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Ignore Ottawa’s talking points—Canada is a highly indebted country

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From the Fraser Institute

By Jake Fuss

Canada falls 21 positions in international rankings after switching from net debt to gross debt, the largest change by far of any country.

The Trudeau government has claimed that Canada “continues to have an enviable fiscal and debt position relative to international peers” because we have the lowest net debt-to-GDP ratio in the G7. But this is misleading. In reality, Canada is actually a highly indebted country relative to our international peers.

The government’s claim originates from the International Monetary Fund (IMF), which notes that Canada has the lowest level of net debt (as a share of its economy) among G7 countries including Germany, Italy, Japan, France, the United Kingdom and the United States. But this specific measure of debt subtracts financial assets from total government debt.

Here’s why that’s a problem.

Again, when calculating net debt, you subtract financial assets because you assume those assets could be used to offset debt. The glaring problem here is that Canada’s financial assets include the assets of Canada Pension Plan (CPP) and Quebec Pension Plan (QPP), which substantially reduce Canada’s net debt. Indeed, according to the latest data from Statistics Canada, there were net assets of $716.7 billion in the combined CPP and QPP as of Dec. 31, 2023.

But the assets of the CPP and QPP are used for payments to existing and future retirees and can’t be used to offset government debt without compromising the ability of the CPP and QPP to provide benefits to retirees. So, Canada having the lowest net debt-to-GDP in the G7 doesn’t mean much when CPP and QPP assets are incorrectly used to make us look less indebted than we actually are.

Thankfully, there’s a much more accurate way to measure of Canada’s indebtedness—gross debt-to-GDP. Gross debt, according to the IMF, includes all “liabilities that require future payment of interest and/or principal by the debtor to the creditor.” And extending the analysis to include a broader group of advanced countries provides a more accurate assessment of Canada’s comparative indebtedness.

According to a new study, among 32 industrialized countries, Canada slides from the 5th-lowest debt ranking when net debt is measured to 26th when gross debt is used. Further, Canada’s gross debt exceeds the total size of the national economy by nearly 5 percentage points. In other words, Canada falls 21 positions in international rankings after switching from net debt to gross debt, the largest change by far of any country.

The consequences of fiscal imprudence are clear. Just like households, governments must pay interest on debt. In 2024, Canada’s federal debt interest costs are expected to eclipse $54.0 billion—equal to the entire amount of revenue the government collects from the Goods and Services Tax (GST). And debt must be repaid by future generations of Canadians through tax increases or reduction in services.

When the Trudeau government claims that Canada is in an enviable position relative to our peers on government indebtedness, it is misleading Canadians. The data clearly show that Canada is among the most indebted advanced economies in the world. That’s not something to boast about.

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Major Projects Office Another Case Of Liberal Political Theatre

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From the Frontier Centre for Public Policy

By Lee Harding

Ottawa’s Major Projects Office is a fix for a mess the Liberals created—where approval now hinges on politics, not merit.

They are repeating their same old tricks, dressing up political favouritism as progress instead of cutting barriers for everyone

On Sept. 11, the Prime Minister’s Office announced five projects being examined by its Major Projects Office, all with the potential to be fast-tracked for approval and to get financial help. However, no one should get too excited. This is only a bad effort at fixing what government wrecked.

During the Trudeau years, and since, the Liberals have created a regulatory environment so daunting that companies need a trump card to get anything done. That’s why the Major Projects Office (MPO) exists.

“The MPO will work to fast-track nation-building projects by streamlining regulatory assessment and approvals and helping to structure financing, in close partnership with provinces, territories, Indigenous Peoples and private investors,” explains a government press release.

Canadians must not be fooled. A better solution would be to create a regulatory and tax environment where these projects can meet market demand through private investment. We don’t have that in Canada, which is why money has fled the country and our GDP growth per capita is near zero.

Instead of this less politicized and more even-handed approach, the Liberals have found a way to make their cabinet the only gatekeepers able to usher someone past the impossible process they created. Then, having done so, they can brag about what “they” got done.

The Fraser Institute has called out this system for its potential to incentivize bribes and kickbacks. The Liberals have such a track record of handing out projects and even judicial positions to their friends that such scenarios become easier to believe. Innumerable business groups will be kissing up to the Liberals just to get anything major done.

The government has created the need for more of itself, and it is following up in every way it can. Already, the federal government has set up offices across Canada for people to apply for such projects. Really? Anyone with enough dollars to pursue a major project can fly to Ottawa to make their pitch.

No, this is as much about the show as it is about results—and probably much more. It is all too reminiscent of another big-sounding, mostly ineffective program the Liberal government rolled out in 2017. They announced a $950-million Innovation Superclusters Initiative “designed to help strengthen Canada’s most promising clusters … while positioning Canadian firms for global leadership.”

That program allowed any company in the world to participate, with winners getting matching dollars from taxpayers for their proposals. (But all for the good of Canada, we were told.) More than 50 applications were made for these sweepstakes, which included more than 1,000 businesses and 350 other participants. In Trudeau Liberal fashion, every applicant had to articulate how their proposal would increase female jobs and leadership and encourage diversity in the long term.

The entire process was like one big Dragon’s Den series. The Liberals trotted out a list of contestants full of nice-sounding possibilities, with maximum hype and minimal reality. Late in the process, Minister of Innovation, Science and Industry Navdeep Bains picked the nine finalists himself (all based in cities with a Liberal MP), from which five would be chosen.

The alleged premise was to leverage local and regional commercial clusters, but that soon proved ridiculous. The “Clean, Low-energy, Effective and Remediated Supercluster” purported to power clean growth in mining in Ontario, Quebec and Vancouver. Not to be outdone, the “Mobility Systems and Technologies for the 21st Century Supercluster” included all three of these locations, plus Atlantic Canada. They were only clustered by their tendency to vote Liberal.

Today, the MPO repeats this virtue-signalling, politicking, drawn-out, tax-dollar-spending drama. The Red Chris Mine expansion in northwest British Columbia is one of the proposals under consideration. It would be done in conjunction with the Indigenous Tahltan Nation and is supposed to reduce greenhouse gas emissions by 70 per cent. That’s right up the Liberal alley.

Meanwhile, the project is somehow part of a proposed Northwest Critical Conservation Corridor that would cordon off an area the size of Greece from development. Is this economic growth or economic prohibition? This approach is more like the United Nations’ Agenda 2030 than it is nation-building. And it is more like the World Economic Forum’s “stakeholder capitalism” approach than it is free enterprise.

At least there are two gems among the five proposals. One is to expand capacity at the Port of Montreal, and another is to expand the Canada LNG facility in Kitimat, B.C. Both have a market case and clear economic benefits.

Even here, Canadians must ask themselves, why must the government use a bulldozer to get past the red tape it created? Why not cut the tape for everyone? The Liberals deserve little credit for knocking down a door they barred themselves.

Lee Harding is a research fellow for the Frontier Centre for Public Policy.

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‘Taxation Without Representation’: Trump Admin Battles UN Over Global Carbon Tax

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From the Daily Caller News Foundation

By Melissa O’Rourke

The Trump administration is fighting to block a global carbon tax that a United Nations (UN) agency is attempting to pass quietly this week.

The International Maritime Organization (IMO), a UN body based in London, is meeting this week to adopt a so-called “Net-Zero Framework,” which would levy significant penalties on carbon dioxide emissions from ships that exceed certain limits. The Trump administration argues the proposal could raise global shipping costs by as much as 10%, ultimately driving up prices for American consumers.

“President Trump has made it clear that the United States will not accept any international environmental agreement that unduly or unfairly burdens the United States or harms the interests of the American people,” Secretary of State Marco Rubio, Secretary of Energy Chris Wright and Secretary of Transportation Sean Duffy said in a joint statement Friday.

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“The Administration unequivocally rejects this proposal before the IMO and will not tolerate any action that increases costs for our citizens, energy providers, shipping companies and their customers, or tourists,” the cabinet secretaries wrote.

The proposed tax is part of the IMO’s broader goal to bring global shipping to net-zero emissions “by or around” 2050. Qualifying ships that fall short of emissions targets would face taxes ranging from $100 to $380 per ton of CO2.

Notably, the tax would be paid directly by shipowners rather than governments.

The Net-Zero Framework could generate between $11 billion and $12 billion annually from 2028 through 2030, paid into a UN-controlled fund, according to University College London. Meanwhile, other estimates warn that if the global fleet misses the IMO’s targets by even 10%, the annual cost of emissions could climb to $20 to $30 billion by 2030 and potentially exceed $300 billion by 2035.

Some critics equated the proposal to “taxation without representation,” noting that an unelected committee would have the authority to set and potentially raise the tax.

The Trump administration is urging member states to reject the proposal and has threatened retaliatory measures against countries that support it. These include investigations into anti-competitive practices, visa restrictions for maritime crews, commercial and financial penalties, higher port fees for ships tied to those nations, and possible sanctions on officials promoting climate policies.

“The Trump administration is right to draw a hard line against the UN’s latest scheme to export its climate agenda through global taxes and trade barriers,” Jason Isaac, CEO of the American Energy Institute, told the Daily Caller News Foundation.

Isaac said the proposed carbon tax, along with other measures — including the EU’s Corporate Sustainability Reporting Directive, which requires companies to disclose environmental and social impacts — “represent an alarming attempt to impose costly, extraterritorial regulations on American businesses and consumers.”

“These measures threaten U.S. sovereignty, inflate energy and transport costs, and weaponize climate policy as a tool of economic coercion,” Isaac said. “The United States must not tolerate foreign governments using environmental pretexts to dictate how we trade, build, and move goods. President Trump’s firm stance puts American workers and energy security first, where they belong.”

Steve Milloy, senior fellow at the Energy & Environment Legal Institute, also commended the administration’s efforts to block the UN measure.

“Not only does [Trump] oppose the UN carbon tax, but he has instructed his administration to take action against nations that try to implement it against the U.S.,” Milloy told the DCNF. “I am simply in awe of his commitment to ending the international climate hoax, which has long been aimed at stealing from and otherwise crippling our country’s economy and national security.”

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