Economy
Federal budget: You can’t solve a productivity emergency with tax hikes

News release from the Montreal Economic Institute
- Ottawa still has no plan to return to a balanced budget.
- Under Justin Trudeau, the federal government has hired over 98,000 new bureaucrats.
Montreal, April 16, 2024 – The increase in the capital gains tax inclusion rate will further exacerbate Canada’s productivity lag, asserted the Montreal Economic Institute in response to the publication of the federal budget this afternoon.
“Canada’s productivity is in crisis and the best way to get it back up is to attract new investments,” explains Renaud Brossard, Vice-President of Communications at the MEI. “And few are those who have been able to lure investments and job creators with promises of higher taxes.
“With this budget, the Trudeau government is shooting us in the foot.”
In the budget, the Trudeau government has announced the capital gains inclusion rate from 50 per cent to 66 per cent for capital gains superior to $250,000 per year.
Last March, the deputy governor of the Bank of Canada, Carolyn Rogers, spoke of a “productivity emergency” in Canada.
Canadians rank second to last among G7 countries in terms of productivity per hour worked, according to an MEI study published last August.
The Institute explains that this lag arises from a shortfall in private non-residential investment. In 2018, this investment amounted to an estimated $27,307 per American worker, but only $17,389 per Canadian worker.
“Every dollar the government expects to subtract from the pockets of investors with this tax hike is a dollar of potential investment lost,” explains Brossard. “It’s time for the Trudeau government to realize it doesn’t have a revenue problem, but rather a spending problem.”
The budget tabled by the Trudeau government today forecasts a shortfall of $39.8 billion for the year 2024-2025.
High interest rates are contributing to this situation, with interest payments on the federal debt estimated to reach $54.1 billion dollars this year, up 14.6 per cent over last year.
The MEI observes that one of the major sources of increased spending is the massive hiring of federal public servants under the Trudeau government.
Since the first Trudeau budget in 2016, the federal public service workforce has grown by more than 98,268 employees. Considered in terms of the number of government employees per Canadian, this represents a 28% increase according to an MEI study published in January.
“The explosion in the number of bureaucrats in recent years is symptomatic of a government that has lost all control over the growth of its spending,” explains Brossard. “There are now 28 per cent more federal public servants per capita, but very few Canadians would tell you that Ottawa is doing 28 per cent more for them.”
* * *
The MEI is an independent public policy think tank with offices in Montreal and Calgary. Through its publications, media appearances, and advisory services to policy-makers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.
Alberta
Pierre Poilievre – Per Capita, Hardisty, Alberta Is the Most Important Little Town In Canada

From Pierre Poilievre
Business
Why it’s time to repeal the oil tanker ban on B.C.’s north coast

The Port of Prince Rupert on the north coast of British Columbia. Photo courtesy Prince Rupert Port Authority
From the Canadian Energy Centre
By Will Gibson
Moratorium does little to improve marine safety while sending the wrong message to energy investors
In 2019, Martha Hall Findlay, then-CEO of the Canada West Foundation, penned a strongly worded op-ed in the Globe and Mail calling the federal ban of oil tankers on B.C.’s northern coast “un-Canadian.”
Six years later, her opinion hasn’t changed.
“It was bad legislation and the government should get rid of it,” said Hall Findlay, now director of the University of Calgary’s School of Public Policy.
The moratorium, known as Bill C-48, banned vessels carrying more than 12,500 tonnes of oil from accessing northern B.C. ports.
Targeting products from one sector in one area does little to achieve the goal of overall improved marine transport safety, she said.
“There are risks associated with any kind of transportation with any goods, and not all of them are with oil tankers. All that singling out one part of one coast did was prevent more oil and gas from being produced that could be shipped off that coast,” she said.
Hall Findlay is a former Liberal MP who served as Suncor Energy’s chief sustainability officer before taking on her role at the University of Calgary.
She sees an opportunity to remove the tanker moratorium in light of changing attitudes about resource development across Canada and a new federal government that has publicly committed to delivering nation-building energy projects.
“There’s a greater recognition in large portions of the public across the country, not just Alberta and Saskatchewan, that Canada is too dependent on the United States as the only customer for our energy products,” she said.
“There are better alternatives to C-48, such as setting aside what are called Particularly Sensitive Sea Areas, which have been established in areas such as the Great Barrier Reef and the Galapagos Islands.”
The Business Council of British Columbia, which represents more than 200 companies, post-secondary institutions and industry associations, echoes Hall Findlay’s call for the tanker ban to be repealed.
“Comparable shipments face no such restrictions on the East Coast,” said Denise Mullen, the council’s director of environment, sustainability and Indigenous relations.
“This unfair treatment reinforces Canada’s over-reliance on the U.S. market, where Canadian oil is sold at a discount, by restricting access to Asia-Pacific markets.
“This results in billions in lost government revenues and reduced private investment at a time when our economy can least afford it.”
The ban on tanker traffic specifically in northern B.C. doesn’t make sense given Canada already has strong marine safety regulations in place, Mullen said.
Notably, completion of the Trans Mountain Pipeline expansion in 2024 also doubled marine spill response capacity on Canada’s West Coast. A $170 million investment added new equipment, personnel and response bases in the Salish Sea.
“The [C-48] moratorium adds little real protection while sending a damaging message to global investors,” she said.
“This undermines the confidence needed for long-term investment in critical trade-enabling infrastructure.”
Indigenous Resource Network executive director John Desjarlais senses there’s an openness to revisiting the issue for Indigenous communities.
“Sentiment has changed and evolved in the past six years,” he said.
“There are still concerns and trust that needs to be built. But there’s also a recognition that in addition to environmental impacts, [there are] consequences of not doing it in terms of an economic impact as well as the cascading socio-economic impacts.”
The ban effectively killed the proposed $16-billion Eagle Spirit project, an Indigenous-led pipeline that would have shipped oil from northern Alberta to a tidewater export terminal at Prince Rupert, B.C.
“When you have Indigenous participants who want to advance these projects, the moratorium needs to be revisited,” Desjarlais said.
He notes that in the six years since the tanker ban went into effect, there are growing partnerships between B.C. First Nations and the energy industry, including the Haisla Nation’s Cedar LNG project and the Nisga’a Nation’s Ksi Lisims LNG project.
This has deepened the trust that projects can mitigate risks while providing economic reconciliation and benefits to communities, Dejarlais said.
“Industry has come leaps and bounds in terms of working with First Nations,” he said.
“They are treating the rights of the communities they work with appropriately in terms of project risk and returns.”
Hall Findlay is cautiously optimistic that the tanker ban will be replaced by more appropriate legislation.
“I’m hoping that we see the revival of a federal government that brings pragmatism to governing the country,” she said.
“Repealing C-48 would be a sign of that happening.”
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