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Spending restraint: Roadmap to a balanced budget

Published

2 years ago

7 minute read

From the Fraser Institute

A Case for Spending Restraint: How the Federal Government Can Balance the Budget

By Grady Munro and Jake Fuss

Since 2015, there has been a deterioration in the federal government’s fiscal situation. Annual
nominal program spending has increased an estimated $193.6 billion since 2014/15; adjusted for
inflation and population growth this represents an extra $2,330 per person. Prior to the COVID
pandemic, spending increased faster than population, inflation, and other relevant economic
indicators. These spending increases have resulted in a string of large budgetary deficits that have
contributed to an estimated $941.9 billion increase in gross federal debt from 2014/15 to 2023/24.
This accumulation of debt, along with recent hikes in interest rates, has raised the cost of interest
on the federal debt to one of the largest budget expense items.

Moving forward, the federal government plans to slow nominal spending growth, which will keep inflation-adjusted, per-person spending relatively constant to 2026/27. Despite this, the federal government will continue running budget deficits and accumulating debt. It is also uncertain whether the federal government’s current estimates are truly reliable as the estimates do not incorporate expected spending on pharmacare or the level of defence spending to meet Canada’s NATO commitment. Moreover, the federal government’s track record of exceeding previous spending commitments calls into question the reliability of the current spending targets. Therefore, it is clear the federal government is not implementing the level of spending restraint necessary to reverse course towards a stable fiscal situation.

An approach to federal finances that continues to run budget deficits and accumulate debt is economically harmful to both current and future generations of Canadians. Research shows that significant increases in debt-financed spending harm economic growth by reducing capital accumulation and labour productivity.

Furthermore, accumulating debt today increases the tax burden on future generations of Canadians, as they will be responsible for paying off this debt. Despite these effects, the federal government plans to continue running deficits and accumulating debt for the foreseeable future.

This need not be the case. The federal government can undertake decisive spending reform starting in 2024— similar to the reform by the Chrétien government in the 1990s—that balances the budget within a year or two. The federal government could balance the budget in 2026/27 by limiting annual growth in nominal program spending to 0.3% for two years. This would result in a 5.9% reduction in real per-person spending. Alternatively, the budget could be balanced in 2025/26 if the federal government reduces spending 4.3% for one year; the next year, 2026/27, would see a budgetary surplus. In this scenario, inflation-adjusted per-person spending would decline by 7.5%. Key trade-offs between the two approaches include the extent of the spending reform and the speed of the return to balanced budgets. Balancing the budget in one year, as opposed to two years, would
result in $30.0 billion less debt accumulated by 2026/27.

Though it is beyond the scope of this study to discuss how such spending reforms should be implemented, there are three areas that might be considered for reform. Business subsidies are a significant expense, yet research suggests they have little if any economic benefit, and may actually harm economic growth when governments pick winners and losers in a free market. Reviewing business subsidies might provide opportunities to find savings. Aligning government-sector wages
with those in the private sector would also provide savings, as government workers in Canada currently enjoy an 8.5% wage premium (on average) relative to comparable private-sector workers. Finally, studies show that government fiscal waste can be significant. From 1988 to 2013, more than 600 government failures cost the federal government between $158.3 billion and $197.1 billion. Moreover, more than 25% of all federal COVID spending was wasteful. Addressing inefficiencies within government might also reveal savings.

  • Canada has seen a deterioration in the federal government’s fiscal situation since 2015. A distinct lack of spending restraint has resulted in a string of large budget deficits, which have contributed to rising government debt and debt interest costs.
  • Despite current fiscal plans promising more of the same, the federal government could implement decisive spending reform starting in 2024/25, similar to reforms implemented in the 1990s, and balance the budget within one or two years.
  • To balance the budget by 2026/27, the federal government would need to limit growth in annual nominal program spending to 0.3 percent for two years. This would translate to a 5.9 percent reduction in inflation-adjusted, per-person spending.
  • Alternatively, the federal government could balance the budget in one year, by 2025/26, by reducing nominal program spending by 4.3 percent. Adjusted for inflation and population, this would be a 7.5 percent decrease. In 2026/27, the federal government could then record a $8.2 billion surplus even while increasing spending from the previous year.
  • While this study does not provide an in-depth analysis of where potential savings should be found, research highlights three potential areas that could be targeted for spending reform: corporate welfare, aligning government-sector wages with those in the private sector, or eliminating government fiscal waste.

A Case for Spending Restraint in Canada: How the Federal Government Can Balance the Budget

Authors:

Grady Munro
Policy Analyst, Fraser Institute
Jake Fuss
Director, Fiscal Studies, Fraser Institute

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Carney and other world leaders should recognize world’s dependence on fossil fuels

Published on November 11, 2025

By

From the Fraser Institute

By Julio Mejía and Elmira Aliakbari

Simply put, despite trillions invested in the energy transition, the world is more dependent on fossil fuels today than when the United Nations launched its first COP. No wonder that ahead of COP30, leading voices of the net-zero-by-2050 agenda, including Bill Gates, are acknowledging both the vital role of fossil fuels on the planet and the failure of efforts to cut them.

On the heels of his first federal budget, which promises more spending to promote a “green economy,” Prime Minister Carney will soon fly to Brazil for COP30, the 30th United Nations climate summit. Like the former Trudeau government, the Carney government has pledged to achieve “net-zero” emissions in Canada—and compel other countries to pursue net-zero—by 2050. To achieve a net-zero world, it’s necessary to phase out fossil fuels—oil, natural gas, coal—or offset their CO2 emissions with technologies such as “carbon capture” or large-scale tree planting.

But after trillions of dollars spent in pursuit of that goal, it appears more unrealistic than ever. It’s time for world leaders, including Canada’s policymakers, to face reality and be honest about the costly commitments they make on behalf of their citizens.

For starters, carbon capture—the process of trapping and storing carbon dioxide so it’s unable to affect the atmosphere—is a developing technology not yet capable of large-scale deployment. And planting enough trees to offset global emissions would require vast amounts of land, take decades to absorb significant CO2 and risk unpredictable losses from wildfires and drought. Due to these constraints, in their net-zero quest governments and private investors have poured significant resources into “clean energy” such as wind and solar to replace fossil fuels.

According to the International Energy Agency (IEA), from 2015 to 2024, the world’s public and private investment in clean energy totalled and estimated US$14.6 trillion (inflation-adjusted). Yet from 1995 (the first COP year) to 2024, global fossil fuel consumption increased by more than 64 per cent. Specifically, oil consumption grew by 39 per cent, natural gas by 96 per cent and coal by 76 per cent. As of 2024, fossil fuels accounted for 80.6 per cent of global energy consumption, slightly lower than the 85.6 per cent in 1995.

The Canadian case shows an even greater mismatch between Ottawa’s COP commitments and its actual results. Despite billions spent by the federal government on the low-carbon economy (electric vehicle subsidies, tax credits to corporations, etc.), fossil fuel consumption in our country has increased by 23 per cent between 1995 and 2024. Over the same period, the share of fossil fuels in Canada’s total energy consumption climbed from 62.0 to 66.3 per cent.

Simply put, despite trillions invested in the energy transition, the world is more dependent on fossil fuels today than when the United Nations launched its first COP. No wonder that ahead of COP30, leading voices of the net-zero-by-2050 agenda, including Bill Gates, are acknowledging both the vital role of fossil fuels on the planet and the failure of efforts to cut them.

Why has this massive effort, which includes many countries and trillions of dollars, failed to transition humanity away from fossil fuels?

As renowned scholar Vaclav Smil explains, it can take centuries—not decades—for an energy source to become globally predominant. For thousands of years, humanity relied on wood, charcoal, dried dung and other traditional biomass fuels for heating and cooking, with coal only becoming a major energy source around 1900. It took oil 150 years after its introduction into energy markets to account for one-quarter of global fossil fuel consumption, a milestone reached only in the 1950s. And for natural gas, it took about 130 years after its commercial development to reach 25 per cent of global fossil fuel consumption at the end of the 20th century.

Yet, coal, oil and natural gas didn’t completely replace traditional biomass to meet the surging energy demand as the modern world developed. As of 2020, nearly three billion people in developing countries still relied on charcoal, straw and dried dung to supply their basic energy needs. In light of these facts, the most vocal proponents of the global energy transition seem, at the very least, out of touch.

The world’s continued reliance on fossil fuels should prompt world leaders at COP30 to exercise caution before pushing the same unrealistic commitments of the past. And Prime Minister Carney, in particular, should be careful not to keep leading Canadians into costly ventures that lead nowhere near their intended results.

Julio Mejía

Policy Analyst

Elmira Aliakbari

Director, Natural Resource Studies, Fraser Institute
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Business

Liberals refuse to disclose the amount of taxpayer dollars headed to LGBT projects in foreign countries

Published on November 11, 2025

By

From LifeSiteNews

By Anthony Murdoch

The Liberal government of Prime Minister Mark Carney will not openly disclose how much money from its foreign-aid budget is going toward overseas “gender identity” and “decolonization” projects.

According to the government, there are “concerns” that disclosing the amount of funds could endanger certain LGBT organizations that get money from it.

On November 3, Global Affairs Canada, in response to a question on the order paper from a Conservative MP, said that the funding amounts could not be made public due to claimed “security concerns” and “confidentiality requirements.”

“These are the most common reasons projects are considered sensitive: the organization or individuals might be in danger if it becomes known that they are receiving funds from a foreign government; (or) implementing a project related to sensitive topics such as two-spirit, lesbian, gay, bisexual, transgender, queer, intersex and additional sexually and gender-diverse people rights, human trafficking, early/forced marriage, (and) human rights defenders,” Global Affairs noted. 

Continuing, Global Affairs said that there is a possible “danger” to partner organizations that could be “forced to close” or even “arrested” due to “harassment from the local population or government.”

As reported by LifeSiteNews, Carney’s budget will include millions in taxpayer money for “SLGBTQI+ communities,” gender equality, and “pride” safety.

Canada’s 2025 federal budget is allotting some $54.6 million to LGBT groups in a move criticized by Campaign Life Coalition as prioritizing activist agendas over struggling families’ basic needs.

Canadian taxpayers are already dealing with high inflation and high taxes due in part to the Liberal government overspending and excessive money printing, and even admitting that giving money to Ukraine comes at the “taxpayers’” expense.

As recently reported by LifeSiteNews, Bank of Canada Governor Tiff Macklem gave a grim assessment of the state of the economy, essentially telling Canadians that they should accept a “lower” standard of living.

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