Dear John,

With rumours of a looming federal election growing louder each day, it is likely that our leaders will soon hit the campaign trail, travelling coast-to-coast promising expensive programs – but they are choosing to often ignore important economic realities.

For example, the Trudeau government has shown little concern for their skyrocketing spending which has led to previously unthinkable federal debt levels, justifying it based on the availability of historically low interest rates.

However, those low interest rates are not guaranteed to last. A recent Fraser Institute study found that for the federal and nine provincial governments, if interest costs returned to 2019-20 levels, combined interest payments in 2021-22 would rise by 32% (or $17.0 billion) – the bulk of which would fall on Ottawa.

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The federal government also recently decided to ban gasoline-powered cars by 2035 in the drive to “net zero” emissions. This is part of a politically-driven agenda kickstarted by a 2018 “Special Report'' issued by the United Nations which showed limiting warming to 1.5°C would yield net benefits to society.

Before pushing ahead with such a drastic policy, our federal government should have reviewed the economic literature surrounding that report, including a recent Fraser Institute study showing that this report actually contradicts expert advice.

For starters, the report itself expressly stated that it did not complete a cost-benefit analysis of limiting warming! What's more, the studies that the IPCC cited to support a 1.5°C target were based on a selective survey of the research and have been criticized by economists as flawed.

In fact, some leading economists – including Nobel Prize winner William Nordhaus – have gone so far as to say that it would be better if governments did nothing at all about climate change than to try to achieve the 1.5 °C target – because the costs would outweigh the estimated benefits.

The federal government continues to repeat its commitment to “growing the economy”, despite the clear evidence that its approach to the economy has resulted in lower economic growth.

Another recent Fraser Institute study compared the economic performance for the four-year periods preceding the last five recessions. Specifically, the study compared the economic performance of 2016-19 (under the Trudeau government), 2011-14 (Harper), 2005-08 (Martin-Harper), 1997-2000 (Chrétien) and 1986-89 (Mulroney).

The results clearly point to a weaker economy during the Trudeau period of higher taxes, more government spending financed by deficits, and heavier regulations. Specifically, after adjusting for inflation the growth in per-person GDP during the Trudeau period averaged 0.8% — that’s more than four times less than the Chrétien period (3.7%).

You won’t hear most of these economic facts from any of the politicians in the upcoming election, whenever it happens. But if we want an informed electorate, these are the facts Canadians need.

As you know, the Fraser Institute releases studies such as those above every single week, moving the needle on public and media discourse with our expert, peer-reviewed studies.

We don’t take handouts from the government to do our work, we rely entirely on supporters like you.

Will you consider making a donation today?

With your help, we can bring our research to more Canadians than ever before.

Thank you for your support.

Sincerely,

Niels Veldhuis
President