Justin Pierre James Trudeau, the unusually handsome Prime Minister of Canada, cannot stop interfering with the internal affairs of other nations on dubious concerns about human rights but he is facing quite an economic mess back home. As a matter of record, Canada’s economy is at its worst since 1961. Canada’s GDP contracted by 5.4 per cent in 2020, which is quite a catastrophe even in the background of the pandemic-induced downturn.
There is only one man, whom you can blame for Canada’s poor economy- Prime Minister Justin Trudeau. Make no mistake, he inherited a rich Canada with a prosperous economy from his predecessor Stephen Harper. But in a matter of just 6 years, Trudeau has done some unprecedented damage to the Canadian economy. Even before the pandemic, Trudeau’s economic policies were damaging the Canadian economy and things have only worsened after the Wuhan virus outbreak.
Justin Trudeau’s predecessor Stephen Harper was actually an able administrator, at least in terms of economic growth. During his tenure, the Canadian per capita GDP growth matched that of the United States of America. But things changed after the present Prime Minister came to power.
To be fair, Justin never promised prudent economics. Blessed with photogenic looks, his political brand was all about attracting first-time voters and liberal elites. His promises mostly revolved around populist ideas like climate vigilantism and legalising marijuana.
The results began to show shortly after Justin Trudeau assumed office in 2015. Canadian GDP growth declined sharply and the GDP per capita growth went down to 2.7 per cent in Canada, as compared to 6.3 per cent in the US. Even during the Pandemic, Canada’s economy shrank almost twice as much as the US economy did, even though the United States of America recorded more COVID-19 cases per capita.
Trudeau loved mocking Trump, but now we do know that the latter’s economic policies were much better. Trump was market-friendly and also sensitive about the American middle class, which showed in the form of lower tax rates. Compare this with Trudeau’s disastrous taxation and regulatory policies.
It was the Trudeau government that burdened the Canadians with moves like the imposition of the carbon tax, making payroll tax more expensive, increasing the top marginal income tax rate by four percentage points, doing away with the income-splitting tax credit and imposing higher taxes on small businesses.
As if all the tax hikes were not enough, the Liberals led by Trudeau also imposed deferred taxes to the tune of almost $75 billion on the Canadians. The rise in deferred taxes is plainly a legacy of the Trudeau government’s imprudent fiscal policies, which will make the future tax bills even more painful.
Trudeau’s regulatory policy was still worse. His environmental vigilantism led to burgeoning environmental regulations and impeded natural resource development. The Trudeau government introduced anti-resource development legislations like C-69, or the “no pipelines” bill, and also rejected the amendments suggested by industries and provinces reliant on oil and gas.
And then, Trudeau’s liberal ideals like opening up Canada for immigration hasn’t helped either. Low economic growth and higher taxes have got coupled with the diversion of resources away from Canadian citizens.
After 2019, things have deteriorated further, especially because Canada has also lost political stability. Trudeau is heading a minority government today, which stands further pressurised by nefarious elements like the anti-India, Khalistan lobby.
Once the Pandemic struck, Trudeau could have done little to make the Canadian economy worse. But such has been his saga that the Canadian Prime Minister still found more ways to damage Canada’s economy. Canada’s economy faced a massive contraction, followed by a lukewarm recovery and V-shaped economic recovery, that is, a sharp decline in growth followed by a phase of strong growth is nowhere in sight.
So, what led to the sharpest annual decline in the Canadian economy since the Second World War? Justin Trudeau was more committed to borrowing than any other leader around the world. But liquidity infusion cushions economic blows, only when it is prudent. The Canadian PM, on the other hand, resorted to reckless borrowing. According to federal data, Canadians received C$20 in the form of government transfers for every dollar of income lost.
Yet, Canadians hoarded most of the money that was put in their hands, and it never reached the Canadian markets. So, the government ended up spending way too much, but the governmental overspending has been of little help to Canadian businesses. As one opposition leader puts it- “The government spent the most to achieve the least.”
The sharp contraction in the Canadian economy was a consequence of the lack of economic activity and the strict lockdowns imposed by the Trudeau regime. But the negative effects of government overspending have still not showed up. The Canadian economy is bound to get worse from here.
According to economist William Robson, chief executive officer of the C.D. Howe Institute in Toronto, “The federal government’s capacity to deliver future services has deteriorated spectacularly.” He also said that tax hikes are a near-certainty.
Ever since Trudeau came to power, the Canadian economy has uniformly moved towards slower growth and major contractions. The Canadian PM inherited a rich Canada, but he has taken only six years to take it towards total misery.