Paul Wells on PM Trudeau’s cabinet shake up

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Rechie Valdez teared up a bit taking her oath. It was nice.

Posted with permission from Substack author Paul Wells

I skipped almost the entire cabinet-shuffle business on Wednesday. I think I’ve mostly managed to avoid getting jaded in this job, but there are days, boy howdy. Welcome, Minister Blah Blah Blah to the crucial office of Provision, Preparedness, Children and Popular Song. Congratulations, hug your kids. Next.

Then here was Rechie Valdez’s voice catching as she took the oaths (one for entry into the Council of the Elders and the other to join the Resonant Circle of the One, or whatever) and for just a minute, boredom took a holiday. The people who do these jobs should be emotional about them. Optimism is a good thing. Small businesses are definitely on the list of things worth caring about. Go get ’em, minister.

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A foolish consistency is the hobgoblin of days like this. During the 2021 campaign, when things were going badly, the official line out of the Trudeau brain trust was that the prime minister “doesn’t do shakeups.” And yet here’s one now. What’s changed?

There are always two ready answers to such a question. For one, the world has changed, as it always does. Previous shuffles addressed the astonishing 2016 votes for Brexit and Trump, and the less epochal but still significant election of Doug Ford as Ontario premier in 2018. In late 2021, when Trudeau was randomly firing one of the most experienced ministers in his cabinet, it might still have been possible to believe the PM’s third term in office wouldn’t be dominated by Russia, China, and the knock-on effects from a sharp increase in immigration. The misplaced optimism of that bygone era 20 months ago can no longer be maintained.

Second, the electoral context has changed. “We have all the time in the world before the next election” has become “We sure don’t,” and the readers who get cross when I link to horse-race polls are going to hate clicking on this.

I guess this shuffle is designed to address the Poilievre threat? Kind of? Listlessly? A year ago Trudeau was already getting advice to make sharp, noticeable changes in his team, message and style. (Yes, I just linked to myself.) Today he put Sean Fraser in charge of Housing and Marc Miller in charge of Immigration. Those might be the two most encouraging moves among dozens, both for Liberals who hope “good communicators” won’t turn out to be a sad joke, and for citizens who hope strong administrators might, even if only occasionally, be put in charge of challenging files.

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The rest of the day’s news is puzzling. Seamus O’Regan to Labour? I thought the boss liked him. Pablo Rodriguez to Transport would seem to be yet another case of ministerial burnout on all those Web Giant-Killer bills that have become the torment of a succession of Heritage ministers. Pascale St.-Onge replaces him on the censorship ‘n’ subsidies beat, ringing a new variation on the eternal question: Why do they call it Canadian Heritage if only ministers from Quebec are allowed to do the job?

Gary Anandasangaree at Crown-Indigenous Relations and Arif Virani as Minister of Justice and Attorney-General are two cases of rookie ministers promoted to tough jobs. I’ve heard good things about both of them. Both have relevant committee and parliamentary-secretary experience. Virani was Jody Wilson-Raybould’s parliamentary secretary; she seems not to have kept many fond memories. (In her memoir she calls him one of the “talking heads” who were sent out “to make comments that evidence has now shown were not accurate or right.” In general, Trudeau, a non-lawyer mostly counselled by non-lawyers, seems to be chronically unsure why he should have a justice minister or what they are good for.)

Freeland, Guilbeault, Champagne and Joly remain in their previous jobs, evidence of their clout. On the other hand, I maintain that Rodriguez’s being shuffled was evidence of his clout. By now it’s clear that Freeland writes her own rules: she does the work she wants to do, to varying degrees of success, and nobody in this government can make her do anything else. Her fate is bound up with the prime minister’s. Probably neither of them expected it, but the stability of the tandem is now part of Trudeauworld’s game physics.

Cabinet shuffles defy confident prediction, or should. Will Jean-Yves Duclos make a difference as Public Services and Procurement Minister? He should. He’s a detail man in a detail job. But ministers are rarely better than they are permitted to be by circumstances and by the circle around the PM. Duclos will shine if this government wants to buy stuff, and not if it doesn’t.

That 2021 bit of campaign spin wasn’t entirely false. In some ways this prime minister really doesn’t do shakeups. He keeps his chief of staff, his indispensable deputy, his own way of thinking and talking about his government. Everything else swirls around. He came to office promising real change. Increasingly what’s real is what doesn’t change.

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Canada’s economic performance cratered after Ottawa pivoted to the ‘green’ economy

Published on October 31, 2025

Todayville

From the Fraser Institute

By Jason Clemens and Jake Fuss

There are ostensibly two approaches to economic growth from a government policy perspective. The first is to create the best environment possible for entrepreneurs, business owners and investors by ensuring effective government that only does what’s needed, maintains competitive taxes and reasonable regulations. It doesn’t try to pick winners and losers but rather introduces policies to create a positive environment for all businesses to succeed.

The alternative is for the government to take an active role in picking winners and losers through taxes, spending and regulations. The idea here is that a government can promote certain companies and industries (as part of a larger “industrial policy”) better than allowing the market—that is, individual entrepreneurs, businesses and investors—to make those decisions.

It’s never purely one or the other but governments tend to generally favour one approach. The Trudeau era represented a marked break from the consensus that existed for more than two decades prior. Trudeau’s Ottawa introduced a series of tax measures, spending initiatives and regulations to actively constrain the traditional energy sector while promoting what the government termed the “green” economy.

The scope and cost of the policies introduced to actively pick winners and losers is hard to imagine given its breadth. Direct spending on the “green” economy by the federal government increased from $600 million the year before Trudeau took office (2014/15) to $23.0 billion last year (2024/25).

Ottawa introduced regulations to make it harder to build traditional energy projects (Bill C-69), banned tankers carrying Canadian oil from the northwest coast of British Columbia (Bill C-48), proposed an emissions cap on the oil and gas sector, cancelled pipeline developments, mandated almost all new vehicles sold in Canada to be zero-emission by 2035, imposed new homebuilding regulations for energy efficiency, changed fuel standards, and the list goes on and on.

Despite the mountain of federal spending and regulations, which were augmented by additional spending and regulations by various provincial governments, the Canadian economy has not been transformed over the last decade, but we have suffered marked economic costs.

Consider the share of the total economy in 2014 linked with the “green” sector, a term used by Statistics Canada in its measurement of economic output, was 3.1 per cent. In 2023, the green economy represented 3.6 per cent of the Canadian economy, not even a full one-percentage point increase despite the spending and regulating.

And Ottawa’s initiatives did not deliver the green jobs promised. From 2014 to 2023, only 68,000 jobs were created in the entire green sector, and the sector now represents less than 2 per cent of total employment.

Canada’s economic performance cratered in line with this new approach to economic growth. Simply put, rather than delivering the promised prosperity, it delivered economic stagnation. Consider that Canadian living standards, as measured by per-person GDP, were lower as of the second quarter of 2025 compared to six years ago. In other words, we’re poorer today than we were six years ago. In contrast, U.S. per-person GDP grew by 11.0 per cent during the same period.

Median wages (midpoint where half of individuals earn more, and half earn less) in every Canadian province are now lower than comparable median wages in every U.S. state. Read that again—our richest provinces now have lower median wages than the poorest U.S. states.

A significant part of the explanation for Canada’s poor performance is the collapse of private business investment. Simply put, businesses didn’t invest much in Canada, particularly when compared to the United States, and this was all pre-Trump tariffs. Canada’s fundamentals and the general business environment were simply not conducive to private-sector investment.

These results stand in stark contrast to the prosperity enjoyed by Canadians during the Chrétien to Harper years when the focus wasn’t on Ottawa picking winners and losers but rather trying to establish the most competitive environment possible to attract and retain entrepreneurs, businesses, investors and high-skilled professionals. The policies that dominated this period are the antithesis of those in place now: balanced budgets, smaller but more effective government spending, lower and competitive taxes, and smart regulations.

As the Carney government prepares to present its first budget to the Canadian people, many questions remain about whether there will be a genuine break from the policies of the Trudeau government or whether it will simply be the same old same old but dressed up in new language and fancy terms. History clearly tells us that when governments try to pick winners and losers, the strategy doesn’t lead to prosperity but rather stagnation. Let’s all hope our new prime minister knows his history and has learned its lessons.

Jason Clemens

Executive Vice President, Fraser Institute

Jake Fuss

Director, Fiscal Studies, Fraser Institute

Business

Canadians paid $90 billion in government debt interest in 2024/25

Published on October 31, 2025

Todayville

From the Fraser Institute

By Jake Fuss, Tegan Hill and William Dunstan

Next week, the Carney government will table its long-awaited first budget. Earlier this year, Prime Minister Mark Carney launched a federal spending review to find $25 billion in savings by 2028. Even if the government meets this goal, it won’t be enough to eliminate the federal deficit—projected to reach as high as $92.2 billion in 2025/26—and start paying down debt. That means a substantial amount of taxpayer dollars will continue to flow towards federal debt interest payments, rather than programs and services or tax relief for Canadians.

When a government spends more than it raises in revenue and runs a budget deficit, it accumulates debt. As of 2024/25, the federal and provincial governments will have accumulated a total projected $2.3 trillion in combined net debt (total debt minus financial assets).

Of course, like households, governments must pay interest on their debt. According to our recent study, the provinces and federal government expect to spend a combined $92.5 billion on debt interest payments in 2024/25.

And like any government spending, taxpayers fund these debt interest payments. The difference is that instead of funding important programs, such as health care, these taxpayer dollars will finance government debt. This is the cost of deficit spending.

How much do Canadians pay each year in government debt interest costs? On a per-person basis, combined provincial and federal debt interest costs in 2024/25 are expected to range from $1,937 in Alberta to $3,432 in Newfoundland and Labrador. These figures represent provincial debt interest costs, plus the federal portion allocated to each province based on a five-year average (2020-2024) of their share of Canada’s population.

For perspective, it’s helpful to compare debt interest payments to other budget items. For instance, the federal government estimates that in 2024/25 it will spend more on debt interest costs ($53.8 billion) than on child-care benefits ($35.1 billion) or the Canada Health Transfer ($52.1 billion), which supports provincial health-care systems.

Provincial governments too spend more money on interest payments than on large programs. For example, in 2024/25, Ontario expects to spend more on debt interest payments ($15.2 billion) than on post-secondary education ($14.2 billion). That same year, British Columbia expects to spend more on debt interest payments ($4.4 billion) than on child welfare ($4.3 billion).

Unlike other forms of spending, governments cannot simply decide to spend less on debt interest payments in a given year. To lower their debt interest payments, governments must rein in spending and eliminate deficits so they can start to pay down debt.

Unfortunately, most governments in Canada are doing the opposite. All but one province (Saskatchewan) plans to run a deficit in 2025/26 while the federal deficit could exceed $90 billion.

To stop racking up debt, governments must balance their budgets. By spending less today, governments can ensure that a larger share of tax dollars go towards programs or tax relief to benefit Canadians rather than simply financing government debt.