead to the good-old days of reliance on America’s generosity.

But Smith looks to be wining the race. B.C.’s population shrank 0.04 percent in the second quarter of 2025, the only jurisdiction in Canada to do so. Meanwhile, Alberta is heading toward five million people, with interprovincial migrants making up 21 percent of its growth.

But what did you expect from the Carney/ Eby Tantrum Tandem? They keep selling fear in place of GDP. As GBS observed, “You have learnt something. That always feels at first as if you have lost something.”

Bruce Dowbiggin @dowbboy is the editor of Not The Public Broadcaster  A two-time winner of the Gemini Award as Canada’s top television sports broadcaster, his new book Deal With It: The Trades That Stunned The NHL And Changed hockey is now available on Amazon. Inexact Science: The Six Most Compelling Draft Years In NHL History, his previous book with his son Evan, was voted the seventh-best professional hockey book of all time by bookauthority.org . His 2004 book Money Players was voted sixth best on the same list, and is available via brucedowbigginbooks.ca.

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