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Federal government’s promises of deficit reduction ring hollow

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5 minute read

From the Fraser Institute

By Ben Eisen and Jake Fuss

” the most credible promises are introduced with immediate action “

As budget season approaches, it’s worth remembering that policymakers must pair promises of fiscal discipline with concrete action.

According to projections, the Trudeau government will run a $40.0 billion deficit this fiscal year, which is slightly larger than last year’s $35.3 billion deficit, even though revenues are up almost $10.0 billion. Finance Minister Chrystia Freeland has repeatedly said that the era of large deficits won’t last forever and promised that starting in 2026/27 the federal deficit will be held every year to less than one per cent of GDP (the value of all goods and services produced in the economy).

But Freeland’s promises should be taken with more than a grain of salt because all governments have spotty track records when it comes to fiscal promises, particularly when they’re based on spending restraint in the future. Conversely, the most credible promises are introduced with immediate action.

The most famous example in Canada’s recent fiscal history came in the 1990s when Paul Martin, the then-Liberal government’s finance minister, vowed to slay Canada’s crippling budget deficit and repair federal finances “come hell or high water.” Martin’s words were accompanied by immediate action in the form of the transformative 1995 federal budget that began a process of deep budget cuts and major policy reforms that immediately put the government on a path to fiscal balance. The deficit was quickly eliminated and Canada was put on a sound fiscal footing that served the country well for almost two decades.

The “hell or high water” episode shows us how governments must match strong commitments with strong actions to increase the likelihood of success. On the other hand, promises for fiscal improvements in the future—unaccompanied by any concurrent action—usually aren’t worth the paper (or Tweets) they’re printed on.

The Trudeau government has produced many examples of incredible promises. First, on the campaign trail back in 2015, Trudeau and his team promised small and temporary deficits, and to shrink the national debt burden. Since then, the prime minister and his finance ministers have never been shy about promising to improve the bottom line. However, the target dates associated with these promises came and went without much notice, and the government pivoted to new plausible-sounding targets, using only words without policy change.

Again, the Trudeau government is far from alone in this tendency. In Ontario, Premier Wynne’s government repeatedly promised to shrink that province’s daunting debt burden, yet failed to decisively act. Basically, it was wishful thinking.

After Ontarians voted out the Wynne government, the Ford government promised to break from the Wynne approach and introduce real reforms that would slay the deficit quickly. But after a few half-hearted feints in the direction of fiscal discipline, the Ford government also failed to make good on its promises of debt reduction and as a result Ontario remains stuck under a mountain of government debt.

Canadian history is clear—unless government promises coincide with concrete actions to immediately start shrinking budget deficits, these promises of fiscal restraint at some future date shouldn’t be given much credence. Minister Freeland’s recent promises fall into this category. In the upcoming federal budget, if the Trudeau government and its cabinet want its promises to be credible, it must learn from its Liberal predecessors and their “hell or high water” moment, and reduce spending to immediately begin a process of deficit reduction.

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Frontier Centre for Public Policy

Canada’s elites suppress freedom of speech on indigenous matters

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From the Frontier Centre for Public Policy

By Peter Best

Under section 2 of the Charter of Rights and Freedoms, Canadians are guaranteed freedom of thought, belief, and expression. These freedoms are fundamental in our democratic society. In fact, an official government commentary on the Charter states: “In a democracy, people must be free to discuss matters of public policy, criticize governments and offer their own solutions to social problems.”

Given this claim, it is, indeed, a mystery why free speech is protected when people say  that Israel’s policies and practices towards the Palestinians are “racist,” but not when they say that Canada’s policies and practices towards Indigenous peoples are “racist.”

When it comes to Indigenous issues, our academic, media, and political elites have a Charter of Rights free speech blind spot. They refuse to allow contrary minded, but enlightened Nelson Mandela-like beliefs to be voiced unless those people want to be labeled as “racist.” Only a few brave souls have been willing to be pillarized by transgressing this “sacred” boundary.

This writer went over this line when he arranged a Chapters book-signing for There Is No Difference, a book that advocates for the greater integration of Indigenous people into Canadian society, only to have the event cancelled by the bookstore  who chose silence over free speech. Surprisingly, only one mainstream journalist, Barbara Kay in The National Post, defended my free speech rights.

But I am not alone.

A few years ago, Senator Lynn Beyak dared to say that some good came from residential schools, a view that is, in fact, reflected in the Truth and Reconciliation (TRC) Report, and was shared by eminent Indigenous author and residential school student Basil Johnston in his book, Indian School Days.

For making defensible assertions, Senator Beyak was excoriated by politicians from all parties, and mocked by editorial writers as an ignorant rube. In 2019, she was kicked out of the Conservative caucus, and shortly after she resigned from the Senate.

Associate Professor Frances Widdowson was exercising her “academic freedom,” but, nevertheless, was fired from Mount Royal University in 2021 for challenging the Indigenous status quo. In doing so, the university proved that its core mission was to protect the feelings of Indigenous people and not to challenge fallacies and uphold truth-seeking in a free and open debate.

The same year, an Abbotsford B.C. high school teacher, Jim McMurtry, was fired for saying that most Indigenous children who died in residential schools died because of diseases like influenza and tuberculosis. Even though this fact is reported in the TRC Report, it did not save Mr. McMurtry from unceremonially losing his teaching career.

In 2024, the mayor of Quesnel B.C., Ron Paull, was censured and the nearby First Nations bands boycoted him because his wife — a private citizen in her own right — handed out copies of Grave Error to friends and acquaintances. This book is a scholarly challenge to the “cultural genocide” claimed by the Kamloops Indigenous band.

Also, in 2024, a Manitoba school trustee, Paul Coffey, faced pressure to resign for publicly echoing what Senator Beyak had said a few years earlier.

These cases — and many others — clearly illustrate that no government official, no member of a provincial or territorial legislature, and few mainstream academics and journalists will defend contrary-minded “heretics” exercising their right to free speech, a right that is enshrined in the Canadian Charter of Rights and Freedoms.

In fact, few mainstream news media outlets reported on these stories in a dispassionate and professional way. The CBC, for example, consistently emphasizes the “hurt feelings of the aggrieved,” making their outrage the focus of their reporting. In no media reports has the CBC mentioned the Charter of Rights and Freedoms, implying that Charter protected freedom of speech is no longer relevant in their reporting on Indigenous matters.

Hurt feelings, of course, are irrelevant to academics and journalists because the search for truth always involves controversies that hurt the feelings of some people.

Even more outrageous, the federal government has actively demonized Canadians who challenge misinformation about Indigenous people by proposing to make it a crime for people to engage in what it calls “residential school denialism.” As a result, people who care about the best interests of Indigenous peoples but have contrary-minded views, are afraid to speak up for fear of being called “denialists,” as if they were denying the European Holocaust.

Nevertheless, many Canadians believe that the proper way to advance reconciliation with Indigenous people is to phase out the dependency relationship that has grown since the Indian Act was enacted in 1876. Many also think that Indigenous peoples should be equal with other Canadians—no better, and certainly no worse.

Some Canadians even believe that Canadian governments should not support the United Nations Declaration on the Rights of Indigenous People (UNDRIP) that creates a strong “consult and accommodate” hammerlock on the development of Canadian resources. Similarly, many believe that the “nation to nation” relationship is polarizing citizens leading to ruinous economic and social policies for both Indigenous bands and Canadian society.

Unfortunately, the vast majority of Canadians realize that it is best to keep thoughts like these ones to themselves.

Our elites have breached their fiduciary responsibilities to Canadians. It is a tragedy that they do not encourage other viewpoints. In this respect, Peter Wehner correctly says: “The truths to be discovered are complex and many-sided, and the only way to get to them is by engaging with contrary ideas in a manner approaching dialogue.”

It would be in the best interest of Canadians, if our elites shed their hostility towards those who disagree with them. But to do this, they need to develop the confidence and open-mindedness that the French philosopher Montaigne implied when he wrote: “When I am contradicted it arouses my attention, not my wrath. I move towards the man who contradicts me; he is instructing me. The cause of truth ought to be common to both of us.”

But in discussing Canadian Indigenous issues, the Canadian elites are inexplicably unwilling to grant to others the same Charter of Rights-free speech presumptions that they keep for themselves when they support “anti-Zionists” shouting obnoxious statements and insults. When they do this, they are dividing Canadians, losing our trust, and increasing the grave harm to all Canadians but especially to Indigenous Canadians.

 Peter Best is a retired lawyer in Sudbury and the author of There is no Difference which argues that Canada’s laws should be changed to make all Canadians equal under the law, regardless of race.

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Alberta

Defending Provincial Priorities

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News release from Free Alberta Strategy

The recent debate around zoning across the province is a prime example of federal encroachment.

The federal government offered money to cities to help with housing affordability challenges, but only made the money available if cities promised to change zoning policies.

As you are aware, The Free Alberta Strategy was built on the concept that the federal government needs to keep out of provincial jurisdiction.

For years, Ottawa has been watering down the constitutional delineation of duties between the federal government and the provincial government.

Bill 18 – the Provincial Priorities Act – is anticipated to pass in the Alberta Legislature this week, and represents a huge step in the direction of greater provincial jurisdictional autonomy.

The Provincial Priorities Act has been dubbed the “Keep Out of Our Backyard” law by Alberta Premier Danielle Smith.

Under the Provincial Priorities Act, any agreements between the federal government and any provincial entities – including municipalities – must receive provincial approval to be considered valid.

Agreements between the federal government and provincial entities lacking Alberta’s endorsement will be deemed illegal under this legislation.

When the legislation was announced, Smith was not mincing words:

“It is not unreasonable for Alberta to demand fairness from Ottawa. They have shown time and again that they will put ideology before practicality, which hurts Alberta families and our economy. We are not going to apologize for continuing to stand up for Albertans so we get the best deal possible.

“Since Ottawa refuses to acknowledge the negative impacts of its overreach, even after losing battles at the Federal and Supreme Courts, we are putting in additional measures to protect our provincial jurisdiction to ensure our province receives our fair share of federal tax dollars and that those dollars are spent on the priorities of Albertans.”

Although the federal government has limited direct authority in provincial jurisdiction, it can leverage its substantial financial resources to prompt or pressure provincial governments into specific actions.

The recent debate around zoning across the province is a prime example of federal encroachment.

The federal government offered money to cities to help with housing affordability challenges, but only made the money available if cities promised to change zoning policies.

Calgary Mayor Jyoti Gondek tried to claim that the federal housing funds were not contingent on the city’s rezoning efforts, but federal Housing Minister Sean Fraser posted a pretty strong response on social media platform X (formerly Twitter):

“If Calgary, or any other city, does not meet the conditions they have agreed to, we will withhold funding under the agreement.”

The federal government played the same trick in many other provinces, too.

But, notably, in Quebec, the federal government just gave the Quebec government the cash and let them distribute it to their municipalities without conditions.

It’s tempting to think this is just more federal bias towards Quebec.

But, actually, this is a great example of how pushing back can have results.

You see, the Provincial Priorities Act in Alberta is modeled after existing legislation in Quebec, known as “An Act Respecting the Ministère du Conseil exécutif,” which prohibits any municipal body from negotiating or entering into agreements with the federal government or its agencies without explicit authorization from the Quebec government.

If Ottawa wants to meddle in Quebec’s jurisdiction, it must first seek Quebec’s approval.

And it works – the federal government got back in line.

Now, with the Provincial Priorities Act, if Ottawa wants to meddle in Alberta’s jurisdiction, it must first seek Alberta’s approval.

It’s time for Ottawa to recognize Alberta’s autonomy and respect our right to determine our own future.

At the Free Alberta Strategy, we understand that constant vigilance is necessary – every time we establish a boundary, the federal government tries to circumvent it.

We will continue to inform you about what’s happening in Alberta and fight to keep Ottawa out.

But we need your support.

With your help, we can continue our work to defend Alberta’s sovereignty and serve the best interests of all Albertans.

Enough is enough – we will not stand by while our interests are disregarded.

If you are in a financial position to contribute to our work, please donate!

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