Business
Federal government’s redistribution economics doesn’t work

From the Fraser Institute
By Jason Clemens, Jake Fuss, and Milagros Palacios
Prime Minister Trudeau’s vision for a more prosperous Canada relies on a much larger role for the federal government, with more spending, regulation, borrowing and higher taxes. By moving existing money around—both from higher-income workers to average Canadians and from the future to the present through borrowing—he believes the Canadian economy will be stronger and living standards will rise. But after nine years of governing, the evidence is clear—the prime minister’s redistribution economics doesn’t work and has actually reduced living standards in Canada.
Let’s first understand the magnitude of the changes made by the Trudeau government. Federal spending (excluding interest costs on debt) has risen from $256.2 billion in the last year of the Harper government to an estimated $483.6 billion this year, an increase of 88.7 per cent.
Even excluding COVID-related spending, the Trudeau government has recorded the five highest years of federal spending (on a per-person basis, after adjusting for inflation) in the history of the country, far surpassing spending during both world wars and the Great Recession.
Under Trudeau, the federal government has introduced several new programs (including dental care, daycare and pharmacare), and expanded several existing programs such as the cash transfer to families with children under 18 and corporate welfare.
Redistributing existing income has been a clear policy goal of the Trudeau government. From 2015 to 2022, average government transfers to families with children have increased from $12,685 to $15,750 (inflation-adjusted), an increase of 24.2 per cent. Yet among these same families, employment income only increased 8.0 per cent during the same period, meaning government transfers grew more than three times faster than their employment income. And as a share of household income, government transfers have increased from an average of 8.0 per cent between 1995 and 2007, when employment income was growing much faster, to 10.3 per cent in 2022.
The Trudeau government has financed this explosion in federal spending by borrowing, which is simply taxation deferred to the future, and tax increases.
Specifically, the government increased personal income taxes on professionals, entrepreneurs and successful business owners. It also increased taxes on businesses, which is an indirect and less transparent way of increasing taxes on average people since businesses don’t actually pay taxes, only people pay taxes. Higher business taxes mean less investment and thus lower wage growth for workers, lower payments to the business owners, and/or higher prices for consumers buying goods and services.
The Trudeau government also opaquely increased taxes on average Canadians. While it lowered the second personal income tax rate, it simultaneously eliminated several tax credits. As a result, 86 per cent of middle-income families experienced an increase in their personal income taxes as did 75 per cent of families with children in the bottom 20 per cent of income-earners.
But again, the government financed much of its new spending by borrowing, which means future tax increases. Consider that total federal debt stood at a little over $1.0 trillion when the Trudeau government took office in late-2015. By the government’s own estimates, total federal debt will reach almost $2.1 trillion next year.
Higher debt means higher interest costs, which divert money away from programs such as health care or badly needed tax relief. From 2015-16 (when Trudeau was first elected) to this year, federal debt interest costs have increased from $21.8 billion to an expected $54.1 billion. For context, this year the federal government expects to raise $54.1 billion from the GST, which means that every cent raised from the national sales tax will go to pay interest costs on the federal debt.
By focusing on moving around existing income (i.e. redistribution) rather than promoting income growth through investment and entrepreneurship, the Trudeau government has helped produce an outright economic growth crisis. Canada’s current decline in per-person GDP, a broad measure of living standards, is one of the longest and deepest declines of the last 40 years. Moreover, as of the end of 2023, the latest year of available data, the decline in living standards had not stopped so there’s a chance this could be the worst fall in living standards since at least the early-1980s.
According to a 2023 study, growth in per-person GDP from 2013 to 2022 was at its lowest rate since the Great Depression. Indeed, Canada’s post-COVID recovery was the 5th-weakest in the industrialized world. And prospects for the future are no better. A recent study by the OECD estimated that Canada would have the slowest growth in living standards among 32 high-income countries for the foreseeable future.
Simply put, the Trudeau government’s policies, which focused on government-led prosperity and moving income around instead of growing incomes, have led to a decline in living standards and economic malaise. Canadians are struggling when we should be leading the world in growth and prosperity. The only way to reverse our economic decline is to embrace a markedly different approach to policy focused on economic growth through entrepreneurship, investment and innovation.
Authors:
Business
Canada urgently needs a watchdog for government waste

This article supplied by Troy Media.
By Ian Madsen
From overstaffed departments to subsidy giveaways, Canadians are paying a high price for government excess
Canada’s federal spending is growing, deficits are mounting, and waste is going unchecked. As governments look for ways to control costs, some experts say Canada needs a dedicated agency to root out inefficiency—before it’s too late
Not all the Trump administration’s policies are dubious. One is very good, in theory at least: the Department of Government Efficiency. While that
term could be an oxymoron, like ‘political wisdom,’ if DOGE proves useful, a Canadian version might be, too.
DOGE aims to identify wasteful, duplicative, unnecessary or destructive government programs and replace outdated data systems. It also seeks to
lower overall costs and ensure mechanisms are in place to evaluate proposed programs for effectiveness and value for money. This can, and often does, involve eliminating departments and, eventually, thousands of jobs. Some new roles within DOGE may need to become permanent.
The goal in the U.S. is to reduce annual operating costs and ensure government spending grows more slowly than revenues. Washington’s spending has exploded in recent years. The U.S. federal deficit now exceeds six per cent of gross domestic product. According to the U.S. Treasury Department, the cost of servicing that debt is rising at an unsustainable rate.
Canada’s latest budget deficit of $61.9 billion in fiscal 2023-24 amounts to about two per cent of GDP—less alarming than our neighbour’s situation, but still significant. It adds to the federal debt of $1.236 trillion, about 41 per cent of our estimated $3 trillion GDP. Ottawa’s public accounts show expenses at 17.8 per cent of GDP, up from about 14 per cent just eight years ago. Interest on the growing debt accounted for 9.1 per cent of
revenues in the most recent fiscal year, up from five per cent just two years ago.
The Canadian Taxpayers Federation (CTF) consistently highlights dubious spending, outright waste and extravagant programs: “$30 billion in subsidies to multinational corporations like Honda, Volkswagen, Stellantis and Northvolt. Federal corporate subsidies totalled $11.2 billion in 2022 alone. Shutting down the federal government’s seven regional development agencies would save taxpayers an estimated $1.5 billion annually.”
The CTF also noted that Ottawa hired 108,000 additional staff over the past eight years, at an average annual cost of more than $125,000 each. Hiring based on population growth alone would have added just 35,500 staff, saving about $9 billion annually. The scale of waste is staggering. Canada Post, the CBC and Via Rail collectively lose more than $5 billion a year. For reference, $1 billion could buy Toyota RAV4s for over 25,600 families.
Ottawa also duplicates functions handled by provincial governments, often stepping into areas of constitutional provincial jurisdiction. Shifting federal programs in health, education, environment and welfare to the provinces could save many more billions annually. Poor infrastructure decisions have also cost Canadians dearly—most notably the $33.4 billion blown on what should have been a relatively simple expansion of the Trans Mountain pipeline. Better project management and staffing could have prevented that disaster. Federal IT systems are another money pit, as shown by the $4-billion Phoenix payroll debacle. Then there’s the Green Slush Fund, which misallocated nearly $900 million.
Even more worrying, the rapidly expanding Old Age Supplement and Guaranteed Income Security programs are unfunded, unlike the Canada Pension Plan. Their combined cost is already roughly equal to the federal deficit and could soon become unmanageable.
Canada is sleepwalking toward financial ruin. A Canadian version of DOGE—Canada Accountability, Efficiency and Transparency Team, or CAETT—is urgently needed. The Office of the Auditor General does an admirable job identifying waste and poor performance, but it’s not proactive and lacks enforcement powers. At present, there is no mechanism in place to evaluate or eliminate ineffective programs. CAETT could fill that gap and help secure a prosperous future for Canadians.
Ian Madsen is a senior policy analyst at the Frontier Centre for Public Policy.
The views, opinions, and positions expressed by our columnists and contributors are solely their own and do not necessarily reflect those of our publication.
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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.
Business
Trump says he expects ‘great relationship’ with Carney, who ‘hated’ him less than Poilievre

From LifeSiteNews
‘He called me up yesterday and said, ‘Let’s make a deal,’’ Trump said on Wednesday about Carney. ‘I actually think the conservative hated me much more than the so-called liberal.’
U.S. President Donald Trump implied that he was satisfied with Mark Carney winning the 2025 Canadian federal election, calling him a “nice gentleman” who “hated” him less than Conservative leader Pierre Poilievre.
“I think we are going to have a great relationship. He called me up yesterday and said, ‘Let’s make a deal,’” said Trump on Wednesday when asked about Carney and Monday’s election results.
Trump then said that Carney and Poilievre “both hated Trump,” but added, “It was the one that hated Trump I think the least that won.”
“I actually think the conservative hated me much more than the so-called liberal, he’s a pretty liberal guy,” he said.
Trump said that he spoke with Carney already, and that “he couldn’t have been nicer. And I congratulated him.”
“You know it’s a very mixed signal because it’s almost even, which makes it very complicated for the country. It’s a pretty tight race,” said Trump.
Trump then called Carney a “very nice gentleman and he’s going to come to the White House very shortly.”
Monday’s election saw Liberal leader Carney beat out Conservative rival Poilievre, who also lost his seat. The Conservatives managed to pick up over 20 new seats, however, and Poilievre has vowed to stay on as party leader, for now.
Back in March, Trump said at the time he had “an extremely productive call” with Carney and implied that the World Economic Forum-linked politician would win Canada’s upcoming federal election.
He also said before the election that he would prefer Carney to continue as Canada’s prime minister instead of Poilievre, who he said was “no friend” of his.
Trump, mostly while Justin Trudeau was prime minister, had repeatedly said that Canada should join the United States as its 51st state. This fueled a wave of anti-American sentiment in Canada, which saw the mainstream press say Poilievre was a “Trump lite” instead of Carney.
Poilievre at the time hit back at Trump, saying that the reason Trump endorsed Carney was that he “knows” he would be a “tough negotiator.”
Trump’s comments regarding Carney were indeed significant, as much of the debate in the mainstream media ahead of the election was about how the prospective leaders will handle tariff threats and trade deals with America.
Many political pundits have said that Carney owes his win to Trump.
Carney’s win has sparked a constitutional crisis. Alberta Premier Danielle Smith, as reported by LifeSiteNews, said that her province could soon consider taking serious steps toward greater autonomy from Canada in light of Carney’s win.
Under Carney, the Liberals are expected to continue much of what they did under Trudeau, including the party’s zealous push in favor of abortion, euthanasia, radical gender ideology, internet regulation and so-called “climate change” policies. Indeed, Carney, like Trudeau, seems to have extensive ties to both China and the globalist World Economic Forum, connections which were brought up routinely by conservatives in the lead-up to the election.
Poilievre’s defeat comes as many social conservatives felt betrayed by the leader, who more than once on the campaign trail promised to maintain the status quo on abortion – which is permitted through all nine months of pregnancy – and euthanasia and who failed to directly address a number of moral issues like the LGBT agenda.
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