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The Good, the Bad and the Ugly—government budgets in 2024

Published

1 year ago

6 minute read

From the Fraser Institute

By Grady Munro and Jake Fuss

Research showed the federal government could balance its budget in two years by slowing spending growth, yet instead the government doubled down and increased spending well past its previous estimates (against the wishes of Canadians)

This fiscal year, most provinces (and the federal government) demonstrated irresponsible fiscal management, although some were better than others. Therefore, in the words of the 1966 film starring Clint Eastwood, let’s discuss The Good, the Bad and the Ugly of Canadian government budgets in 2024.

Falling in the “good” category are Alberta and New Brunswick—the only two provinces planning to run a balanced budget in 2024/25, with Alberta forecasting a $367 million surplus and New Brunswick forecasting a $41 million surplus. Both provinces forecast surpluses until at least 2026/27, and expect net debt (total debt minus financial assets) as a share of the economy to decline in the years to come. However, what keeps these provinces from having a great budget is that both chose to further increase spending in the face of higher revenues, while failing to deliver much-needed tax relief.

Alberta in particular remains at risk of seeing future surpluses disappear, as the province relies on historically high resource revenues to fund its high spending. Should these volatile revenues decline, the province would return to operating at a deficit and growing its debt burden.

Provinces in the “bad” category include, but aren’t limited to, Saskatchewan and Newfoundland and Labrador. Largely due to quick growth in program spending that wipes out any revenue gains, both provinces expect deficits in 2023/24 and 2024/25 before planning to balance their budgets in 2025/26. The risks of unchecked spending growth are most salient in Saskatchewan, where just one year ago the province projected surpluses in both 2023/24 and 2024/25. And resulting from many years of deficits and debt accumulation, debt interest costs in Newfoundland and Labrador are expected to reach $2,123 per person in 2024/25, the highest in Canada.

Key governments among the “ugly” are the federal government, Ontario and British Columbia. Let’s take them one by one.

The federal government delivered a budget that continues the same failed approach that’s produced nearly a decade of stagnation in Canadian living standards. The Trudeau government plans to run a $39.8 billion deficit in 2024/25, followed by deficits of $20.0 billion or higher until at least 2028/29. Prior to the budget, research showed the federal government could balance its budget in two years by slowing spending growth, yet instead the government doubled down and increased spending well past its previous estimates (against the wishes of Canadians).

In addition to continuous spending increases and debt accumulation, the Trudeau government increased capital gains taxes on all businesses and many Canadians. Presented as a way to make the tax system more “fair” while generating $20 billion in revenue, in reality it is a harmful tax increase that is unlikely to generate the planned amount of revenues while simultaneously hindering economic growth and prosperity.

Similar to the federal government, in its 2024 budget Ontario’s Ford government simply doubled down on the same approach it’s taken in previous years. This “stay the course” fiscal plan added an average of $3.8 billion in new annual program spending (compared to last year’s budget) over the three years from 2023/24 to 2025/26. This new spending delays the province’s expected return to surpluses until 2026/27, and rather than run a $200 million surplus in 2024/25 the Ford government now plans to run a $9.8 billion deficit.

Importantly, the Ford government failed to deliver any meaningful tax relief for Ontarians in this budget, which once again breaks its promise to reduce personal income tax rates. Given that Ontarians face some of the highest personal income tax rates in North America, relief would help keep money in people’s pockets while also promoting economic growth.

Finally, the Eby government in B.C. tabled a budget that can be best described as a generational error in terms of the planned debt accumulation. The government plans to run a $7.9 billion deficit in 2024/25, followed by deficits of $7.8 billion and $6.4 billion in 2025/26 and 2026/27, respectively. In other words, the Eby government plans to run deficits in the coming years that are nearly as large or larger than those expected in Ontario, despite B.C. having a little over one-third of Ontario’s population.

Runaway spending drives these deficits and will contribute to a $55.1 billion (74.7 per cent) increase in provincial net debt from 2023/24 to 2026/27. This massive runup in debt will result in higher debt interest costs, which leaves less money available for services such as healthcare and education, or pro-growth tax relief for British Columbians.

By and large, governments across Canada demonstrated an irresponsible approach to managing public finances in this year’s round of budgets. While there were a couple of bright spots, the majority of provinces instead chose to increase spending, grow deficits and debt, and introduce little to no meaningful tax relief.

Authors:

Grady Munro and Jake Fuss
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Trump on Canada tariff deadline: ‘We can do whatever we want’

Published on June 29, 2025

By

From The Center Square

By 

President Donald Trump appears unconcerned about an upcoming tariff deal deadline after abruptly ending all trade talks with Canada as his bid to overhaul world trade continues.

Trump is nearing the end of a self-imposed 90-day deadline to strike deals with nearly every U.S. trading partner as he works to reorder global trade by giving America a competitive advantage through tariffs on foreign goods.

Trump now says that the deadline could be extended past July 9 or even accelerated.

“We can do whatever we want. We could extend it, we could make it shorter. I’d like to make it shorter,” Trump said Friday at the Oval Office. “I’d like to just send letters out to everyone ‘Congratulations, you’re paying 25%.'”

On April 2, Trump announced reciprocal tariffs on nearly every nation that trades with the U.S. Seven days later, he paused those higher tariff rates for 90 days to give his trade team time to cut deals with key trading partners. That 90-day deadline ends July 9 and thus far Trump has brought home two deals: A limited trade pact with the United Kingdom and a trade truce with China.

Commerce Secretary Howard Lutnick told Bloomberg that new deals are on the way, and those could serve as models for others. 

“We’re going to do top 10 deals, put them in the right category, and then these other countries will fit behind,” Lutnick said.

He said the U.S. was “close to the finish line” with India. Lutnick also said he had made an offer to the European Union. 

Trump’s decision to suspend trade talks with Canada with just days left before the deadline underscored the flexibility of the president’s trade deadline.

“These are very complex negotiations and we are going to continue them in the best interests of Canadians,” Candian Prime Minister Mark Carney said Friday while leaving his office, according to local reports.

Canada has invariably been one of the top two trading partners for the United States for years. In 2024, Canada was the top destination for U.S. exports and the third-largest source of U.S. imports. On the other side, Canada exported 75% of its goods to the United States and imported almost half of its goods from the United States.

U.S. total goods trade with Canada was an estimated $762.1 billion in 2024, according to the Office of the U.S. Trade Representative. U.S. goods exports to Canada in 2024 were $349.4 billion. U.S. imports from Canada in 2024 totaled $412.7 billion. The U.S. goods trade deficit with Canada was $63.3 billion in 2024.

Services trade with Canada, exports and imports, totaled an estimated $140.3 billion in 2023. Services exports were $86.0 billion, and services imports were $54.3 billion. The U.S. services trade surplus with Canada was $31.7 billion in 2023, according to the Office of the U.S. Trade Representative.

Shortly after taking office in January, Trump hit Canada and Mexico with 25% tariffs for allowing fentanyl and migrants to cross their borders into the U.S. Trump later applied those 25% tariffs only to goods that fall outside the free-trade agreement between the three nations, called the United States-Mexico-Canada Agreement.

Trump put a stop to the talks on Friday.

“We have just been informed that Canada, a very difficult Country to TRADE with, including the fact that they have charged our Farmers as much as 400% Tariffs, for years, on Dairy Products, has just announced that they are putting a Digital Services Tax on our American Technology Companies, which is a direct and blatant attack on our Country,” Trump wrote on Truth Social.

Trump said the digital services tax was a copy of a European Union proposal.

“Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately,” the president said. “We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period.”

Earlier this month, the two nations seemed close to striking a deal.

Trump said he and Canada Prime Minister Mark Carney had different trade concepts between the two neighboring countries during a meeting at the G7 Summit in Kananaskis, in the Canadian Rockies. 

Asked what was holding up a trade deal between the two nations at that time, Trump said they had different concepts for what that would look like.

“It’s not so much holding up, I think we have different concepts, I have a tariff concept, Mark has a different concept, which is something that some people like, but we’re going to see if we can get to the bottom of it today.”

Trump put a 10% tariff on non-USMCA compliant potash and energy products. A 50% tariff on aluminum and steel imports from all countries into the U.S. has been in effect since June 4. Trump also put a 25% tariff on all cars and trucks not built in the U.S.

The tariffs have frustrated Canadian leaders and residents. Tensions between the two neighboring countries have been high. And cities on both sides of the U.S.-Canada border have been affected.

Trump has repeatedly suggested that Canada join the U.S. as its 51st state. He previously called former Canadian Prime Minister Justin Trudeau “governor” regularly.

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Business

Canada should already be an economic superpower. Why is Canada not doing better?

Published on June 28, 2025

By

From Resource Works

Tej Parikh of the Financial Times‘s says Canada has the minerals but not the plan

Tej Parikh is the economics editorial writer for The Financial Times, a British daily newspaper. He joins our Stewart Muir for a Power Struggle interview. And we include in the following report some points from a guest column by Parikh in Canada’s National Post, which carried the headline ‘How Canada can unlock its economic superpower potential.’

Parikh begins the Power Struggle interview with this: “There’s an enormous economic potential here, very much the same geographic advantages that have underpinned America’s economic emergence over the last 100 years. . . . Given everything we understand about the advantages that countries need to grow, why is Canada not doing better economically?” He added: “When you break it down and you look at why income per capita in Canada has perhaps not increased as fast as we might expect on the basis of those advantages, it really kind of breaks down to three components. One is investment, so how much capital goes into the country?

The second is labour, and not just the amount, the size of the workforce you have, but how well you utilize the workforce. And then the third component is something that economists like to call a total-factor productivity, which is essentially your innovative ability and your ability to bring together capital and people. “And when you look at Canada as opposed to other large economies . . . you begin to see that actually there are a lot of restrictions in Canada, not just because of its vast geography but because of regulation, that it actually can’t combine its capital and labour as productively as it could.

“It’s about creating those supply chains and critical minerals that the Western world is currently short of. Given it (Canada) has these vast raw material resources, there is a massive scope for it to become even more integrated into Western supply chains in particular and to become a supplier of these things.” From Parikh’s National Post column: “The country is energy independent, with the world’s largest deposits of high-grade uranium and the third-largest proven oil reserves. It is also the fifth-largest producer of natural gas.Canada boasts a huge supply of other commodities too, including the largest potash reserves (used to make fertilizer), over one-third of the world’s certified forests and a fifth of the planet’s surface freshwater. Plus, it has an abundance of cobalt, graphite, lithium and other rare earth elements, which are used in renewable technologies. “But the nation has lacked the visionary leadership and policy framework to capitalize on its advantages.”

Watch the full interview here:

Baçk to Power Struggle: “Investors right now will know that Canada has all of this latent potential, they will know that there are resources there, they will know that there are talented workers in Canada. But (they need) the answers to what barriers there are to business and how they can be reduced, and I think that’s the piece that Canada and its provinces can do a better job on. “That’s the thing that I think Canada would benefit from, showing how it is a kind of a more unified country and showing how that it is a unified marketplace where investors and businesses can develop expansive supply chains.”

In the National Post: “A country with its geography could clearly generate higher output. To do so, the Canadian economy needs to become more efficient, raise investment and attract more high-skilled workers. Here’s how. “Canada places significant bureaucratic burdens on the movement of people and goods too. This includes restrictions on the sale of certain goods across provincial borders, and variations in licences and technical standards that hinder scaling, competition and efficient resource allocation across the country.

“A 2022 study by the Macdonald-Laurier Institute found that Canada’s economy could grow by 4.4 to 7.9 per cent in the long term — up to $200 billion a year — if it eliminated internal trade barriers via mutual recognition policies. Similar reforms in Australia in the 1990s helped to boost productivity there. “Simplifying its complex tax system, expediting planning processes, easing red tape for foreign direct investment and developing economic partnership mechanisms for Indigenous populations, in tandem with internal trade reforms, would help businesses across the industrial supply chain tap into the nation’s vast energy and mineral resources.”

On Power Struggle: “You can be rich in oil and natural gas. But obviously over the last 10, 15 years the global economy has been thinking about alternatives. In Europe and in the UK and in some states in the US, there’s a concerted effort to shift to cleaner energy sources. Canada has vast access to the critical minerals that underpin a lot of renewable energy sources. And then you can go further than that. “This isn’t just about having access to those, you know, old world energy sources. This is access to the type of energy sources that the world is looking for. So Canada is aligned to the renewable transition and I was quite surprised, actually, that in the last 10 to 15 years you haven’t really heard Canada’s name in that. I thought it was about time that Canada plays that up a bit more and the opportunities it has there.”

Tej Parikh continued: “This isn’t about just digging up Canada and exploiting its raw materials. It’s about finding ways in which you can create economic compacts with Indigenous communities, create economic compacts with Indigenous communities. “It’s a way in which you can sustainably mine parts of the country and ensure that, as you are developing underground resources in Canada, you are also developing local economies. Developing an industry means you develop jobs.

“Once you start developing factories and industries in certain areas, then financial services, commercial roles, all of these things build up, and that’s how I think the debate needs to be kind of pushed forward a little bit. “Once you start developing finance around these industries, you can also find ways to make these industries even more sustainable and environmentally friendly.”

“I think there are very clever ways in which Canada and all Canadians can see that actually these natural resources that the country has is actually an asset that everyone has a share in.” Stewart Muir then raised the Donald Trump issue: “Where have you landed on what Trump is all about? I mean, is this a poker game? Is it a chess match? Is it a street fight?”

Tej Parikh: “He likes negotiating and I think, from what we can understand from his tariff policy, he takes things to extremes and then he rows things back and he tries to gain concessions where he can. And I think he will take the same approach on most policy he has. I mean, he sees the world through a transactional lens. It’s ‘what can the other people offer me and how can we do a deal to ensure that I can gain that?’ “And I think in some sense, you know, yes, he is unpredictable, above and beyond that. But I think if you know that that's his framing, then I think it means that you know others just need to adjust to it and be pragmatic in it. And that is essentially what we have seen from the way the Canadian prime minister has been interacting with Donald Trump. You have to be pragmatic if you know what the threat could be.”

Parikh added: “I think the first thing is (Prime Minister Mark Carney) should build on the momentum that he has, the political momentum he has on reducing internal trade barriers in Canada. You then create the groundwork in order to start taking advantage of the mineral resources and the natural resources.” “Once Canadians start to feel that everyone is benefiting from the natural resources in the country and there are avenues to recycle the revenues from those sectors into the country, whether that’s through housing or developing infrastructure, improving public services, you then have this kind of reinforcement effect between the country and its natural resources and its assets and the development of peoples, and I think working on that will kind of provide the groundwork for Canada’s emergence.”

In the National Post: “The Canadian economy is at a crossroads. The belligerence of its main trading partner is driving consensus around boosting the national economy. The world needs what Canada has in abundance. The nation has a unique chance to reach its potential. If it wants to.”

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