The broadest measure of living standards showed almost no improvement over the Trudeau government’s 10-year reign. Contrast that with the 26.2 per cent increase in per-person GDP during the 10-year era of the Chrétien government and one gets a sense of the enormity of the foregone prosperity during the Trudeau era.
Sufficient time has passed—from Justin Trudeau stepping down as prime minister and the Carney government introducing changes—to look back and document the Trudeau government’s policies and their effects. Such reflection offers lessons for the new government as it considers its own policy options.
The Trudeau era is best characterized as a marked expansion of the role and scope of the federal government in the economy and broader society.
One measure of the size of the federal government is government spending as a share of the economy (i.e. GDP), which increased from 12.9 per cent in 2014/15, the year before Trudeau was elected, to an estimated 16.0 per cent in 2024/25. Though this might seem like a small change, remember it’s measured relative to the entire Canadian economy (which was over $3 trillion in 2024). So small percentage-point changes represent tens of billions of dollars reallocated away from Canadian families, entrepreneurs and businesses to finance spending by Ottawa.
In dollars, federal spending (excluding interest costs on debt) is expected to nearly double from $256.2 billion in 2014/15 to an estimated $489.7 billion in 2024/25 (nominal).
The Trudeau government recorded the six-highest levels of per-person federal spending in Canadian history (adjusted for inflation)—higher than during both world wars, the deep recession of the early 1980s and the financial crisis of 2008/09.
Federal government employment skyrocketed from 257,138 in 2014 to 357,965 in 2025, an increase of 39.2 per cent. For context, the Canadian population increased by 16.6 per cent during this period.
And despite federal revenues increasing from $279.9 billion in 2014/15 to an estimated $495.2 billion in 2024-25 (nominal), the federal government borrowed extensively to finance its expansion. Specifically, total federal debt increased from $1.06 trillion in 2014/15 to a projected $2.15 trillion.
The Trudeau government introduced new programs and expanded existing ones.
For instance, financial assistance to families with children under 18 (now called the Canada Child Benefit) was massively expanded, growing from $14.3 billion in 2014/15 to an estimated $28.2 billion in 2024-25 (nominal).
Direct spending on Indigenous peoples almost tripled to $32.0 billion, which doesn’t include the massive increase in the number and value of lawsuits government has settled with First Nations.
And transfers to the provinces for health care, social services and equalization increased from $61.4 billion in 2014/15 to a projected $94.3 billion in 2024-25 (nominal).
Again, the Trudeau government also introduced a host of new programs including national dental care, pharmacare and daycare. The expected spending on these new programs is not incidental—estimates from the Parliamentary Budgetary Officer suggest combined annual costs could reach $12.3 billion this year (2025/26). And critically, all three programs are in areas of provincial responsibility, which has increased federal-provincial tensions.
The Trudeau era also included a marked expansion in regulations, particularly related to the government’s pursuit of “net-zero” by 2050, which includes restricting growth in the oil and gas sector and broad regulation of the economy including, for instance, new regulations on homebuilding.
The guiding principle of the Trudeau government—which was a marked break from the previous Harper, Martin and Chrétien governments—was that more spending, taxing and regulating by Ottawa leads to greater economic growth and prosperity for Canadians. That promise of government-led growth and prosperity can now be tested, and hopefully inform the new Liberal government about the foibles of trying to achieve prosperity through more government.
Canada’s economy grew at an average annual rate of 1.9 per cent between 2016 and 2024 (inflation-adjusted). While 1.9 per cent annual growth is positive (albeit lackluster), this ignores population changes. When we adjust for population to examine changes in per-person GDP (a common indicator of living standards), average annual growth drops to a meagre 0.3 per cent over the period (inflation-adjusted). To put this into perspective, according to an analysis by the former chief analyst at Statistics Canada, that recent growth in per-person GDP in Canada was the worst on record since the Great Depression.
Specifically, per-person GDP (inflation-adjusted) stood at $57,491 at the end of 2015 when Trudeau was first elected. In the first quarter of 2025, when Trudeau resigned, it reached $59,146 (again inflation-adjusted)—an increase of just 2.9 per cent over the entire 10-year period. In other words, the broadest measure of living standards showed almost no improvement over the Trudeau government’s 10-year reign. Contrast that with the 26.2 per cent increase in per-person GDP (inflation-adjusted) during the 10-year era of the Chrétien government (from the end of 1993 to the end of 2003) and one gets a sense of the enormity of the foregone prosperity during the Trudeau era.
At the heart of Canada’s dismal economic performance during the Trudeau era is a collapse in business investment and confidence more broadly. On average, during the Trudeau years, business investment in factories, warehouses, machinery and equipment declined by 0.5 per cent each year (inflation-adjusted) compared to the positive average annual growth of 5.5 per cent under the Chrétien government.
Even if private business investment is more broadly measured to include housing, which was the one bright spot in the investment data during the Trudeau era, the average annual increase in business investment (inflation-adjusted) is a meagre 0.1 per cent compared to 5.2 per cent under Chrétien.
Simply put, businesses and private investors lost confidence in Canada. Indeed, the media, including international media, was littered with stories about Canada being a place where business could not get done.
Another way to illustrate just how much the private sector struggled during the Trudeau era is to compare private versus government-sector employment. From 2015 to 2024, private-sector employment (including self-employment) increased by 13.4 per cent compared to 27.0 per cent for government-sector employment (federal, provincial and local). During the Chrétien era, it was the opposite—government-sector employment grew by 4.7 per cent compared to 27.4 per cent for the private sector.
Getting an historical perspective of the policies, their effects and the performance of the federal government during the Trudeau era is important for the current government to learn from past mistakes and avoid making them again. The clear lesson is that bigger government does not lead to economic growth or prosperity but rather to stagnation and serious debt accumulation. With this information, the Carney government should be armed with evidence that a new direction is needed to achieve better results that improve the living standards of Canadians.
Jason Clemens
Executive Vice President, Fraser Institute
Grady Munro
Policy Analyst, Fraser Institute
Milagros Palacios
Director, Addington Centre for Measurement, Fraser Institute
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To anyone who thought that the Liberals’ decision to postpone enforcement of their Electric Vehicle (EV) mandate by one year was part of a well-thought-out plan to get that disastrous program back on track, well, every day brings with it news that you were wrong. In fact, the whole project seems to be coming apart at the seams.
Here’s the latest crisis Mark Carney and his carnival of ideologues are having to deal with. Late last year, the Liberal party instituted a 100% tariff on Chinese-made EVs. The idea was to protect the Canadian EV industry from China dumping their vehicles into our country, at prices far lower than Canadian companies can afford due to their massive state subsidies. This has been a major problem in the EU, which is also attempting to force a transition to EVs.
But Beijing wasn’t going to take that lying down. Taking advantage of Western environmentalist sentiment is an important part of their economic plans — see, for instance, how they’ve cornered the global solar panel market, though the factories making them are powered by massive amounts of coal. So they retaliated with a 75% duty on Canadian canola seed and a 100% tariff on canola oil and canola meal.
This was big enough to really hurt Canadian farmers, and Ottawa was forced to respond with more than $300 million in new relief programs for canola producers. Even so, our farmers have warned that short-term relief from the government will do little if the tariffs are here for the long-term.
With pressure on Carney mounting, his Industry Minister Melanie Joly announced that the government was “looking at” dropping tariffs on Chinese EVs in the hope that China would ease off on their canola tariffs.
That may be good news for canola producers, but how about the automotive companies? They’ve grown increasingly unhappy with the EV mandate, as Canadian consumers have been slow to embrace them, and they’ve been confronted with the prospect of paying significant fines unless they raise prices on the gas-and-diesel driven vehicles which consumers actually want to make the EVs that they don’t really want more attractive.
That’s the context for Brian Kingston, CEO of the Canadian Vehicle Manufacturers’ Association, saying that dropping these tariffs “would be a disaster.”
“China has engaged in state-supported industrial policy to create massive overcapacity in EV production, and that plan is coming to fruition now,” Kingston said. “When you combine that with weak labour and environmental standards, Chinese manufacturers are not competing with Canadian, American, or Mexican manufacturers on a level playing field. We simply cannot allow those vehicles to be dumped into the Canadian market.”
The auto manufacturers Kingston represents are understandably upset about suddenly having to compete with underpriced Chinese EVs. After all, with the government forcing everyone to buy a product they really don’t want, are most people going to patriotically pay more for that product, or will they just grab whichever one is cheaper? I know which one I think is more likely.
And then there’s a related problem — the federal and provincial governments have “invested” somewhere in the neighborhood of $52.5 billion to make Canada a cog in the global EV supply chain. In response to Joly’s announcement, Ontario Premier Doug Ford, who has gone “all in” on EVs, wrote an open letter to the prime minister saying that canceling the tariffs would mean losing out on that “investment,” and put 157,000 Canadian automotive jobs at risk.
Now, it’s worth noting that automakers all over Ontario have already been cutting jobs while scaling back their EV pledges. So even with the tariffs, this “investment” hasn’t been paying out particularly well. Keeping them in place just to save Doug Ford’s bacon seems like the worst of all options.
But it seems to me that the key to untangling this whole mess has been the option I’ve been advocating from the beginning: repeal the EV mandate. That makes Canada less of a mark for China. It benefits the taxpayers by not incentivizing our provincial and federal governments to throw good money after bad, attempting to subsidize companies to protect a shrinking number of EV manufacturing jobs.
The heart of this trade war is an entirely artificial demand for EVs. Removing the mandate from the equation would lower the stakes.
In the end, the best policy is to trust Canadians to make their own decisions. Let the market decide.
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ParentsTogether Action and Heat Initiative, following a joint investigation, report that Character AI chatbots display inappropriate behavior, including allegations of grooming and sexual exploitation.
This was seen over 50 hours of conversation with different Character AI chatbots using accounts registered to children ages 13-17, according to the investigation. These conversations identified 669 sexual, manipulative, violent and racist interactions between the child accounts and AI chatbots.
“Parents need to understand that when their kids use Character.ai chatbots, they are in extreme danger of being exposed to sexual grooming, exploitation, emotional manipulation, and other acute harm,” said Shelby Knox, director of Online Safety Campaigns at ParentsTogether Action. “When Character.ai claims they’ve worked hard to keep kids safe on their platform, they are lying or they have failed.”
These bots also manipulate users, with 173 instances of bots claiming to be real humans.
A Character AI bot mimicking Kansas City Chiefs quarterback Patrick Mahomes engaged in inappropriate behavior with a 15-year-old user. When the teen mentioned that his mother insisted the bot wasn’t the real Mahomes, the bot replied, “LOL, tell her to stop watching so much CNN. She must be losing it if she thinks I could be turned into an ‘AI’ haha.”
The investigation categorized harmful Character AI interactions into five major categories: Grooming and Sexual Exploitation; Emotional Manipulation and Addiction; Violence, Harm to Self and Harm to Others; Mental Health Risks; and Racism and Hate Speech.
Other problematic AI chatbots included Disney characters, such as an Eeyore bot that told a 13-year-old autistic girl that people only attended her birthday party to mock her, and a Maui bot that accused a 12-year-old of sexually harassing the character Moana.
Based on the findings, Disney, which is headquartered in Burbank, Calif., issued a cease-and-desist letter to Character AI, demanding that the platform stop due to copyright violations.
ParentsTogether Action and Heat Initiative want to ensure technology companies are held accountable for endangering children’s safety.
“We have seen tech companies like Character.ai, Apple, Snap, and Meta reassure parents over and over that their products are safe for children, only to have more children preyed upon, exploited, and sometimes driven to take their own lives,” said Sarah Gardner, CEO of Heat Initiative. “One child harmed is too many, but as long as executives like Karandeep Anand, Tim Cook, Evan Spiegel and Mark Zuckerberg are making money, they don’t seem to care.”
