Business
Ottawa’s avalanche of spending hasn’t helped First Nations
From the Fraser Institute
By Tom Flanagan
When Justin Trudeau came to power in 2015, he memorably said that the welfare of Indigenous Canadians was his highest priority. He certainly has delivered on his promise, at least in terms of shovelling out money.
During his 10 years in office, budgeted Indigenous spending has approximately tripled, from about $11 billion to almost $33 billion. Prime Minister Trudeau’s instruction to the Department of Justice to negotiate rather than litigate class actions has resulted in paying tens of billions of dollars to Indigenous claimants over alleged wrongs in education and other social services. And his government has settled specific claims—alleged violations of treaty terms or of the Indian Act—at four times the previous rate, resulting in the award of at least an additional $10 billion to First Nations government.
But has this avalanche of money really helped First Nations people living on reserves, who are the poorest segment of Canadian society?
One indicator suggests the answer is yes. The gap between reserves and other communities—as measured by the Community Well-Being Index (CWB), a composite of income, employment, housing and education—fell from 19 to 16 points from 2016 to 2021. But closer analysis shows that the reduction in the gap, although real, cannot be due to the additional spending described above.
The gain in First Nations CWB is due mainly to an increase in the income component of the CWB. But almost all of the federal spending on First Nations, class-action settlements and specific claims do not provide taxable income to First Nations people. Rather, the increase in income documented by the CWB comes from the greatly increased payments legislated by the Liberals in the form of the Canada Child Benefit (CCB). First Nations people have a higher birth rate than other Canadians, so they have more children and receive more (on average) from the Canada Child Benefit. Also, they have lower income on average than other Canadians, so the value of the CCB is higher than comparable non-Indigenous families. The result? A gain in income relative to other Canadians, and thus a narrowing of the CWB gap between First Nations and other communities.
There’s an important lesson here. Tens of billions in additional budgetary spending and legal settlements did not move the needle. What did lead to a measurable improvement was legislation creating financial benefits for all eligible Canadian families with children regardless of race. Racially inspired policies are terrible for many reasons, especially because they rarely achieve their goals in practise. If we want to improve life for First Nations people, we should increase opportunities for Canadians of all racial backgrounds and not enact racially targeted policies.
Moreover, racial policies are also fraught with unintended consequences. In this case, the flood of federal money has made First Nations more dependent rather than less dependent on government. In fact, from 2018 to 2022, “Own Source Revenue” (business earnings plus property taxes and fees) among First Nations bands increased—but not as much as transfers from government. The result? Greater dependency on government transfers.
This finding is not just a statistical oddity. Previous research has shown that First Nations who are relatively less dependent on government transfers tend to achieve higher living standards (again, as measured by the CWB index). Thus, the increase in dependency presided over by the Trudeau government does not augur well for the future.
One qualification: this finding is not as robust as I would like because the number of band governments filing reports on their finances has drastically declined. Of 630 First Nation governments, only 260 filed audited statements for fiscal 2022. All First Nations are theoretically obliged by the First Nations Financial Transparency Act, 2013, to publish such statements, but the Trudeau government announced there would be no penalties for non-compliance, leading to a precipitous decline in reporting.
This is a shame, because First Nations, as they often insist, are governments, not private organizations. And like other governments, they should make their affairs visible to the public. Also, most of their income comes from Canadian taxpayers. Both band members and other Canadians have a right to know how much money they receive, how it’s being spent and whether it’s achieving its intended goals.
Author:
From the Daily Caller News Foundation
I’ve written frequently here in recent years about the financial fiasco that has hit Ford Motor Company and other big U.S. carmakers who made the fateful decision to go in whole hog in 2021 to feed at the federal subsidy trough wrought on the U.S. economy by the Joe Biden autopen presidency. It was crony capitalism writ large, federal rent seeking on the grandest scale in U.S. history, and only now are the chickens coming home to roost.
Ford announced on Monday that it will be forced to take $19.5 billion in special charges as its management team embarks on a corporate reorganization in a desperate attempt to unwind the financial carnage caused by its failed strategies and investments in the electric vehicles space since 2022.
Cancelled is the Ford F-150 Lightning, the full-size electric pickup that few could afford and fewer wanted to buy, along with planned introductions of a second pricey pickup and fully electric vans and commercial vehicles. Ford will apparently keep making its costly Mustang Mach-E EV while adjusting the car’s features and price to try to make it more competitive. There will be a shift to making more hybrid models and introducing new lines of cheaper EVs and what the company calls “extended range electric vehicles,” or EREVs, which attach a gas-fueled generator to recharge the EV batteries while the car is being driven.
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“The $50k, $60k, $70k EVs just weren’t selling; We’re following customers to where the market is,” Farley said. “We’re going to build up our whole lineup of hybrids. It’s gonna be better for the company’s profitability, shareholders and a lot of new American jobs. These really expensive $70k electric trucks, as much as I love the product, they didn’t make sense. But an EREV that goes 700 miles on a tank of gas, for 90% of the time is all-electric, that EREV is a better solution for a Lightning than the current all-electric Lightning.”
It all makes sense to Mr. Farley, but one wonders how much longer the company’s investors will tolerate his presence atop the corporate management pyramid if the company’s financial fortunes don’t turn around fast.
To Ford’s and Farley’s credit, the company has, unlike some of its competitors (GM, for example), been quite transparent in publicly revealing the massive losses it has accumulated in its EV projects since 2022. The company has reported its EV enterprise as a separate business unit called Model-E on its financial filings, enabling everyone to witness its somewhat amazing escalating EV-related losses since 2022:
• 2022 – Net loss of $2.2 billion
• 2023 – Net loss of $4.7 billion
• 2024 – Net loss of $5.1 billion
Add in the company’s $3.6 billion in losses recorded across the first three quarters of 2025, and you arrive at a total of $15.6 billion net losses on EV-related projects and processes in less than four calendar years. Add to that the financial carnage detailed in Monday’s announcement and the damage from the company’s financial electric boogaloo escalates to well above $30 billion with Q4 2025’s damage still to be added to the total.
Ford and Farley have benefited from the fact that the company’s lineup of gas-and-diesel powered cars have remained strongly profitable, resulting in overall corporate profits each year despite the huge EV-related losses. It is also fair to point out that all car companies were under heavy pressure from the Biden government to either produce battery electric vehicles or be penalized by onerous federal regulations.
Now, with the Trump administration rescinding Biden’s harsh mandates and canceling the absurdly unattainable fleet mileage requirements, Ford and other companies will be free to make cars Americans actually want to buy. Better late than never, as they say, but the financial fallout from it all is likely just beginning to be made public.
- David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.
From the Frontier Centre for Public Policy
New script, same budget playbook. Nothing in the Carney budget breaks from the Trudeau years
Prime Minister Mark Carney’s first budget talks reform but delivers the same failed spending habits that defined the Trudeau years.
While speaking in the language of productivity, infrastructure and capital formation, the diction of grown-up economics, it still follows the same spending path that has driven federal budgets for years. The message sounds new, but the behaviour is unchanged.
Time will tell, to be fair, but it feels like more rhetoric, and we have seen this rhetoric lead to nothing before.
The government insists it has found a new path, one where public investment leads private growth. That sounds bold. However, it is more a rebranding than a reform. It is a shift in vocabulary, not in discipline. The government’s assumptions demand trust, not proof, and the budget offers little of the latter.
Former prime ministers Jean Chrétien and Paul Martin did not flirt with restraint; they executed it. Their budget cuts were deep, restored credibility, and revived Canada’s fiscal health when it was most needed. Ottawa shrank so the country could grow. Budget 2025 tries to invoke their spirit but not their actions. The contrast shows how far this budget falls short of real reform.
Former prime minister Stephen Harper, by contrast, treated balanced budgets as policy and principle. Even during the global financial crisis, his government used stimulus as a bridge, not a way of life. It cut taxes widely and consistently, limited public service growth and placed the long-term burden on restraint rather than rhetoric. Carney’s budget nods toward Harper’s focus on productivity and capital assets, yet it rejects the tax relief and spending controls that made his budgets coherent.
Then there is Justin Trudeau, the high tide of redistribution, vacuous identity politics and deficit-as-virtue posturing. Ottawa expanded into an ideological planner for everything, including housing, climate, childcare, inclusion portfolios and every new identity category.
The federal government’s latest budget is the first hint of retreat from that style. The identity program fireworks are dimmer, though they have not disappeared. The social policy boosterism is quieter. Perhaps fiscal gravity has begun to whisper in the prime minister’s ear.
However, one cannot confuse tone for transformation.
Spending still rises at a pace the government cannot justify. Deficits have grown. The new fiscal anchor, which measures only day-to-day spending and omits capital projects and interest costs, allows Ottawa to present a balanced budget while still adding to the deficit. The budget relies on the hopeful assumption that Ottawa’s capital spending will attract private investment on a scale economists politely describe as ambitious.
The housing file illustrates the contradiction. New funding for the construction of purpose-built rentals and a larger federal role in modular and subsidized housing builds announced in the budget is presented as a productivity measure, yet continues the Trudeau-era instinct to centralize housing policy rather than fix the levers that matter. Permitting delays, zoning rigidity, municipal approvals and labour shortages continue to slow actual construction. These barriers fall under provincial and municipal control, meaning federal spending cannot accelerate construction unless those governments change their rules. The example shows how federal spending avoids the real obstacles to growth.
Defence spending tells the same story. Budget 2025 offers incremental funding and some procurement gestures, but it avoids the core problem: Canada’s procurement system is broken. Delays stretch across decades. Projects become obsolete before contracts are signed. The system cannot buy a ship, an aircraft or an armoured vehicle without cost overruns and missed timelines. The money flows, but the forces do not get the equipment they need.
Most importantly, the structural problems remain untouched: no regulatory reform for major projects, no tax-competitiveness agenda and no strategy for shrinking a federal bureaucracy that has grown faster than the economy it governs. Ottawa presides over a low-productivity country but insists that a new accounting framework will solve what decades of overregulation and policy clutter have created. The budget avoids the hard decisions that make countries more productive.
From an Alberta vantage, the pivot is welcome but inadequate. The economy that pays for Confederation receives more rhetorical respect, yet the same regulatory thicket that blocks pipelines and mines remains intact. The government praises capital formation but still undermines the key sectors that generate it.
Budget 2025 tries to walk like Chrétien and talk like Harper while spending like Trudeau. That is not a transformation. It is a costume change. The country needed a budget that prioritized growth rooted in tangible assets and real productivity. What it got instead is a rhetorical turn without the courage to cut, streamline or reform.
Canada does not require a new budgeting vocabulary. It requires a government willing to govern in the country’s best interests.
Marco Navarro-Genie is vice-president of research at the Frontier Centre for Public Policy and co-author with Barry Cooper of Canada’s COVID: The Story of a Pandemic Moral Panic (2023).
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