Federal government cranked up spending up but Canadians are worse off

“If spending money like water was the answer to our country’s problems,” Margaret Thatcher said in 1980, less than two years after the United Kingdom’s Winter of Discontent, “we would have no problems now. If ever a nation has spent, spent, spent, and spent again, ours has.” That a government cannot spend away the country’s problems is a clear lesson of history. The Trudeau government evidently has not learned this—it has spent, spent and spent more, and the country’s problems have gotten worse.

In 2014-15, before the Liberals took office, federal program spending was 12.8 per cent of GDP (the value of final goods and services produced in Canada). In 2023-24, it’s projected at 15.7 per cent. And relative to 2014-15, annual program spending is $89 billion higher than if it had tracked with overall economic growth.

As Thatcher would have predicted, this extra spending has not solved most problems. Consider health care. The Fraser Institute’s survey of health-care specialists found a median wait time of 27.7 weeks between referral from a general practitioner and receipt of treatment in 2023—a 51 per cent increase versus the 18.3 weeks in 2015. Relative to peer countries, Canada is a big health-care spender but with poor results, and is far below average on key metrics such as physicians and hospital beds per capita.

Another big spending area is climate change. The Liberals boast of pouring more than $120 billion into climate programs, but even with an annually increasing carbon tax and onerous regulation on top of that spending, the government is on track to miss its 2030 climate targets. Given the high cost of its climate policies relative to environmental benefits, that’s not a bad thing. Ottawa’s climate targets are wildly unrealistic, and achieving them would mean devastating the economy further.

Speaking of devasting the economy, when the Trudeau government spends, it claims it will support economic growth, increase affordability or otherwise deliver financial benefits. Eight years in, these benefits have not materialized. As of the third quarter of 2023, after five consecutive quarters of declining real GDP per capita, Canada’s cumulative growth in the past eight years is a paltry 1.6 per cent versus 14.7 per cent in the United States. One way to think about this gap: if Canada’s real GDP per-capita growth tracked with the U.S. since the Liberals took office, Canadian living standards would be about 12.8 per cent higher than they are today.

Finally, the Trudeau government has significantly ramped up child-care spending, but the effect of the national child-care program has been to severely distort and in many cases destroy the child-care sector by applying a discriminatory funding model that pushes child-care entrepreneurs out of the market and discourages private investment. The federal program is composed of separate agreements with the provinces, but with the child-care sector suffering crisis and widespread shortages from coast to coast, it’s reasonable to conclude Ottawa’s plan is fatally flawed.

Wherever you look, the pattern is the same—federal spending is up, but outcomes are worse. The government creates problems and does not solve them when it spends money like water. Margaret Thatcher well understood this fact. Justin Trudeau, unfortunately, evidently does not.

Author:

Matthew Lau

Adjunct Scholar, Fraser Institute

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Business

Rhetoric—not evidence—continues to dominate climate debate and policy

Published on June 18, 2025

Todayville

From the Fraser Institute

By Kenneth P. Green

Myths, fallacies and ideological rhetoric continue to dominate the climate policy discussion, leading to costly and ineffective government policies,
according to a new study published today by the Fraser Institute, an independent, nonpartisan Canadian public policy think-tank.

“When considering climate policies, it’s important to understand what the science and analysis actually show instead of what the climate alarmists believe to be true,” said Kenneth P. Green, Fraser Institute senior fellow and author of Four Climate Fallacies.

The study dispels several myths about climate change and popular—but ineffective—emission reduction policies, specifically:

• Capitalism causes climate change: In fact, according to several environment/climate indices and the Fraser Institute’s annual Economic Freedom of the World Index, the more economically free a country is, the more effective it is at protecting its environment and combatting climate change.

• Even small-emitting countries can do their part to fight climate change: Even if Canada reduced its greenhouse gas emissions to zero, there would be
little to no measurable impact in global emissions, and it distracts people from the main drivers of emissions, which are China, India and the developing
world.

• Vehicle electrification will reduce climate risk and clean the air: Research has shown that while EVs can reduce GHG emissions when powered with
low-GHG energy, they often are not, and further, have offsetting environmental harms, reducing net environmental/climate benefits.

• Carbon capture and storage is a viable strategy to combat climate change: While effective at a small scale, the benefits of carbon capture and
storage to reduce global greenhouse gas emissions on a massive scale are limited and questionable.

“Citizens and their governments around the world need to be guided by scientific evidence when it comes to what climate policies make the most sense,” Green said.

“Unfortunately, the climate policy debate is too often dominated by myths, fallacies and false claims by activists and alarmists, with costly and ineffective results.”

Four Climate Fallacies

This study examines four climate narratives circulating in public discourse regarding climate change.
Fallacy 1: Climate Change Is Caused by Capitalism. As we will observe, this is backward: the more capitalist a country is, the more effective it is at protecting its environment and combatting climate change.
Fallacy 2: Even Small-Emitting Countries Can Do Their Part to Fight Climate Change. Again, in reality, even a casual inspection of the emission trends and projections of large-emitting countries such as China would reveal that for small-emitting countries like Canada, even driving their greenhouse gas emissions to zero would have no measurable impact in reducing climate risk.
Fallacy 3: Vehicle Electrification Will Reduce Climate Risk and Clean the Air. However, when looking beyond the hype, it becomes evident that vehicle electrification presents an array of climate and environmental benefits and harms that extend beyond climate change.
Fallacy 4: Carbon Capture and Storage Is a Viable Strategy to Combat Climate Change. This fallacy, most popular with those in the fossil fuel industry and those of a more market-oriented and politically conservative bent, is no more realistic than the previous three. An examination of the history, effectiveness, and efficiency of carbon capture and storage suggests that it is a far more limited approach to regulating greenhouse gas concentrations in the atmosphere than proponents suggest.

READ THE FULL STUDY

Kenneth P. Green

Senior Fellow, Fraser Institute

Education

Students can’t use AI to cheat on standardized tests

Published on June 18, 2025

Todayville

From the Fraser Institute

By Michael Zwaagstra

As the schoolyear winds down, many students across Canada will hand in their final assignments and write their final exams. Cutting corners and outright cheating in school is easier than ever. If you need to write an essay, just plug in the assignment instructions and let artificial intelligence (AI) write it for you.

A recent New York Magazine article provided numerous examples of college students using AI to write formal essays, generate programming code, and even draft personalized notes. Whether you need help creating an outline, finding relevant sources or writing an introduction, AI can do all these things and more.

Many K-12 students also use AI for their assignments. Anyone who is worried about being caught just needs to tell ChatGPT (or whichever AI program they use) to make it look like the essay was written by a high school student.

Catching cheaters is nearly impossible—and it’s getting harder as AI gets increasingly sophisticated. Even so-called AI detectors like Turnitin, which scan essays for patterns that indicate the use of AI, are far from perfect. In other words, there’s no easy or low-cost way to prevent students from using AI on their homework assignments.

Obviously, this is a significant problem. If students use AI to do most of their homework, they aren’t going to learn important academic skills. This does not bode well for their future or the general productivity of our labour force.

Fortunately, there’s one academic measurement tool available that AI cannot interfere with—in-person standardized tests, which are administered to all students in a particular grade at the same time and are assessed by outside evaluators using consistent criteria. They can be grade-level tests or exams that are required for graduation.

For example, Grade 12 students in Alberta must write diploma exams in core subjects such as English language arts, mathematics, social studies and science. These exams are created by the provincial Ministry of Education and are marked centrally by a group of teachers. They count for 30 per cent of a student’s final grade, with the remaining 70 per cent coming from the school-awarded mark.

Because all students must write the same exam and are evaluated according to the same standard, it’s possible to objectively determine whether students have met the appropriate academic outcomes. Importantly, students cannot use AI when writing these exams since all diploma exams are strictly supervised.

Thus, even if some students had, for example, used AI to write their English essays at home, their diploma exam marks will reveal the true level of their writing ability. If there are significant discrepancies between the diploma exam mark and the school-awarded mark, this can indicate where changes need to be made.

Unfortunately, many provinces do not have diploma exams, and this leaves their schools more susceptible to cheating with AI. For example, while British Columbia requires all Grade 12 students to write (but not pass) a literacy assessment, this assessment does not count toward a student’s final grade. Even worse, the assessment is “not based on a particular subject matter or course.” Thus, the B.C. literacy assessment has little value in combating the problem of AI cheating. This puts the burden of catching cheaters entirely on teachers and principals.

To make matters worse, standardized testing is on the decline across the country. Over the last decade in most provinces, standardized tests have been administered at fewer grade levels, given less value by provincial governments, and turned into non-content specific assessments. This is exactly the wrong direction.

If provincial education ministries are serious about maintaining academic standards, they must ensure that students write standardized tests at multiple grade levels and in a variety of subjects. Students need to know that their performance on these tests will impact their final marks and that they only hurt themselves academically if they get AI to do their work for them.

When it comes to AI, we cannot put our heads in the sand. Since AI isn’t going away, it’s important that we assess students with measurement tools where students cannot use AI to cheat.

Instead of moving away from standardized testing, every province should embrace and enhance this important measurement tool. It’s the best way to ensure all students meet basic academic standards.