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New PBO report underscores need for serious fiscal reform in Ottawa

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1 day ago

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From the Fraser Institute

By Jake Fuss and Grady Munro

The PBO expects total federal debt to reach $2.9 trillion by 2029/30—roughly equivalent to 80 per cent of the entire Canadian economy in that year.

Ahead of this year’s long-awaited federal budget—Prime Minister Carney’s first at the helm—a new report paints a picture of what we might expect federal finances to look like. The picture is not pretty, and the numbers underscore the serious need for the government to change course immediately.

The new report comes from the independent Parliamentary Budgetary Officer (PBO)—Ottawa’s fiscal watchdog. While the PBO’s outlook offers some general insight as to what we can expect from the upcoming November 4 budget, we shouldn’t hang our hat on the exact estimates. Excluded from the report are major new measures including the Carney government’s pledge to raise military spending to 5 per cent of GDP by 2035, the government’s spending review, and the launch of “Build Canada Homes.”

However, the report demonstrates a clear need for serious fiscal reform.

First and foremost, the PBO projects dramatically higher annual budget deficits than were previously projected in last year’s fall economic statement—the last official government fiscal update—which already included a concerning forecast for federal finances. Budget deficits arise when the government spends more than it raises in revenues during the year, and must borrow money to make up the difference. Previously, the government planned to borrow a combined $202.7 billion over the six years from 2024/25 to 2029/30. Now, the PBO estimates combined federal deficits will reach $366.2 billion over that same period.

Put differently, for the six years from 2024/25 to 2029/30, the average deficit is expected to be $61.0 billion—nearly four times the six-year average of $15.8 billion the government ran before the pandemic.

According to the PBO, this $163.5 billion increase in combined federal deficits is driven by the effects of lower expected revenues, alongside higher expected spending on both government programs and debt interest payments. There are many reasons underlying these changes including the economic impact of U.S. tariffs, increased defence spending to reach 2 per cent of GDP, and the federal personal income tax cut. But this represents an alarming plunge deeper into the red.

The primary consequence of deficits is an increase in the mountain of debt held by the government. Previously, total federal debt was expected to rise from $2.1 trillion in 2023/24—a big number after a substantial run-up in debt from the previous decade—to $2.6 trillion by 2029/30. Now, the PBO expects total federal debt to reach $2.9 trillion by 2029/30—roughly equivalent to 80 per cent of the entire Canadian economy in that year.

Government borrowing and debt costs fall squarely on the backs of Canadians. For instance, similar to a family with a mortgage, the government must pay interest on its debt. As the government continues to accumulate more and more debt, all else equal, the amount it spends on interest will also rise. And each taxpayer dollar spent on interest is a dollar diverted from government programs or potential tax relief for Canadians.

Rising government debt also acts as a drag on the overall economy. Both the government and the private sector compete for scarce resources and it becomes more expensive for everyone to borrow money. Therefore, those in the private sector can be discouraged from borrowing money to invest into Canadian businesses.

New projections on the state of federal finances paint a dire picture of huge deficits and massive debt accumulation. The Carney government should implement major fiscal reform to avoid this future.

Jake Fuss

Director, Fiscal Studies, Fraser Institute

Grady Munro

Policy Analyst, Fraser Institute
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Alberta

Taxpayers: Alberta must scrap its industrial carbon tax

Published on October 1, 2025

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  • Alberta must block Carney’s industrial carbon tax

The Canadian Taxpayers Federation is calling on the government of Alberta to completely scrap its provincial industrial carbon tax.

“It’s baffling that Alberta is still clinging to its industrial carbon tax even though Saskatchewan has declared itself to be a carbon tax-free zone,” said Kris Sims, CTF Alberta Director. “Prime Minister Mark Carney is cooking up his new industrial carbon tax in Ottawa and Alberta needs to fight that head on.

“Alberta having its own industrial carbon tax invites Carney to barge through our door with his punishing industrial carbon tax.”

On Sept. 16, the Alberta government announced some changes to Alberta’s industrial carbon tax, but the tax remains in effect.

On Friday night at the Global Progress Action Summitt held in London, England, Carney praised carbon taxes while speaking onstage with British Prime Minister Keir Starmer.

“The direct carbon tax which had become a divisive issue, it was a textbook good policy, but a divisive issue,” Carney said.

During the federal election, Carney promised to remove the more visible consumer carbon tax and change it into a bigger hidden industrial carbon tax. He also announced plans to create “border adjustment mechanisms” on imports from countries that do not have national carbon taxes, also known as carbon tax tariffs.

“Carney’s ‘textbook good policy’ comments about carbon taxes shows his government is still cooking up a new industrial carbon tax and it’s also planning on imposing carbon tax tariffs,” Sims said. “Alberta should stand with Saskatchewan and obliterate all carbon taxes in our province, otherwise we are opening the door for Ottawa to keep kicking us.”

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Business

Elon Musk announces ‘Grokipedia’ project after Tucker Carlson highlights Wikipedia bias

Published on October 1, 2025

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Wikipedia co-founder Larry Sanger explained how Wikipedia systematically blacklists and “deprecates” conservative sources. Wikipedia remains one of the most heavily used information sources online and is integrated with Google search results.

Elon Musk has announced plans to build “Grokipedia,” a new open-source online encyclopedia under his artificial intelligence company xAI.

“Will be a massive improvement over Wikipedia,” Musk wrote on X. “Frankly, it is a necessary step towards the xAI goal of understanding the Universe.”

We are building Grokipedia @xAI.

Will be a massive improvement over Wikipedia.

Frankly, it is a necessary step towards the xAI goal of understanding the Universe. https://t.co/xvSeWkpALy

— Elon Musk (@elonmusk) September 30, 2025

The announcement came days after Tucker Carlson’s interview with Larry Sanger, a co-founder of Wikipedia and a vocal critic of the organization since his departure in 2002.

Sanger explained how Wikipedia systematically blacklists and “deprecates” conservative sources. Seeing LifeSiteNews on the list, Carlson said that the platform has become “a weapon of ideological, theological war.”

Musk echoed Sanger’s criticisms, affirming Judicial Watch president Tom Fitton’s claim that “Wikipedia is a smear machine for the Left.”

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— Elon Musk (@elonmusk) September 30, 2025

Musk later amplified memes promoting Grokipedia, calling it “an open source knowledge repository that is vastly better than Wikipedia.”

Join @xAI and help build Grokipedia, an open source knowledge repository that is vastly better than Wikipedia!

This will be available to the public with no limits on use. https://t.co/3CnfrvNIpI

— Elon Musk (@elonmusk) September 30, 2025

He also affirmed Sanger’s “Nine Theses,” which call for dismantling Wikipedia’s centralized editorial control.

Some good suggestions from the co-founder of Wikipedia https://t.co/bgwBmi6uXN

— Elon Musk (@elonmusk) September 30, 2025

Musk has not released technical details of the Grokipedia project but said that Grok AI will be independent of Wikipedia “by the end of the year.”

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Wikipedia remains one of the most heavily used information sources online and is integrated with Google search results. Critics argue that its governance model allows biased editors – described as “ideologically-driven thought police” – to shape content and suppress dissenting viewpoints, particularly on political, cultural, and religious topics.

A similar initiative called “Infogalactic” was launched in 2016. A “fork” of Wikipedia, it was designed to decentralize control and allow multiple perspectives. While Infogalactic never reached Wikipedia’s scale, it established a model for alternative knowledge repositories.

Attracting a critical mass of editors and establishing credibility remain significant challenges facing such alternatives. Musk’s involvement signals a higher-profile challenge to Wikipedia’s dominance, combining xAI’s technological resources with his public platform on X.

Musk has not provided a clear timeline, but the announcement positions xAI to mount a direct challenge to Wikipedia’s dominance of the information ecosystem.

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