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Poor policies responsible for stagnant economy and deteriorating federal finances


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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.

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Trudeau pledges another $500 million to Ukraine as Canadian military suffers

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From LifeSiteNews

By Clare Marie Merkowsky

Despite the nation’s own armed forces grappling with an alarming recruitment crisis, Justin Trudeau and his government have poured over $13.3 billion into Ukraine.

More Canadians tax dollars are being sent overseas as Prime Minister Justin Trudeau has promised an additional $500 million in military aid to Ukraine. 

During a July 10 meeting with Ukrainian President Volodymyr Zelensky, Trudeau announced that he would send another $500 million to Ukraine as it continues its war against Russia, despite an ongoing decline in Canada’s military recruitment.  

“We’re happy to offer we’re announcing today $500 million more military aid this year for Ukraine, to help through this very difficult situation,” Trudeau said. 

In addition to the $500 million, Canada will also provide much of Ukraine’s fighter jet pilot training as Ukraine receives its first F-16s. 

Trudeau’s statement comes after Canada has been under fire for failing to meet NATO’s mandate that all members commit at least two percent of their gross domestic product (GDP) to the military alliance. 

According to his 2024 budget, Trudeau plans to spend $8.1 billion over five years, starting in 2024-25, and $73.0 billion over 20 years on the Department of National Defence.   

Interestingly, $8.1 billion divided equally over five years is $1,620,000 each year for the Canadian military. Therefore, Trudeau’s pledge of $500 million means he is spending just under a third on Ukraine compared to what he plans to spend on Canadians.  

Indeed, Trudeau seems reluctant to spend money on the Canadian military, as evidenced when Canadian troops in Latvia were forced to purchase their own helmets and food when the Trudeau government failed to provide proper supplies.  

Weeks later, Trudeau lectured the same troops on “climate change” and disinformation.       

However, at the same time, Trudeau readily sends Canadian tax dollars overseas to Ukraine. Since the Russia-Ukraine war began in 2022, Canada has given Ukraine over $13.3 billion, including $4 billion in direct military assistance.    

In May, Trudeau’s office announced $3.02 billion in funding for Ukraine, including millions of taxpayer dollars to promote “gender-inclusive demining.”  

Trudeau’s ongoing funding for Ukraine comes as many Canadians are struggling to pay for basics such as food, shelter, and heating. According to a recent government report, fast-rising food costs in Canada have led to many people feeling a sense of “hopelessness and desperation” with nowhere to turn for help.  

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Prime minister and premier combine to reduce living standards in B.C.

Published on

From the Fraser Institute

By Jake Fuss

In B.C., the Eby government is following the prime minister’s lead. After nearly two decades of spending restraint  (1999/00 to 2016/17), the province has experienced an explosion in government spending. Program spending will increase from $46.1 billion in 2016-17 to a projected $85.3 billion this year, a nominal increase of more than 85 per cent.

Recently, Prime Minister Justin Trudeau and Premier David Eby had a tête-à-tête and vowed to always “work together on important issues.” While they belong to two different political parties, their visions rely on a larger role for government, which includes more spending, regulation, borrowing and higher taxes. Unsurprisingly, this economic strategy hasn’t worked and has instead led to stagnant living standards in British Columbia and across Canada.

Under the NDP, British Columbians have seen their incomes completely stagnate. B.C.’s per-person GDP, a broad measure of living standards, is expected to be lower this year than in 2018, and decline by an average annual rate of 0.9 per cent from 2022 to 2024—the third biggest drop among the provinces during this period.

This represents a marked departure from the economic results under the previous government. From 2001 to 2017, per-person GDP grew (on average) by 1.4 per cent. And the average British Columbian’s income increased by 27 per cent over these 16 years.

The decline in living standards is also occurring nationally. Canada’s per-person GDP was lower at the end of 2023  than it was in 2014.


Since first elected in 2015, Prime Minister Trudeau has greatly expanded the federal government’s role in the Canadian economy. Federal program spending (total spending excluding debt interest costs) will increase from $256.2 billion in the final full year of the Harper government to a projected $483.6 billion in 2024-25, an increase of nearly 90 per cent over a decade. The government has financed this spending surge through tax increases and borrowing.

Specifically, the Trudeau government in 2016 raised the top personal income tax rate (which applies to many entrepreneurs and businessowners) and also opaquely increased taxes on middle-income Canadians by eliminating several tax credits (as a result, 86 per cent of middle-income families now pay higher taxes). Federal debt has spiked considerably to finance the government’s insatiable appetite for spending, reaching nearly $2.1 trillion this year, almost double the level in 2014-15.

In B.C., the Eby government is following the prime minister’s lead. After nearly two decades of spending restraint  (1999/00 to 2016/17), the province has experienced an explosion in government spending. Program spending will increase from $46.1 billion in 2016-17 to a projected $85.3 billion this year, a nominal increase of more than 85 per cent.

With Premier Eby’s plan to ramp up spending further in the next few years and incur substantial deficits, B.C.’s net government debt is projected to reach a whopping $128.8 billion by 2026/27—a 227 per cent increase since 2016-17.

The B.C. NDP has also raised one tax after another to feed its appetite for spending. The government hiked personal income tax rates from 14.7 per cent to 16.8 per cent on income between roughly $181,000 and $253,000, and introduced a new top tax rate of 20.5 per cent for top-income earners. And raised the business tax rate from 11.0 to 12.0 per cent in 2018, deterring badly needed investment in the province.

Prime Minister Trudeau and Premier Eby are pursuing the same policies and achieving the same miserable economic results. Simply put, the Trudeau-Eby zero economic growth alliance has reduced the living standards of British Columbians and Canadians.

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