Economy
Poor policies responsible for stagnant economy and deteriorating federal finances

From the Fraser Institute
By Jake Fuss and Jason Clemens
The Trudeau government was elected in 2015 based in part on a new approach to government policy, promising greater prosperity for Canadians through short-term deficit spending, lower taxes for most Canadians, and a more direct and active role for government in economic development. However, the result has been economic stagnation and a marked deterioration in the country’s finances. If Canada is to restore its economic and fiscal health, Ottawa must enact fundamental policy reform.
The Trudeau government has significantly increased spending from $256.2 billion in 2014-15 to a projected $449.8 billion in 2023-24 (excluding debt interest costs) to expand existing programs and create new programs.
In 2016, the government increased the top personal income tax rate on entrepreneurs, professionals and businessowners from 29 per cent to 33 per cent. Consequently, the combined top personal income tax rate (federal and provincial) now exceeds 50 per cent in eight provinces and the country’s average top combined rate in 2022 ranked fifth-highest among 38 OECD countries. This represents a serious competitive challenge for Canada to attract and retain entrepreneurs, investors and skilled professionals (e.g. doctors) we badly need.
And while the Trudeau government reduced the middle personal income tax rate, it also eliminated several tax credits. Due to the combination of these two policy changes, 86 per cent of middle-income families now pay higher personal income taxes.
The Trudeau government also borrowed to help finance new spending, triggering a string of budget deficits. As a result, federal gross debt has ballooned to $1.9 trillion (2022-23) and will reach a projected $2.4 trillion by 2027-28, fueling a marked growth in interest costs, which now consume substantial levels of revenue unavailable for government services or tax reduction.
Simply put, the Trudeau government has produced large increases in government spending, taxes and borrowing, which have not translated into a more robust and vibrant economy.
For example, from 2013 to 2022, growth in per-person GDP, the broadest measure of living standards, was the weakest on record since the 1930s. Prospects for the future, given current policies, are not encouraging. According to the OECD, Canada will record the lowest rate of per-person GDP growth among 32 advanced economies during the periods 2020 to 2030 and 2030 to 2060. Countries such as Estonia, South Korea and New Zealand are expected to vault past Canada and achieve higher living standards by 2060.
Canada’s economic growth crisis is due in part to the decline in business investment, which is critical to increasing living standards because it equips workers with tools and technologies to produce more and provide higher-quality goods and services. The Trudeau government has dampened investment by increasing regulatory barriers, particularly in the energy and mining sectors, and running deficits, which imply tax increases in the future.
Business investment (inflation-adjusted, excluding residential construction) has declined by 1.8 per cent annually, on average, since 2014. Between 2014 and 2021, business investment per worker (inflation-adjusted, excluding residential construction) decreased by $3,676 in Canada compared to growth of $3,418 in the United States.
There’s reason for optimism, however, since many of Canada’s challenges are of Ottawa’s own making. The Chrétien Liberals in the 1990s faced many of the same challenges we do today. By shifting the focus to more prudent government spending, balanced budgets, debt reduction and competitive tax rates, the Chrétien Liberals—followed in large measure by the Harper Tories—paved the way for two decades of prosperity. To help foster greater prosperity for Canadians today and tomorrow, the federal government should learn from the Chrétien Liberals and Harper Tories and enact fundamental policy reform.
Authors:
Carbon Tax
Canada’s Carbon Tax Is A Disaster For Our Economy And Oil Industry

From the Frontier Centre for Public Policy
By Lee Harding
Lee Harding exposes the truth behind Canada’s sky-high carbon tax—one that’s hurting our oil industry and driving businesses away. With foreign oil paying next to nothing, Harding argues this policy is putting Canada at a major economic disadvantage. It’s time to rethink this costly approach.
Our sky-high carbon tax places Canadian businesses at a huge disadvantage and is pushing investment overseas
No carbon tax will ever satisfy global-warming advocates, but by most measures, Canada’s carbon tax is already too high.
This unfortunate reality was brought to light by Resource Works, a B.C.-based non-profit research and advocacy organization. In March, one of their papers outlined the disproportionate and damaging effects of Canada’s carbon taxes.
The study found that the average carbon tax among the top 20 oil-exporting nations, excluding Canada, was $0.70 per tonne of carbon emissions in fiscal 2023. With Canada included, that average jumps to $6.77 per tonne.
At least Canada demands the same standards for foreign producers as it does for domestic ones, right? Wrong.
Most of Canada’s oil imports come from the U.S., Saudi Arabia, and Nigeria, none of which impose a carbon tax. Only 2.8 per cent of Canada’s oil imports come from the modestly carbon-taxing countries of the U.K. and Colombia.
Canada’s federal consumer carbon tax was $80 per tonne, set to reach $170 by 2030, until Prime Minister Mark Carney reduced it to zero on March 14. However, parallel carbon taxes on industry remain in place and continue to rise.
Resource Works estimates Canada’s effective carbon tax at $58.94 per tonne for fiscal 2023, while foreign oil entering Canada had an effective tax of just $0.30 per tonne.
“This results in a 196-fold disparity, effectively functioning as a domestic tariff against Canadian oil production,” the research memo notes. Forget Donald Trump—Ottawa undermines our country more effectively than anyone else.
Canada is responsible for 1.5 per cent of global CO2 emissions, but the study estimates that Canada paid one-third of all carbon taxes in 2023. Mexico, with nearly the same emissions, paid just $3 billion in carbon taxes for 2023-24, far less than Canada’s $44 billion.
Resource Works also calculated that Canada alone raised the global per-tonne carbon tax average from $1.63 to $2.44. To be Canadian is to be heavily taxed.
Historically, the Canadian dollar and oil and gas investment in Canada tracked the global price of oil, but not anymore. A disconnect began in 2016 when the Trudeau government cancelled the Northern Gateway pipeline and banned tanker traffic on B.C.’s north coast.
The carbon tax was introduced in 2019 at $15 per tonne, a rate that increased annually until this year. The study argues this “economic burden,” not shared by the rest of the world, has placed Canada at “a competitive disadvantage by accelerating capital flight and reinforcing economic headwinds.”
This “erosion of energy-sector investment” has broader economic consequences, including trade balance pressures and increased exchange rate volatility.
According to NASA, Canadian forest fires released 640 million metric tonnes of carbon in 2023, four times the amount from fossil fuel emissions. We should focus on fighting fires, not penalizing our fossil fuel industry.
Carney praised Canada’s carbon tax approach in his 2021 book Value(s), raising questions about how long his reprieve will last. He has suggested raising carbon taxes on industry, which would worsen Canada’s competitive disadvantage.
In contrast, Conservative leader Pierre Poilievre argued that extracting and exporting Canadian oil and gas could displace higher-carbon-emitting energy sources elsewhere, helping to reduce global emissions.
This approach makes more sense than imposing disproportionately high tax burdens on Canadians. Taxes won’t save the world.
Lee Harding is a research fellow for the Frontier Centre for Public Policy.
Business
Canada’s loyalty to globalism is bleeding our economy dry

This article supplied by Troy Media.
Trump’s controversial trade policies are delivering results. Canada keeps playing by global rules and losing
U.S. President Donald Trump’s brash trade agenda, though widely condemned, is delivering short-term economic results for the U.S. It’s also revealing the high cost of Canada’s blind loyalty to globalism.
While our leaders scold Trump and posture on the world stage, our economy is faltering, especially in sectors like food and farming, which have been sacrificed to international agendas that don’t serve Canadian interests.
The uncomfortable truth is that Trump’s unapologetic nationalism is working. Canada needs to take note.
Despite near-universal criticism, the U.S. economy is outperforming expectations. The Federal Reserve Bank of Atlanta projects 3.8 per cent second-quarter GDP growth.
Inflation remains tame, job creation is ahead of forecasts, and the trade deficit is shrinking fast, cut nearly in half. These results suggest that, at least in the short term, Trump’s economic nationalism is doing more than just stirring headlines.
Canada, by contrast, is slipping behind. The economy is contracting, manufacturing is under pressure from shifting U.S. trade priorities, and food
inflation is running higher than general inflation. One of our most essential sectors—agriculture and food production—is being squeezed by rising costs, policy burdens and vanishing market access. The contrast with the U.S. is striking and damning.
Worse, Canada had been pushed to the periphery. The Trump administration had paused trade negotiations with Ottawa over Canada’s proposed digital services tax. Talks have since resumed after Ottawa backed away from implementing it, but the episode underscored how little strategic value
Washington currently places on its relationship with Canada, especially under a Carney-led government more focused on courting Europe than securing stable access to our largest export market. But Europe, with its own protectionist agricultural policies and slower growth, is no substitute for the scale and proximity of the U.S. market. This drift has real consequences, particularly for
Canadian farmers and food producers.
The problem isn’t a trade war; it’s a global realignment. And while Canada clings to old assumptions, Trump is redrawing the map. He’s pulling back from institutions like the World Health Organization, threatening to sever ties with NATO, and defunding UN agencies like the Food and Agriculture Organization (FAO), the global body responsible for coordinating efforts to improve food security and support agricultural development worldwide. The message is blunt: global institutions will no longer enjoy U.S. support without measurable benefit.
To some, this sounds reckless. But it’s forcing accountability. A senior FAO official recently admitted that donors are now asking hard questions: why fund these agencies at all? What do they deliver at home? That scrutiny is spreading. Countries are quietly realigning their own policies in response, reconsidering the cost-benefit of multilateralism. It’s a shift long in the making and long resisted in Canada.
Nowhere is this resistance more damaging than in agriculture. Canada’s food producers have become casualties of global climate symbolism. The carbon tax, pushed in the name of international leadership, penalizes food producers for feeding people. Policies that should support the food and farming sector instead frame it as a problem. This is globalism at work: a one-size-fits-all policy that punishes the local for the sake of the international.
Trump’s rhetoric may be provocative, but his core point stands: national interest matters. Countries have different economic structures, priorities and vulnerabilities.
Pretending that a uniform global policy can serve them all equally is not just naïve, it’s harmful. America First may grate on Canadian ears, but it reflects a reality: effective policy begins at home.
Canada doesn’t need to mimic Trump. But we do need to wake up. The globalist consensus we’ve followed for decades is eroding. Multilateralism is no longer a guarantee of prosperity, especially for sectors like food and farming. We must stop anchoring ourselves to frameworks we can’t influence and start defining what works for Canadians: secure trade access, competitive food production, and policy that recognizes agriculture not as a liability but as a national asset.
If this moment of disruption spurs us to rethink how we balance international cooperation with domestic priorities, we’ll emerge stronger. But if we continue down our current path, governed by symbolism, not strategy, we’ll have no one to blame for our decline but ourselves.
Dr. Sylvain Charlebois is a Canadian professor and researcher in food distribution and policy. He is senior director of the Agri-Food Analytics Lab at Dalhousie University and co-host of The Food Professor Podcast. He is frequently cited in the media for his insights on food prices, agricultural trends, and the global food supply chain
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
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