Business
Every week, Canadians are paying a billion dollars in interest payments thanks to federal government overspending
From the Canadian Taxpayers Federation
PBO projects higher deficit than Budget 2024
The Canadian Taxpayers Federation is calling on the federal government to immediately cut spending following today’s Parliamentary Budget Officer report showing the deficit is $6.6 billion over budget.
“As bad as the budget was, the independent budget watchdog is showing federal finances are in even worse shape,” said Franco Terrazzano, CTF Federal Director. “The Trudeau government continues to mismanage our finances and that means more money wasted on interest charges, higher taxes and more debt that Canadians’ kids and grandkids have to pay back.”
The PBO’s October 2024 Economic and Fiscal Outlook projects this year’s deficit at $46.4 billion. That’s up from Budget 2024’s deficit of $39.8 billion.
“Compared to our March 2024 outlook, we project budgetary deficits that are $4.1 billion higher, on average, over 2023-24 to 2028-29,” according to the PBO. “This increase is largely due to new spending measures announced by the Government.”
Interest on the debt will cost taxpayers $52.8 billion this year, according to the PBO. For comparison, the federal government will spend $52.1 billion through its Canada Health Transfer this year.
Almost 11 per cent of the government’s revenue will go to paying interest on the debt this year, which is above the pre-pandemic level of seven per cent, according to the PBO.
“It’s 2024, the pandemic is over, so it’s ridiculous and unacceptable for the government to be running a $40-billion deficit,” Terrazzano said. “Massive deficits for years mean debt interest charges now blow a $1-billion hole in the budget every week.
“The government must cut spending.”
From the Fraser Institute
By Matthew Lau
From 2015 to 2024, headcount at Natural Resources Canada increased 39 per cent even though employment in Canada’s natural resources sector actually fell one per cent. Similarly, there was 382 per cent headcount growth at the federal department for Women and Gender Equality—obviously far higher than the actual growth in Canada’s female population.
According to a recent poll, there’s widespread support among Canadians for reducing the size of the federal bureaucracy. The support extends across the political spectrum. Among the political right, 82.8 per cent agree to reduce the federal bureaucracy compared to only 5.8 per cent who disagree (with the balance neither agreeing nor disagreeing); among political moderates 68.4 per cent agree and only 10.0 per cent disagree; and among the political left 44.8 per cent agree and 26.3 per cent disagree.
Taken together, “67 per cent agreed the federal bureaucracy should be significantly reduced. Only 12 per cent disagreed.” These results shouldn’t be surprising. The federal bureaucracy is ripe for cuts. From 2015 to 2024, the federal government added more than 110,000 new bureaucrats, a 43 per cent increase, which was nearly triple the rate of population growth.
This bureaucratic expansion was totally unjustified. From 2015 to 2024, headcount at Natural Resources Canada increased 39 per cent even though employment in Canada’s natural resources sector actually fell one per cent. Similarly, there was 382 per cent headcount growth at the federal department for Women and Gender Equality—obviously far higher than the actual growth in Canada’s female population. And there are many similar examples.
While in 2025 the number of federal public service jobs fell by three per cent, the cost of the federal bureaucracy actually increased as the number of fulltime equivalents, which accounts for whether those jobs were fulltime or part-time, went up. With the tax burden created by the federal bureaucracy rising so significantly in the past decade, it’s no wonder Canadians overwhelmingly support its reduction.
Another interesting poll result: “While 42 per cent of those surveyed supported the government using artificial intelligence tools to resolve bottlenecks in service delivery, 32 per cent opposed it, with 25 per cent on the fence.” The authors of the poll say the “plurality in favour is surprising, given the novelty of the technology.”
Yet if 67 per cent of Canadians agree with significantly shrinking the federal bureaucracy, then solid support for using AI to increasing efficiency should not be too surprising, even if the technology is relatively new. Separate research finds 58 per cent of Canadian workers say they use AI tools provided by their workplace, and although many of them do not necessarily use AI regularly, of those who report using AI the majority say it improves their productivity.
In fact, there’s massive potential for the government to leverage AI to increase efficiency and control labour expenses. According to a recent study by a think-tank at Toronto Metropolitan University (formerly known as Ryerson), while the federal public service and the overall Canadian workforce are similar in terms of the percentage of roles that could be made more productive by AI, federal employees were twice as likely (58 per cent versus 29 per cent) to have jobs “comprised of tasks that are more likely to be substituted or replaced” by AI.
The opportunity to improve public service efficiency and deliver massive savings to taxpayers is clearly there. However, whether the Carney government will take advantage of this opportunity is questionable. Unlike private businesses, which must continuously innovate and improve operational efficiency to compete in a free market, federal bureaucracies face no competition. As a result, there’s little pressure or incentive to reduce costs and increase efficiency, whether through AI or other process or organizational improvements.
In its upcoming budget and beyond, it would be a shame if the federal government does not, through AI or other changes, restrain the cost of its workforce. Taxpayers deserve, and clearly demand, a break from this ever-increasing burden.
Matthew Lau
Adjunct Scholar, Fraser Institute
From the Daily Caller News Foundation
Later this week the United Nations will hold a vote on a multi-billion climate-change tax targeted squarely at American industry. Without quick and decisive action by the White House, this U.N. tax on fossil fuels will become international law.
This resolution before the International Maritime Organization will impose a carbon tax on cargo and cruise ships that carry $20 trillion of merchandise over international waters. Roughly 80% of the bulkage of world trade is transported by ship.
The resolution is intended to advance the very “net zero” carbon emissions standard that has knee-capped the European economies for years and that American voters have rejected.
This tax is clearly an unnecessary restraint on world trade, thus making all citizens of the world poorer.
It is also an international tax that would be applied to American vessels and, as such, is a dangerous precedent-setting assault on U.S. sovereignty. Since when are American businesses subject to international taxes imposed by the United Nations?
The U.S maritime industry believes the global tax would cost American shippers more than $100 billion over the next seven years if enacted.
Worst of all, if the resolution passes, it will require the retirement of older ships and enable a multi-billion-dollar wealth transfer to China, which has come to dominate shipbuilding in recent years. China STRONGLY supports the tax scheme, even though, ironically, no nation has emitted more pollutants into the atmosphere than they have. Yet WE are getting socked with a tax that indirectly pays for THEIR pollution.
Despite the fact that we pay a disproportionate share of the tax, the U.S. has almost no say on how the revenues are spent. This is the ultimate form of taxation without representation.
Even if the United States chooses not to implement the tax on domestic shipping, it will still be enforced by foreign ports of origin or destination as well as by flag states. As a result, American importers and exporters will be required to pay the tax regardless of domestic policy decisions.
Secretary of State Marco Rubio, Secretary of Energy Chris Wright, and Secretary of Transportation Sean Duffy have jointly stated that America “will not accept any international environmental agreement that unduly or unfairly burdens the United States or our businesses.” They call the financial impact on the U.S. of this global carbon tax “disastrous, with some estimates forecasting global shipping costs increasing as much as 10% or more.”
The U.S. maritime industry complains that although American vessels carry only about 12% of the globally shipped merchandise, U.S. flag vessels would bear almost 20% of this tax. No wonder China and Europe are for it. The EU nations get 17 yes votes to swamp the one no vote out of Washington.
Unfortunately, right now without White House pressure, we could lose this vote because of defections by our allies.
To prevent this tax, the White House should announce a set of retaliation measures. This could include a dollar-for-dollar reduction in U.S. payments to NATO, the U.N., IMF and World Bank.
At a time when financial markets are dealing with trade disputes, the last thing the world — least of all the United States — needs is a United Nations excise tax on trade.
Stephen Moore is co-founder of Unleash Prosperity and a former Trump senior economic advisor.
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