It’s time for an honest conversation about the costs of new federal programs

The Trudeau government will table its next budget on April 16, and with the government’s push on the initial steps of national pharmacare, it’s important to remember there’s a cost Canadians must pay for new and expanded government services.

In March, the Trudeau government and the NDP reached an agreement to introduce the first steps of a national pharmacare program that will initially cover diabetes drugs and contraceptives, but may eventually grow to cover far more. This marks the third major national social program introduced by the Trudeau government in recent years, accompanying the $10-a-day daycare and national dental care programs promised in Budget 2022.

These policies represent an approach by the federal government to expand its role in the funding and provision of social services—an approach which has support among Canadians. Polling data from 2022, which sought to understand Canadian views on new spending programs, revealed the majority of respondents supported $10-a-day daycare (69 per cent), pharmacare (79 per cent) and dental care (72 per cent)—when there were no costs attached.

The Trudeau government has chosen to fund these new programs primarily using debt. Through planned deficits and rising debt interest costs for the foreseeable future, Ottawa is shifting much of the burden of paying for today’s services onto future generations of Canadians. Put differently, the new services are not free, and must ultimately be paid for through higher taxes in the future because debt comes with costs.

It’s therefore informative to look at what happens to the popularity of these programs when the true costs are communicated to Canadians. Polling data clearly shows these new programs lose considerable support when linked to a direct cost in the form of an increase in the federal goods and services tax (GST). Indeed, support for government-funded pharmacare, dental care and daycare plummeted to well below 50 per cent of respondents if the services are paid for by increased taxes.

This is the key difference between Canada and countries such as Sweden or Denmark, which are often used as examples of countries that maintain expansive social services and income supports. These countries have gone much further than Canada regarding government provision of services, but have paid for it through corresponding tax increases applied to individuals and families today rather than through borrowed money. Moreover, the tax burden falls primarily on the middle class, which utilizes these services the most, as opposed to concentrating tax hikes on top income earners.

For example, Swedes earning more than US$62,000 per year face the country’s top marginal personal income tax rate of 52.3 per cent. In comparison, although Canada’s top marginal rate (53.5 per cent) is roughly the same level as Sweden’s, it doesn’t kick in until earnings of nearly US$177,000. Moreover, both Sweden and Denmark maintain a national sales tax rate of 25 per cent, while Canadians face sales taxes ranging from 5 per cent to 15 per cent (depending on the province). Simply put, the Nordic countries fund expansive government through high taxes on their citizens.

To put the cost of national dental care, day care and the first steps of pharmacare in context, an increase in the GST to 6 per cent from its current 5 per cent would be insufficient to pay for an estimated annual cost of at least $13 billion on these programs.

In recent years, the Trudeau government has introduced substantial social services without the corresponding tax increases required to pay for them. But increased federal spending will require higher taxes for families either today or in the future, and Canadians must remember this when deciding if they truly want these new programs.

Authors:

Jake Fuss and Grady Munro

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Michigan could be a winner as companies pull back from EVs

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Automotive

Michigan could be a winner as companies pull back from EVs

Published on September 16, 2025

Todayville

From The Center Square

By Elyse S. Apel

Federal deregulation and tax credit cuts are reshaping the auto industry, as Ford Motor Co. and General Motors Co. scale back electric vehicle production and redirect billions into hybrids and traditional gas-powered cars.

Yet, the Michigan automotive industry could see increased investments from those same companies as they reallocate that funding.

While both Ford and GM previously announced ambitious targets to expand electric vehicle fleets over the next decade, they are now cutting back on electric vehicle production.

That comes in response to federal deregulation of gas-powered vehicles, tax credit cuts, and the prospect of slowing consumer demand.

In August, Ford stated it was canceling plans to build a new electric three-row SUV. Instead, it is turning its focus to hybrid vehicles, including a massive $5 billon investment into a new “affordable” hybrid truck.

GM announced similar plans earlier this month. It will be cutting back electric vehicle production at Kansas and Tennessee plants, anticipating a decline in demand once federal tax credits end Sept. 30.

This all could have a real impact on the electric vehicle industry across the nation and experts are already anticipating that.

A new forecast by Ernst & Young Global Limited now predicts a five-year delay in electric vehicles making up 50% of the new car marketshare. While previous forecasts predicted America would reach that mark by 2034, the new forecast pushed that back to 2039.

“The U.S. faces policy uncertainty, high costs, and infrastructure gaps,” said Constantin M. Gall, the company’s global aerospace defense and mobility leader.

Clean energy advocacy groups are decrying this move away from electric vehicle initiatives, largely blaming the Trump administration.

“The transition to electric vehicles now faces significant roadblocks,” said Ecology Center in an April report. “The Trump administration has rolled back key policies supporting clean transportation.”

It also pointed to a nationwide deregulation of the gas-powered vehicle industry for allowing those to remain “dominant” over electric vehicles.

“These actions prioritize fossil fuels over clean energy, threatening progress toward a sustainable transportation future,” the report stated.

While bad news for electric vehicle supporters, the Michigan automotive industry could be a winner as companies re-shift focus back to gas-powered and hybrid vehicles.

With billions of dollars previously allocated to federal pollution fines and electric vehicle costs now available for investment, GM now plans to increase production at a Detroit-area plant by 2027.

The Michigan-based company also recently announced plans to invest billions into another Michigan plant in Lake Orion Township.

For similar reasons, Ford’s CEO Jim Farley told analysts that the company anticipates monetary savings “has the potential to unlock a multibillion-dollar opportunity over the next two years.”

While Gov. Gretchen Whitmer has long been a proponent for the electric vehicle industry, she did recently emphasize her support for all Michigan-based manufacturing, no matter the type.

“We don’t care what you drive – gas, diesel, hybrid, or electric – as long as it’s made in Michigan,” she said following the GM Orion announcement. “Together, let’s keep bringing manufacturing home, growing the middle class, and making more stuff in Michigan.”

Elyse Apel is a reporter for The Center Square covering Colorado and Michigan. A graduate of Hillsdale College, Elyse’s writing has been published in a wide variety of national publications from the Washington Examiner to The American Spectator and The Daily Wire.

Elyse S. Apel

Business

Deportations causing delays in US construction industry

Published on September 16, 2025

Todayville

From The Center Square

By Andrew Rice

The Trump administration’s immigration policies are leading to worker shortages and delayed projects across the construction industry, according to a new report.

A survey conducted in July and August by the Associated Contractors of America and the National Center for Construction Education and Research found more than one in four respondents said their firms were affected by increased immigration enforcement in the past six months.

Respondents said increased immigration enforcement is making it more difficult for firms to recruit workers. Ten percent of firms reported using the H-2B visa program, which is used for recruiting nonagricultural foreign workers, to recruit salaried and hourly workers.

Congress set the cap for H-2B visa allowances at 66,000 in fiscal year 2026. The program offers temporary work for the first and second halves of the year to foreign employees.

Jordan Fischetti, an immigration policy fellow with Americans for Prosperity, said government allowances for visa programs do not meet the demand of the current workforce.

“Immigration for a long time has been centrally planned, so there’s just not a very strong appetite for letting the market do its work,” Fischetti said.

The report found 83% of firms with craft worker openings reported that positions are hard to fill or harder to fill than one year ago. Eighty-four percent of firms with openings for salaried workers also reported it was hard or harder to fill positions than one year ago.

Five percent of respondents reported their jobsites or work sites were visited by immigration agents and 10% said workers did not report or quit due to rumored immigration enforcement allegations.

Contractors in Georgia, Virginia, Alabama, Nebraska and South Carolina were more likely to be impacted by immigration enforcement, according to the report.

The report found worker shortages were the most commonly listed reason for project delays. Two-thirds of firms reported at least one project in the last six months was postponed, canceled or scaled back. The survey took into account more than 1,300 individuals across various contracting and construction firms.

Michele Waslin, assistant director of the University of Minnesota’s immigration history research center, said the construction and agricultural industries have been deeply affected by the Trump administration’s immigration policies.

“Some businesses really do have a labor shortage, and they’re unable to hire American workers, and they want to hire foreign workers and it’s not that easy to do in many cases,” Waslin said.

A separate poll commissioned by The Center Square found 85% of registered voters think it is either somewhat or very important to create legal pathways for construction workers to live and work in the United States.

The poll, conducted by RMG Research in conjunction with Neapolitan News Service, surveyed 1,000 registered voters in August and found vast agreement across partisan lines, age and race in its support for legal pathways in construction.

Fischetti said both employers and the American public have expressed interest in allowing more flexibility in the immigration system and he wants to see Congress modernize in response.

“We really need to work on providing pathways,” Fischetti said. “I don’t just mean pathways to legalization, pathways to certainty.”