Economy
Federal government’s fiscal plan raises red flags

From the Fraser Institute
By Jason Clemens, Jake Fuss and Grady Munro
The Trudeau government recently released its fiscal update, which provides revised estimates of spending, taxing and borrowing. A careful examination of the update raises several red flags about the state of Canada’s national finances.
First, some analyses raised concerns about the state of federal borrowing, which are well founded. While the government downplays the level of potential borrowing over the six years covered in the fiscal update, the projected deficit—that is, the amount of spending in a specific year in excess of the amount of revenues—will reach $40.0 billion this year (2023-24) and $38.4 billion next year. However, the estimate for next year does not include the national pharmacare plan that the Trudeau government has agreed to as part of its governing agreement with the NDP.
The Parliamentary Budget Officer (PBO) estimated that a national pharmacare plan modelled on the Quebec system would cost $11.2 billion in 2024-25 (the provinces would likely cover some of this). The 2019 report of the Advisory Council on the Implementation of National Pharmacare, better known as the Hoskins Commission, estimated that a national pharmacare program would cost $15.3 billion in 2027.
Consequently, if the government introduces national pharmacare next year, without any offsetting reduction in other spending and/or meaningful tax increases, the deficit for 2024-25 would reach $49.6 billion, not the reported $38.4 billion. The higher borrowing needed to finance pharmacare continues each and every year, meaning that the overall level of federal debt would also increase.
A second red flag, which the fiscal update ignored, relates to Canada meeting its international commitment for defence spending. Canada is a party to the NATO agreement calling on member countries to spend 2.0 per cent of GDP on national defence. In 2022, Canada spent just 1.3 per cent of GDP on defence. According to the PBO, for the federal government to meet its NATO spending obligations next year (2024-25), it must spend an additional $14.5 billion. That means annual borrowing could be as high as $64.1 billion if both additional defence and pharmacare spending were financed entirely by new borrowing.
And there are legitimate reasons to believe the government would not raise taxes to finance a new pharmacare program. According to polling data in 2022, 79 per cent of survey respondents supported a new national pharmacare program—but support plummeted to just 40 per cent when the new hypothetical program was financed by higher taxes, specifically a higher GST.
That brings us to the third red flag. The total national debt will reach a projected $2.1 trillion next year (excluding the additional potential spending and borrowing noted on pharmacare and defence) and the interest costs on that debt are expected to reach $52.4 billion. For reference, the total national debt stood at $1.1 trillion in 2015-16 when the Trudeau Liberals took office.
By 2028-29, the last year included in the fiscal update, the federal government expects interest costs to reach $60.7 billion. That’s only slightly less than total planned health-care spending by Ottawa for the same year ($62.9 billion). And this is actually a conservative estimate since it excludes potential higher borrowing for programs such as pharmacare and thus higher debt levels. It also ignores any possibility of a downgrading in the ratings for Canada’s debt, which would result in higher interest costs. And it ignores the risk of an economic slowdown or recession that would further increase borrowing and ultimately debt interest costs.
While the federal government, particularly the prime minister and his finance minister, continue to describe their stewardship of federal finances as prudent and responsible, close examination of their fiscal update reveals that federal finances may soon deteriorate from their already worrying position.
Authors:
Business
Ottawa foresees a future of despair for Canadians. And shrugs

This article supplied by Troy Media.
By Lee Harding
A government report envisions Canadians foraging for food by 2040. Ottawa offers no solutions, just management of national decline
An obscure but disturbing federal report suggests Canadians could be foraging for food on public lands by 2040.
Policy Horizons Canada released the dire forecast on Jan. 7, 2025, in a report entitled Future Lives: Social Mobility in Question. It went largely unnoticed at the time, but its contents remain deeply concerning and worth closer examination.
Policy Horizons Canada is a little-known federal think-tank within the public service that produces long-term strategic foresight to guide government decision-making. Though not a household name, its projections can quietly shape policies at the highest levels. It describes itself as the government’s “centre of excellence in foresight,” designed to “empower the Government of Canada with a future-oriented mindset and outlook to strengthen decision making.” Its current head is Kristel Van der Elst, former head of strategic foresight at the World Economic Forum.
The report warns that the “powerful promise” that anyone can get an education, work hard, buy property and climb the social and economic ladder is slipping away. Instead of a temporary setback, the authors argue, downward mobility could become the norm. They liken Canada’s future to a board game with “more snakes than ladders.”
“In 2040, upward social mobility is almost unheard of in Canada,” the report states. “Hardly anyone believes that they can build a better life for themselves, or their children, through their own efforts. However, many worry about sliding down the social order.”
While these scenarios aren’t firm predictions, foresight reports like this are intended to outline plausible futures. The fact that federal bureaucrats see this as realistic is revealing—and troubling.
Post-secondary education, the report suggests, will lose its appeal. Rising costs, slow adaptation to labour market needs, long program durations and poor job prospects will push many away. It predicts that people will attend university more to join the “elite” than to find employment.
Home ownership will be out of reach for most, and inequality between those who own property and those who don’t will drive “social, economic, and political conflict.” Inheritance becomes the only reliable path to prosperity, while a new aristocracy begins to look down on the rest.
The gap between what youth are told to want and what they can realistically expect will widen, fuelling frustration and apathy. As automation and artificial intelligence expand, many traditional white-collar jobs will be replaced by machines or software. “Most people (will) rely on gig work and side hustles to meet their basic needs,” the report warns.
This leads to one of the darkest predictions: “People may start to hunt, fish, and forage on public lands and waterways without reference to regulations. Small scale agriculture could increase.”
The authors don’t propose solutions. Instead, they ask: “What actions could be taken now to maximize opportunities and lessen the challenges related to reduced and/or downward social mobility in the future?”
That question should concern us. Policymakers aren’t being asked how to prevent the collapse of social and economic mobility but how to manage its
fallout. Are those envisioning Canada’s future more interested in engineering a controlled implosion than fostering hope and opportunity?
Yes, artificial intelligence will bring challenges and change. But there is no excuse for despair in a country as rich in natural resources as Canada. Besides, the 2021 income data used in the report predates even the release of the first version of ChatGPT.
If policymakers are serious about restoring upward mobility, they must prioritize Canada’s resource economy. Ports, pipelines, oil and gas development, and mining are essential infrastructure for prosperity. When these sectors are strangled by overregulation, investment dries up—and so do jobs. The oil patch remains one of the fastest paths from poverty to wealth. Entry-level jobs in the field require training and safety courses, not four-year degrees.
Similarly, post-secondary education doesn’t need to be as expensive or time consuming as it is now. We should return to models where nurses could earn certification in two years instead of being funnelled into extended university programs. And if governments required universities to wind down defined benefit pension plans, tuition would fall fast.
Unfortunately, there’s a real risk that policymakers will use reports like this to justify more wealth-killing socialism. A home equity tax, for example, might be pitched to avoid future tensions between renters and homeowners. Such a tax would require Canadians to pay an annual levy based on the increased value of their home even if they haven’t sold it. These policies don’t build wealth—they punish it, offering temporary relief in place of lasting progress.
Unless we choose a more sensible path, the controlled demolition of Canada will continue.
Lee Harding is a research fellow for the Frontier Centre for Public Policy.
Troy Media empowers Canadian community news outlets by providing independent, insightful analysis and commentary. Our mission is to support local media in helping Canadians stay informed and engaged by delivering reliable content that strengthens community connections and deepens understanding across the country
Economy
Canada’s Energy Wealth Is Bleeding South

From the Frontier Centre for Public Policy
Without infrastructure, Canada is losing billions while the U.S. cashes in on our oil and gas
Canada’s energy wealth is stuck in traffic, and our American neighbours are cashing in. It’s worse than that. Canada is bleeding millions of dollars daily because it lacks the infrastructure to export its natural resources efficiently.
While our oil and gas continue to flow—mainly to the United States—provinces like Alberta and British Columbia are forced to sell at steep discounts. This isn’t just an economic inefficiency; it’s a structural failure of national policy. The beneficiaries? American businesses and their governments which pocket the profits and tax revenues that should be circulating through the Canadian economy. This is no way to achieve economic sovereignty for Canada.
With U.S. interests reaping the rewards, this should have been a central talking point when Prime Minister Carney met with President Trump earlier this month.
Ottawa often offers the recent completion of the Trans Mountain Expansion (TMX) pipeline as an example of federal support for the energy sector. But such claims are misleading. Kinder Morgan, a private enterprise, had initially planned to build the extension without a penny from taxpayers. It withdrew only after being crippled by federal regulatory delays and political uncertainty.
Ottawa stepped in not as a benevolent saviour to help Albertans, but to prevent lawsuits and save face—ultimately overpaying for the pipeline and watching construction costs balloon to nearly six times the original estimate.
To now declare this bungled project a “gift” to Alberta, as a recent op-ed in the Toronto Star did, is not only tone-deaf: it’s an insult. It ignores the fact that Alberta’s taxpayers helped finance the very project Ottawa botched. It also reveals an astonishing lack of understanding of the historical, economic and political dynamics at play between Ottawa and Western Canada.
The tragedy is that TMX, despite its importance, is insufficient. Our infrastructure bottlenecks remain. With each passing day, Canada forfeits wealth that could fund essential improvements in health care, education and national defence.
According to the Frontier Centre for Public Policy, which has developed a real-time tracker to monitor these losses, the price differential between what we could earn on global markets versus what we settle for domestically adds up to $26.5 billion annually.
Ottawa’s reluctance to greenlight new infrastructure is a primary cause of this problem. Ironically, the losses from this reluctance in a single year would be enough to pay for another TMX, mismanaged or not. The solution lies in a national commitment to building utility corridors: designated routes that facilitate the movement of energy, goods and services unhindered across provincial boundaries.
Carney’s recent promise to remove all interprovincial trade barriers by July 1 is a nice soundbite. But unless it includes meaningful infrastructure commitments, it is bound to fail like every other rhetorical flourish before it.
Canadians should be rightly skeptical. After all, what Ottawa has failed to achieve in the 157 years since Confederation is unlikely to be accomplished in the next 60 days.
The political math doesn’t help either. The Bloc Québécois holds the balance of power in the 45th Parliament, and its obstructionist stance on national pipeline development ensures the advent of more gridlock, not less. The federal government continues to uphold Bill C-69—dubbed the “no-pipelines bill”—further entrenching the status quo.
Meanwhile, Canada remains in the absurd position of relying on U.S. infrastructure to transport oil from the West to Ontario and Quebec. This undermines our economic independence, energy security and national sovereignty. No amount of “elbows up” will correct this enormous gap.
If the prime minister is serious about transforming Canada’s economic landscape and making the country strong, he must bypass the Bloc by cooperating with the Official Opposition. A grand bargain focused on utility corridors, interprovincial infrastructure and national trade efficiency would serve Alberta, Saskatchewan, and every Canadian who depends on a strong and self-reliant economy.
The stakes are high. We need a more productive country to face challenges within Canada and from abroad. Billions in lost revenue could fund new hospitals, more schools and better military readiness.
Instead, along with the limited exports of oil and gas, we’re exporting great opportunities to middlemen—and greater economic strength—south of the border.
The path forward is clear. A strong, self-reliant Canada needs infrastructure. It needs corridors. It needs leadership.
Marco Navarro-Genie is the vice president of research at the Frontier Centre for Public Policy. He is coauthor, with Barry Cooper, of Canada’s COVID: The Story of a Pandemic Moral Panic (2023).
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