From the Frontier Centre for Public Policy

By Marco Navarro-Genie

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).

From the Fraser Institute

By Ben Eisen and Milagros Palacios

Recently, Statistics Canada released a revision of its calculations of Canada’s gross domestic product (GDP) in recent years. GDP measures the total production in an economy in a given year, and per-person GDP is widely accepted by economists as one of the most useful metrics for assessing quality of life. The new estimate places Canada’s GDP for 2024 at 1.4 per cent larger than previously reported.

By the standards of these sorts of revisions—which are usually quite small—the recent update is significant. But make no mistake, the new numbers do not change the fundamental story of Canada’s economic performance, which has been one of historically weak growth and stagnant living standards for an unusually long stretch of time.

Let’s get into the numbers (all adjusted for inflation, in 2017 dollars) with some historical perspective. The new figures put Canada’s per-person GDP estimate for 2024 at $59,529. By comparison, in 2019 per-person GDP was slightly higher at $59,581. This means there has been no progress at all in Canadian living standards as measured by per-person GDP over the past five years. Even with the revision, five years of flat living standards is an extraordinary result.

This is historically anomalous. From 2000 to 2018—a period that was itself not especially strong by the standards of earlier decades—per-person GDP still grew at a compounded annual rate of just under one per cent. In the 1990s, growth was faster still at roughly 1.8 per cent annually. In both periods, living standards were rising meaningfully, even if the pace varied. The fact that they have completely stagnated for five years is alarming, even if our GDP numbers aren’t quite as bleak as we believed a few weeks ago.

Some pundits determined to view all economic data through a political lens have emphasized that under the new revisions, the overall rate of per-person growth during Justin Trudeau’s time as prime minister is now approximately the same as what occurred during Stephen Harper’s tenure.

However, this is more relevant as a political talking point than an economic insight. The historical data show that at an average annual growth rate of just 0.5 per cent, the Canadian economy’s performance under Harper was weak by long-term standards. This is something that Trudeau himself recognized when he first sought high office, criticizing the Harper government for “having the worst record on economic growth since R.B. Bennett in the depths of the Great Depression.”

Trudeau was right back then that Canadian economic growth during the Harper era was historically weak. As such, a revision showing that Canada’s slow growth has approximately continued for the past decade is hardly cause for celebration. It simply underscores that both governments presided over a long period of weak productivity growth and very slow improvements in living standards—and that in recent years even that sluggish growth has given way to complete stagnation.

Of course, an upward revision to recent GDP calculations is welcome news, but it must not be allowed to distract policymakers or the public from the reality of Canada’s severe long-term growth problem, which in recent years has gone from bad to worse.