Dear John,

With a federal election on the horizon, it’s worth reflecting on the Trudeau government’s extraordinary legacy.

It includes record-high levels of spending (even after excluding emergency COVID spending), an uninterrupted string of budget deficits, and a near doubling of the federal debt from $1.1 trillion to $2.1 trillion.

This has all resulted in sky-high federal debt interest payments, which will reach a projected $53.7 billion (more than all GST revenue!) this fiscal year.

Clearly, the next federal government – whoever that may be – must get smarter about government spending.

That’s where the Fraser Institute comes in.

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Last week, we released a study that identifies many areas within the federal government to find savings.

Here are just a few of them:

Canada Infrastructure Bank (CIB)

This crown corporation, established by the Trudeau government in 2017, will spend a projected $3.5 billion this year.

It is tasked with investing and attracting investment in infrastructure projects across Canada, but has demonstrated an alarming lack of progress. As of July 2024, only two out of 76 CIB-funded projects had been completed. In fact, a multi-partisan House of Commons committee already recommended the government abolish the CIB in 2022!

Regional Development Agencies (RDAs)

These seven agencies dish out corporate welfare to businesses in specific regions across the country. Total spending will reach a projected $1.5 billion this fiscal year!

But research shows that corporate welfare does little to nothing to promote widespread economic growth. It simply allows the government to pick winners and losers in the free market. And rather than using concrete objectives and results to justify their existence, the RDAs rely on vague platitudes such as “businesses are growing” and “communities are developing economically.”

The “Strategic Innovation Fund”

This fund spends tax dollars (a projected $2.4 billion this fiscal year) to simply shift jobs and investment away from some firms and industries to firms and industries favoured by the government, with no net benefit for the overall economy.

Global Innovation Clusters
“Global Innovation Clusters” simply incentivize firms to spend time and resources modifying their businesses to secure government grants (worth $202.3 million this fiscal year), rather than developing new and improved goods and services.

The Green Municipal Fund (GMF)

This fund uses federal tax dollars (including a projected $530 million this fiscal year) to bankroll municipal projects that purportedly accelerate the transition to “net-zero” greenhouse gas (GHG) emissions.

But several current projects will not reduce GHG emissions in any measurable way. In other words, the GMF is spending taxpayer dollars on projects that make no progress towards the GMF’s own stated goal!

These are just a few examples. The lesson is clear: smaller and smarter government in Ottawa is both possible and necessary.

The Fraser Institute will continue to provide this kind of guidance to incoming governments – while also informing Canadians about government waste at all levels.

John, as Canada enters a period of change, I think you’ll agree that our work is more important than ever!

If you support the work we do, please consider making a donation today.

We don’t accept government money to conduct our research – we rely entirely on supporters like you!

Sincerely,

Niels Veldhuis
President
The Fraser Institute