Business
Federal government poised to pile on more spending and debt
From the Fraser Institute
Next week, the Trudeau government will release its fall fiscal update, which, considering the sorry state of federal finances, should demonstrate a newfound approach to spending and borrowing. But don’t hold your breath.
Although the Trudeau government describes itself as “fiscally responsible,” in reality it has a track record of unrestrained spending and large budget deficits. And it’s overseen the five highest years (2018 to 2022) of per-person program spending (adjusted for inflation) in Canadian history. Even excluding COVID-related spending, 2020 and 2021 remain the two highest years of per-person spending on record.
The Trudeau government has also run deficits every year since it took office in 2015—according to forecasts, this year’s deficit will eclipse $40 billion even though COVID is in the rearview mirror. Consequently, federal debt will have increased nearly $900 billion since 2014/15, up to $1.9 trillion for 2023/24.
While the prime minister and Finance Minister Chrystia Freeland often downplay the level of debt accumulation by noting that Canada has the lowest net debt-to-GDP ratio among the G7 countries (Germany, Italy, Japan, France, the United Kingdom and the United States), this is misleading.
Net debt is calculated as total (gross) debt minus all financial assets, with the implicit assumption that those assets could be used to offset debt. However, the Canada and Quebec Pension Plans (CPP and QPP) are included in the financial assets used to calculate net debt in Canada. But because CPP/QPP assets are needed for existing and future retirees, in reality they can’t be used to offset government debt.
Therefore, a better measure is gross debt, which measures all liabilities that require future payment of interest and/or principal by the debtor to the creditor. Compared to 29 other advanced economies, including the G7 countries, Canada’s gross debt as a share of the economy ranks 20th—meaning Canada is among the most indebted countries.
Clearly, the Trudeau government has been anything but fiscally responsible. And the current levels of spending and borrowing impose real costs on Canadians.
For example, since 2014/15 federal government debt interest costs have nearly doubled—reaching an estimated $43.9 billion, or 9.6 per cent of total revenues, for 2023/24. This means roughly one in every 10 dollars Ottawa collects from Canadian taxpayers this year will go towards debt interest costs, rather than government services or tax relief.
In light of these fiscal realities, if the Trudeau government wants to move anywhere close to a balanced budget in the foreseeable future, it must take meaningful steps in the upcoming fall fiscal update to restrain spending growth.
Unfortunately, this is unlikely to happen.
In a recent report, the Parliamentary Budget Officer (PBO) estimated that, due to spending increases, the federal government will run a deficit of $46.5 billion for 2023/24—$6.4 billion more than the government’s budget projections in March.
The government will also likely include new spending in the upcoming fiscal update meant to address housing and affordability. And will likely soon table legislation on national pharmacare, which the PBO estimates will cost $11.2 billion in 2024/25 alone.
Finally, not only does this unprecedented level of spending rack up mountains of debt, according to Bank of Canada Governor Tiff Macklem, “government spending is starting to get in the way of getting inflation back to target.” In other words, more spending by the federal government to address affordability concerns could actually worsen the problem by keeping inflation (and interest rates) higher than would otherwise be the case, eroding the purchasing power of Canadians.
While Ottawa’s fiscal situation demands a fiscally responsible fall fiscal update, it’s likely we’ll see much of the same next week from the Trudeau government—more spending and more borrowing.
Authors:
From the Daily Caller News Foundation
You’ve probably heard by now the blockbuster news that Microsoft founder Bill Gates, one of the richest people to ever walk the planet, has had a change of heart on climate change.
For several decades Gates poured billions of dollars into the climate industrial complex.
Some conservatives have sniffed that Bill Gates has shifted his position on climate change because he and Microsoft have invested heavily in energy intensive data centers.
AI and robotics will triple our electric power needs over the next 15 years. And you can’t get that from windmills.
What Bill Gates has done is courageous and praiseworthy. It’s not many people of his stature that will admit that they were wrong. Al Gore certainly hasn’t. My wife says I never do.
Although I’ve only once met Bill Gates, I’ve read his latest statements on global warming. He still endorses the need for communal action (which won’t work), but he has sensibly disassociated himself from the increasingly radical and economically destructive dictates from the green movement. For that, the left has tossed him out of their tent as a “traitor.”
I wish to highlight several critical insights that should be the starting point for constructive debate that every clear-minded thinker on either side of the issue should embrace.
(1) It’s time to put human welfare at the center of our climate policies. This includes improving agriculture and health in poor countries.
(2) Countries should be encouraged to grow their economies even if that means a reliance on fossil fuels like natural gas. Economic growth is essential to human progress.
(3) Although climate change will hurt poor people, for the vast majority of them it will not be the only or even the biggest threat to their lives and welfare. The biggest problems are poverty and disease.
I would add to these wise declarations two inconvenient truths: First: the solution to changing temperatures and weather patterns is technological progress. A far fewer percentage of people die of severe weather events today than 50 or 100 or 1,000 years ago.
Second, energy is the master resource and to deny people reliable and affordable energy is to keep them poor and vulnerable – and this is inhumane.
If Bill Gates were to start directing even a small fraction of his foundation funds to ensuring everyone on the planet has access to electric power and safe drinking water, it would do more for humanity than all of the hundreds of billions that governments and foundations have devoted to climate programs that have failed to change the globe’s temperature.
Stephen Moore is a co-founder of Unleash Prosperity and a former Trump senior economic advisor.
From the Daily Caller News Foundation
At Tesla’s Austin headquarters, investors backed Musk’s 12-step plan that ties his potential trillion-dollar payout to a series of aggressive financial and operational milestones, including raising the company’s valuation from roughly $1.4 trillion to $8.5 trillion and selling one million humanoid robots within a decade. Musk hailed the outcome as a turning point for Tesla’s future.
“What we’re about to embark upon is not merely a new chapter of the future of Tesla but a whole new book,” Musk said, as The New York Times reported.
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The decision cements investor confidence in Musk’s “moonshot” management style and reinforces the belief that Tesla’s success depends heavily on its founder and his leadership.
Tesla Annual meeting starting now
https://t.co/j1KHf3k6ch— Elon Musk (@elonmusk) November 6, 2025
“Those who claim the plan is ‘too large’ ignore the scale of ambition that has historically defined Tesla’s trajectory,” the Florida State Board of Administration said in a securities filing describing why it voted for Mr. Musk’s pay plan. “A company that went from near bankruptcy to global leadership in E.V.s and clean energy under similar frameworks has earned the right to use incentive models that reward moonshot performance.”
Investors like Ark Invest CEO Cathie Wood defended Tesla’s decision, saying the plan aligns shareholder rewards with company performance.
“I do not understand why investors are voting against Elon’s pay package when they and their clients would benefit enormously if he and his incredible team meet such high goals,” Wood wrote on X.
Norway’s sovereign wealth fund, Norges Bank Investment Management — one of Tesla’s largest shareholders — broke ranks, however, and voted against the pay plan, saying that the package was excessive.
“While we appreciate the significant value created under Mr. Musk’s visionary role, we are concerned about the total size of the award, dilution, and lack of mitigation of key person risk,” the firm said.
The vote comes months after Musk wrapped up his short-lived government role under President Donald Trump. In February, Musk and his Department of Government Efficiency (DOGE) team sparked a firestorm when they announced plans to eliminate the U.S. Agency for International Development, drawing backlash from Democrats and prompting protests targeting Musk and his companies, including Tesla.
Back in May, Musk announced that his “scheduled time” leading DOGE had ended.
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