FRASER INSTITUTE: Only when Canadians are armed with facts can they make informed decisions about their governments

There are two major federal policy events on the immediate horizon, both of which have serious implications for Canadians: the planned carbon tax hike on April 1, and the federal budget on April 16.

 

Here is what you need to know.

 

Carbon tax hike:

Despite a majority of Canadian premiers calling on Ottawa to cancel this year’s hike, the Trudeau government plans to raise its carbon tax by another 23% on April 1st.

 

The government has claimed that a higher carbon tax will have ‘almost zero’ impact on Canadians.

 

But the Fraser Institute published an analysis of the estimated effects of a $170 per tonne carbon tax and found this claim to be completely untrue.

 

• Canada will see permanent job losses of over 184,000.
• The economy will shrink by 1.8%, which in 2019 would represent a loss to the economy of about $38 billion.
• Even after taking the carbon tax rebate into account, the average Canadian will still have $1,540 less income every year.
• Deficits are projected to increase by $22.1 billion, leading to more debt and higher taxes down the road.

 

This could almost be forgiven if it would truly solve climate change – but Canada’s CO2 emissions are about 1.5% of the global total, meaning that even if Canada’s emissions went down to zero overnight, global emissions would barely budge!

Federal budget:

In November’s fall economic statement, the government committed to keep the 2023/24 deficit below $40.1 billion.

 

But the Parliamentary Budget Officer projects the Trudeau government may once again miss its own fiscal target.

 

This wouldn’t be a huge surprise, as this government has a history of breaking its own fiscal rules. Since first elected, it has increased annual program spending by approximately 75%, and financed much of this increased spending through government debt.

 

After adjusting for population growth and inflation, the Trudeau government has recorded the five-highest years of per-person spending in Canadian history.

Like the carbon tax, this could be forgiven if Canadians saw value for the spending.

 

But what have Canadians actually gotten in return? According to another recent Fraser Institute study:

 

• The federal government plans to spend more taxpayer dollars on debt interest in 2023/24 than on child-care benefits.
• Future generations will have to pay off a debt burden that’s nearly double what it was when Prime Minister Trudeau was elected in 2015.
• And Canadians are currently suffering an economic growth crisis that has left living standards worse in the fourth quarter of 2023 than they were at the end of 2014.

 

It is clear that nothing short of a complete reversal in federal fiscal policy is acceptable in the upcoming budget.

 

I’m happy to report that the above-mentioned studies, and their related commentaries, reached hundreds of thousands of people in newspapers across the country and on social media.

 

Only when Canadians are armed with facts can they make informed decisions about their governments.

 

Sincerely,

Niels Veldhuis, President
The Fraser Institute