The Good Ship Canada is taking on water, and bringing in far too many unproductive crew, and its Captain Justin Trudeau simply re-arranges the deck chairs.
Suddenly, Canada’s economy contracted in the second quarter this year and heads toward a recession, the first high-income country to do so. Canadians threaten to mutiny — a recent poll showed that a majority want Trudeau and his governing sidekick, Jagmeet Singh, out of office.
“Canada is one of the only high-income countries yet to economically rebound from the COVID recession. Average income per person in Canada (adjusted for inflation) was $55,677 in the first three months of this year compared to $56,183 at the end of 2019. We’re poorer today than we were three-and-half years ago despite the avalanche of federal government spending and borrowing,” concluded the Fraser Institute in a July report.
It also cited that Canadian incomes have fallen against American incomes since Trudeau took power. “In 2016, average per-person incomes in Canada were 82 per cent of U.S. levels — C$54,154 compared to C$65,792, or an $11,600 difference per person. By the end of 2022, our per-person incomes had fallen to 76 per cent of U.S. levels — C$55,863 compared to C$73,565. Put differently, Canadians are $17,700 per person poorer than Americans,” added the Institute.
Under Trudeau, Canada is unable to accommodate the high immigration targets of his government, thanks to inflation, higher interest rates, unaffordable housing prices, and a health care crisis. Many Canadians do not have a family physician and cannot get doctors’ appointments for months, a problem worsened by a growing population.
Unfortunately, Canadians could be stuck with the ruling trust fund duo until 2025, when their coalition deal ends. So Trudeau busies himself with giving MPs raises in pay plus creating the country’s biggest, overpaid cabinet in history. He now has 38 in place, none of whom have expertise in the domain over which they preside. (The U.S. has a cabinet of 25 and Australia of 20.)
Instead of drumming up trade, such as cashing in on supplying LNG to India or China so they can transition from dirty coal, he headed off to the G20 meeting in India to raise the issue of foreign interference by Sikh radicals in Canada with Prime Minister Narendra Modi. Trudeau’s approach to this issue insulted India, and may be why he was unable to get a bilateral summit with the Indian leader. If he was pitching LNG or investments, he’d rise to the top of the list, but that’s out of the question, and this year Trudeau has nixed proposals worth billions made by Japan, Germany, and Spain to build gas liquefaction and export plants in Canada.
This lack of smart leadership is why Canada slowly sinks. “The Organisation of Economic Cooperation and Development (OECD), a 38-member international organization, predicts that Canada will be the worst-performing advanced economy from 2020 to 2030, with inflation-adjusted per-person GDP growth of only 0.7 per cent per year over the decade. The same is true from 2030 to 2060,” the Fraser Institute’s July report notes.
In March, the Fraser Institute estimated the federal deficit will reach $40 billion in 2023, or $10 billion higher than forecasted, and that there is no plan to balance the budget.
In May, a report by Canada’s housing agency, the Canada Mortgage and Housing Corporation (CMHC), said high household debts (due to high mortgages as a result of high housing costs) put the economy at more risk going forward. “Canadian households are more in debt than those in any other G7 country, and the amount they owe is now more than the value of the country’s entire economy,” the CBC reported.
The CMHC’s deputy chief economist warned that “Canada’s very high levels of household debt — the highest in the G7 — makes the economy vulnerable to any global economic crisis. When many households in an economy are heavily indebted, the situation can quickly deteriorate, such as what was witnessed in the U.S. in 2007 and 2008.”
Even so Canada’s Minister of Finance Chrystia Freeland said in July “I think we can be really optimistic about the Canadian economy. Canada had the strongest economic growth in the G7 over the course of 2022.”
With mentality like that Canada heads for the shoals. In 2015, Trudeau promised modest budget deficits and balanced budgets by 2019. Instead, he’s spent like a sailor: Compensation paid to federal employees increased 52 per cent, from $38 billion in 2015 to $58 billion in 2021. Federal employment job growth is three times greater than in the private sector and, at the same time, management fees paid to consultants have skyrocketed from $10.4 billion when the Liberals took office, to an estimated $17.7 billion in 2022, a jump of nearly 60 per cent.
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Franco Terrazzano, director of the Canadian Taxpayers Federation, nailed it when he recently wrote, “this government doesn’t care about fiscal prudence or helping taxpayers.”
This is why Canada’s co-captains must be dumped ashore as soon as possible.