Business
Growing the government won’t help Canada’s economy
From the Fraser Institute
By Jake Fuss and Grady Munro and Alex Whalen
Empirical research suggests that economic growth is maximized when the size of government falls between 24 and 32 per cent of GDP. In other words, when governments spend in excess of this range, the economy will not grow as much as it would if government operated within that threshold
Canada is suffering from an economic growth crisis, and governments across the country should reassess their policies. Governments (particularly the federal government) have recently taken a more active role in the economy through increased spending and bureaucracy. However, policymakers must take a step back and recognize that growing government doesn’t lead to growth in the economy.
Canada’s economy has been stagnant for the last decade. From 2013 to 2022, per-person GDP (a broad measure of living standards) grew at its slowest pace since the 1930s, after accounting for inflation. And more recent data shows that in the fourth quarter of 2023, per-person GDP (inflation-adjusted) stood at $58,111—which is $51 per person lower than it was at the end of 2014. Simply put, Canadians have experienced a decade of dismal growth, and are now actually worse off than they were a decade ago.
During this time, many governments in Canada have adopted an approach of greater involvement in the economy and significantly higher spending. Take the federal government, for example.
Since 2014/15, the government has increased annual program spending (total spending minus debt interest) by roughly 75 per cent, from $256.3 billion to $448.2 billion in 2022/23. Moreover, the Trudeau government has recorded the five-highest years of federal spending in Canadian history, after accounting for population growth and inflation. Much of this spending has gone towards expanding Ottawa’s role in the economy through increased transfers, business subsidies or new programs such as $10-a-day daycare and national dental care.
Provincial governments in Quebec, Nova Scotia and British Columbia (to name a few) have also recently reached historical highs in per-person program spending (even after excluding COVID-related spending). Simply put, governments across the country have been increasing spending and becoming more involved in the economy.
One way to measure the size of government, that allows for the comparison of jurisdictions over time, is known as total consolidated government spending as a share of GDP. This measure includes all spending at the local, provincial and federal levels in a jurisdiction and compares that level to the size of the economy.
According to a recent study, in 2022 (the latest year of available data) the size of government in Canada was 40.5 per cent of GDP compared to 38.2 per cent in 2014.
Among the provinces, total government spending ranged from 26.8 per cent of GDP in Alberta to 63.0 per cent of GDP in Nova Scotia. Compared to 2014, the size of government grew in eight of 10 provinces—only Prince Edward Island and B.C. experienced declines in government spending as a share of the economy. It’s also important to note that this is simply government spending. The true size of government, when accounting for things like regulation, is even larger.
Growing government matters because it influences economic growth. When the size of government is below a certain level, it lacks the resources to deliver services such as policing, courts or national defence—which are essential to a functioning economy. On the other hand, when government is too big it engages in activities best left to the free market and effectively crowds-out private-sector activity that contributes to economic growth. Therefore, when a government is too small or too big, economic growth (and consequently living standards) suffer.
Empirical research suggests that economic growth is maximized when the size of government falls between 24 and 32 per cent of GDP. In other words, when governments spend in excess of this range, the economy will not grow as much as it would if government operated within that threshold—all else equal. Based on the numbers presented above, it’s clear the vast majority of governments in Canada are too big. For nine of 10 provinces and the federal government, their spending exceeded 32 per cent of GDP in 2022.
As Canadians look for solutions to address a stagnating economy and falling living standards, governments should recognize that taking a more active role in the economy won’t solve the problem—and will likely make it worse.
Authors:
Quick Hit:
President Trump on Thursday confirmed a sweeping new 35% tariff on Canadian imports starting August 1, citing Canada’s failure to curb fentanyl trafficking and retaliatory trade actions.
Key Details:
- In a letter to Canadian Prime Minister Mark Carney, Trump said the new 35% levy is in response to Canada’s “financial retaliation” and its inability to stop fentanyl from reaching the U.S.
- Trump emphasized that Canadian businesses that relocate manufacturing to the U.S. will be exempt and promised expedited approvals for such moves.
- The administration has already notified 23 countries of impending tariffs following the expiration of a 90-day negotiation window under Trump’s “Liberation Day” trade policy.
Diving Deeper:
President Trump escalated his tariff strategy on Thursday, formally announcing a 35% duty on all Canadian imports effective August 1. The move follows what Trump described as a breakdown in trade cooperation and a failure by Canada to address its role in the U.S. fentanyl crisis.
“It is a Great Honor for me to send you this letter in that it demonstrates the strength and commitment of our Trading Relationship,” Trump wrote to Prime Minister Mark Carney. He added that the tariff response comes after Canada “financially retaliated” against the U.S. rather than working to resolve the flow of fentanyl across the northern border.
Trump’s letter made clear the tariff will apply broadly, separate from any existing sector-specific levies, and included a warning that “goods transshipped to evade this higher Tariff will be subject to that higher Tariff.” The president also hinted that further retaliation from Canada could push rates even higher.
However, Trump left the door open for possible revisions. “If Canada works with me to stop the flow of Fentanyl, we will, perhaps, consider an adjustment to this letter,” he said, adding that tariffs “may be modified, upward or downward, depending on our relationship.”
Canadian companies that move operations to the U.S. would be exempt, Trump said, noting his administration “will do everything possible to get approvals quickly, professionally, and routinely — In other words, in a matter of weeks.”
The U.S. traded over $762 billion in goods with Canada in 2024, with a trade deficit of $63.3 billion, a figure Trump called a “major threat” to both the economy and national security.
Speaking with NBC News on Thursday, Trump suggested even broader tariff hikes are coming, floating the idea of a 15% or 20% blanket rate on all imports. “We’re just going to say all of the remaining countries are going to pay,” he told Meet the Press moderator Kristen Welker, adding that “the tariffs have been very well-received” and noting that the stock market had hit new highs that day.
The Canadian announcement is part of a broader global tariff rollout. In recent days, Trump has notified at least 23 countries of new levies and revealed a separate 50% tariff on copper imports.
“Not everybody has to get a letter,” Trump said when asked if other leaders would be formally notified. “You know that. We’re just setting our tariffs.”
From LifeSiteNews
By Dan Frieth
In his letter dated July 9, 2025, addressed to President Luiz Inácio Lula da Silva, Trump ties new U.S. trade measures directly to Brazilian censorship.
U.S. President Donald Trump has launched a fierce rebuke of Brazil’s moves to silence American-run social media platforms, particularly Rumble and X.
In his letter dated July 9, 2025, addressed to President Luiz Inácio Lula da Silva, Trump ties new U.S. trade measures directly to Brazilian censorship.
He calls attention to “SECRET and UNLAWFUL Censorship Orders to U.S. Social Media platforms,” pointing out that Brazil’s Supreme Court has been “threatening them with Millions of Dollars in Fines and Eviction from the Brazilian Social Media market.”
Trump warns that these actions are “due in part to Brazil’s insidious attacks on Free Elections, and the fundamental Free Speech Rights of Americans,” and states: “starting on August 1, 2025, we will charge Brazil a Tariff of 50% on any and all Brazilian products sent into the United States, separate from all Sectoral Tariffs.” He also adds that “Goods transshipped to evade this 50% Tariff will be subject to that higher Tariff.”
Brazil’s crackdown has targeted Rumble after it refused to comply with orders to block the account of Allan dos Santos, a Brazilian streamer living in the United States.
On February 21, 2025, Justice Alexandre de Moraes ordered Rumble’s suspension for non‑compliance, saying it failed “to comply with court orders.”
Earlier, from August to October 2024, Moraes had similarly ordered a nationwide block on X.
The court directed ISPs to suspend access and imposed fines after the platform refused to designate a legal representative and remove certain accounts.
Elon Musk responded: “Free speech is the bedrock of democracy and an unelected pseudo‑judge in Brazil is destroying it for political purposes.”
By linking censorship actions, particularly those targeting Rumble and X, to U.S. trade policy, Trump’s letter asserts that Brazil’s judiciary has moved into the arena of foreign policy and economic consequences.
The tariffs, he makes clear, are meant, at least in part, as a response to Brazil’s suppression of American free speech.
Trump’s decision to impose tariffs on Brazil for censoring American platforms may also serve as a clear signal to the European Union, which is advancing similar regulatory efforts under the guise of “disinformation” and “online safety.”
With the EU’s Digital Services Act and proposed “hate speech” legislation expanding government authority over content moderation, American companies face mounting pressure to comply with vague and sweeping takedown demands.
By framing censorship as a violation of U.S. free speech rights and linking it to trade consequences, Trump is effectively warning that any foreign attempt to suppress American voices or platforms could trigger similar economic retaliation.
Reprinted with permission from Reclaim The Net.
Dallas mayor invites NYers to first ‘sanctuary city from socialism’
US airstrike on Iran’s nuclear facilities. Was it obliteration?
Lacombe meat processor scores $1.2 million dollar provincial tax credit to help expansion
The Left Thinks Drug Criminalization Is Racist. Minorities Disagree
Canada’s Carbon Tax Is A Disaster For Our Economy And Oil Industry
Trump’s One Big Beautiful Bill Resets The Energy Policy Playing Field
Alberta Sports Hall of Fame 2025 Inductee profiles – Alpine Skiing Athlete – Brady Leman
-
Business2 days agoWEF-linked Linda Yaccarino to step down as CEO of X
-
Automotive2 days agoAmerica’s EV Industry Must Now Compete On A Level Playing Field
-
Business2 days ago‘Experts’ Warned Free Markets Would Ruin Argentina — Looks Like They Were Dead Wrong
-
Alberta1 day agoAlberta school boards required to meet new standards for school library materials with regard to sexual content
-
International2 days agoSecret Service suspends six agents nearly a year after Trump assassination attempt
-
Business1 day agoCarney government should recognize that private sector drives Canada’s economy
-
Bruce Dowbiggin1 day agoThe Covid 19 Disaster: When Do We Get The Apologies?
-
Alberta1 day agoFourteen regional advisory councils will shape health care planning and delivery in Alberta