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Federal government poised to pile on more spending and debt

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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.

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Warning Canada: China’s Economic Miracle Was Built on Mass Displacement

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If you think the CCP will treat foreigners better than its own people, when it extends its power over you, please think again: Dimon Liu’s warning to Canadian Parliament.

Editor’s Note: The Bureau is publishing the following testimony to Canada’s House of Commons committee on International Human Rights from Dimon Liu, a China-born, Washington, D.C.-based democracy advocate who testified in Parliament on December 8, 2025, about the human cost of China’s economic rise. Submitted to The Bureau as an op-ed, Liu’s testimony argues that the Canadian government should tighten scrutiny of high-risk trade and investment, and ensure Canada’s foreign policy does not inadvertently reward coercion. Liu also warns that the Chinese Communist Party could gain leverage over Canadians and treat them as it has done to its own subjugated population—an implied message to Prime Minister Mark Carney, who has pledged to engage China as a strategic partner without making that position clear to Canadians during his election campaign.

OTTAWA — It is an honor to speak before you at the Canadian Parliament.

My testimony will attempt to explain why China’s economic success is built on the backs of the largest number of displaced persons in human history.

It is estimated that these displaced individuals range between 300 to 400 million — it is equivalent to the total population of the United States being uprooted and forced to relocate. These displaced persons are invisible to the world, their sufferings unnoticed, their plights ignored.

In 1978, when economic reform began, China’s GDP was $150 billion USD.

In 2000, when China joined the WTO, it was approximately $1.2 trillion USD.

China’s current GDP is approximately $18 trillion USD.

In 2000 China’s manufacturing output was smaller than Italy’s.

Today it’s larger than America, Europe, Japan, and South Korea combined.

If you have ever wondered how China managed to grow so fast in such a short time, Charles Li, former CEO of the Hong Kong Stock Exchange, has the answers for you.

He listed 4 reasons: 1) cheapest land, 2) cheapest labor, 3) cheapest capital, and 4) disregard of environmental costs.

“The cheapest land” because the CCP government took the land from the farmers at little to no compensation.

“The cheapest labor,” because these farmers, without land to farm, were forced to find work in urban areas at very low wages.

The communist household registration system (hukou 戶口) ties them perpetually to the rural areas. This means they are not legal residents, and cannot receive social benefits that legal urban residents are entitled. They could be evicted at any time.

One well known incident of eviction occurred in November 2017. Cai Qi, now the second most powerful man in China after Xi Jinping, was a municipal official in Beijing. He evicted tens of thousands into Beijing’s harsh winter, with only days, or just moments of notice. Cai Qi made famous a term, “low-end population” (低端人口), and exposed CCP’s contempt of rural migrants it treats as second class citizens.

These displaced migrant workers have one tradition they hold dear — it is to reunite with their families during the Chinese Lunar New Year holiday, making this seasonal migration of 100 to 150 million people a spectacular event. In China’s economic winter of 2025 with waves of bankruptcies and factory closures, the tide of unemployed migrant workers returning home to where there is also no work, and no land to farm, has become a worrisome event.

Historically in the last 2,000 years, social instability has caused the collapse of many ruling regimes in China.

“The cheapest capital” is acquired through predatory banking practices, and through the stock markets, first to rake in the savings of the Chinese people; and later international investments by listing opaque, and state owned enterprises in leading stock markets around the world.

“A disregard of environmental costs” is a hallmark of China’s industrialization. The land is poisoned, so is the water; and China produces one-third of all global greenhouse gases.

Chinese Communist officials often laud their system as superior. The essayist Qin Hui has written that the Chinese communist government enjoys a human rights abuse advantage. This is true. By abusing its own people so brutally, the CCP regime has created an image of success, which will prove to be a mirage.

If you think the CCP will treat foreigners better than its own people, when it extends its power over you, please think again.

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Judge Declares Mistrial in Landmark New York PRC Foreign-Agent Case

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Sam Cooper's avatar Sam Cooper

U.S. District Judge Brian Cogan declared a mistrial Monday afternoon in the high-profile foreign-agent and corruption case against former New York state official Linda Sun and her husband Chris Hu, after jurors reported they were hopelessly deadlocked on all 19 counts.

After restarting deliberations Monday morning with an alternate juror, the panel sent a note to Judge Cogan stating:

“Your honor, after extensive deliberations and redeliberations the jury remains unable to reach a unanimous verdict. The jurors’ positions are firmly held.”

Cogan brought the jury into court and asked the foreman whether they had reached agreement on any counts. They replied that they were deadlocked on every one. The judge then declared a mistrial.

Assistant U.S. Attorney Alexander Solomon immediately told the court that the government intends to retry the case “as soon as possible.” A status conference is scheduled for January 26, 2026, to determine next steps.

Jury selection began November 10, 2025, and the government called 41 witnesses to the stand, compared with eight for the defense and one rebuttal witness for the prosecution. Deliberations began on December 12, and by this afternoon the jurors had sent three notes to the court — each indicating deadlock.

As The Bureau reported in its exclusive analysis Friday, the panel’s fracture had become visible as jurors headed into a second week of deliberations in a landmark foreign-agent and corruption trial that reached into two governors’ offices — a case asking a jury of New Yorkers to decide whether Sun secretly served Beijing’s interests while she and Hu built a small business and luxury-property empire during the pandemic, cashing in on emergency procurement as other Americans were locked down.

Prosecutors urged jurors to accept their account of a dense web of family and Chinese-community financial transactions through which Sun and Hu allegedly secured many millions of dollars in business deals tied to “United Front” proxies aligned with Beijing. The defense, by contrast, argued that Sun and Hu were simply successful through legitimate, culturally familiar transactions, not any covert scheme directed by a foreign state.

Sun and Hu face 19 charges in total, including allegations that Sun acted as an unregistered foreign agent for the People’s Republic of China; visa-fraud and alien-smuggling counts tied to a 2019 Henan provincial delegation; a multimillion-dollar pandemic PPE kickback scheme; bank-fraud and identity-misuse allegations; and multiple money-laundering and tax-evasion counts.

Prosecutors have argued that the clearest money trail ran through New York’s COVID procurement scramble and a pair of Jiangsu-linked emails. In closing, Solomon told jurors that Sun’s “reward” for steering contracts was “millions of dollars in kickbacks or bribes,” contending the money was routed through accounts opened in Sun’s mother’s name and via friends and relatives.

The government has tied those claims to a broader narrative — laid out in Solomon’s summation and dissected in The Bureau’s reporting — that Sun functioned as a “trusted insider” who repurposed state access and letterhead to advance Beijing’s priorities, including by allegedly forging Governor Kathy Hochul’s signature on invitation letters used for Chinese provincial delegations, while keeping those relationships hidden from colleagues. The defense, in turn, urged jurors to reject the government’s picture of clandestine agency and argued prosecutors had overreached by treating ordinary diaspora networking, trade promotion, and pandemic procurement as criminal conduct — insisting none of the evidence proved the “direction or control” element central to the Foreign Agents Registration Act.

Whether a future jury will see the same evidence as corruption and covert foreign agency or as culturally familiar commerce and politics — will now be tested again, on a new timetable, in a courtroom that has already shown just how difficult this record is to unanimously interpret.

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