The Weekly Wrap: We don’t just need a smaller budget deficit—we need a smaller government

We’ll no doubt hear a lot about so-called “fiscal anchors” in the coming weeks. But we shouldn’t forget that the best constraint on deficits and debt is a more limited view of the government itself. The real path out of the Trudeau-Carney era’s structural deficit, in other words, is ultimately a smaller government. Canada Post is just another mess Trudeau left for others to clean up News that the Carney government is preparing sweeping reforms to Canada Post shouldn’t come as a surprise. The Crown corporation’s deteriorating financial position has been evident for years. What’s striking is how long policymakers have put off dealing with the problem. Many of the anticipated reforms—including scaling back door-to-door delivery and restructuring legacy costs—were first enacted more than a decade ago under the Harper government. The Liberals ran explicitly against those changes in 2015, and the Trudeau government ultimately reversed them. The net effect was to delay necessary reforms for 10 years while the company’s finances steadily worsened. It’s in keeping with a broad reappraisal of the Trudeau government’s record. Recent polling, for instance, tells us that Canadians hold a dim view of Justin Trudeau as the costs and consequences of his government’s choices come into fuller sight. But the truth is that these outcomes were hardly unforeseeable. The Trudeau government’s tendencies toward overspending, its inattentiveness to economic efficiency, its social experimentation on crime and addiction, its reckless immigration policy, and more, were bound to disappoint. The problem, as I’ve previously written, wasn’t that it lacked ideas. It’s that it pursued bad ones. Prime Minister Carney is now left to clean up the mess. A disproportionate share of his early policy agenda has involved reversing his predecessor’s errors—Canada Post being only the latest example. In that sense, his government’s actions are welcome. They represent a belated recognition that Trudeau-era policies were unsustainable and counterproductive. What remains unclear, however, is whether the Carney government is committed to more than mere reversal. Canadians don’t just need a government that undoes the mistakes of the past decade. They need one prepared to chart a genuinely different course. Repealing bad ideas is a start. Replacing them with better ones is the real test. Immigration policy requires more than just technocratic thinking This week, I published a DeepDive essay at The Hub on Canadian social trust and its interaction with contemporary immigration policy. It’s received a stronger reaction than I might have anticipated. The essential question was: Can the historic experience of newcomers converging over time with Canadian levels of social trust still be relied on in light of the scale, speed, and segregation of recent immigration flows? These types of questions evidently resonate: People aren’t just interested in supply and demand models or back-of-envelope arithmetic when it comes to immigration policy. They want to grapple with deeper dilemmas about national identity, social cohesion, and so on. This is a welcome development. Too often, our public discourse treats immigration in purely technocratic terms: how many people can we absorb, what is the labour market impact, how should we carry out settlement? Those are important questions, but they’re second-order. They fail to account for first-order issues like social trust. My essay argued that Canada’s high level of generalized trust is a huge civic advantage. It enables markets to function, civil society to flourish, and legitimacy in our democratic institutions to be sustained. Yet trust isn’t static. It evolves, in part shaped by culture, institutions, and the norms that make up our collective experience. The pace, scale, and spatial concentration of immigration necessarily influence these conditions. The empirical literature is mixed but instructive: High-trust societies can absorb diversity without losing cohesion—if institutions are robust, bridging contact is frequent, and public policy is deliberate. But when demographic change is compressed in time and concentrated in particular cities or neighbourhoods, the risk rises that we see fragmentation, parallel communities, and a weakening of generalized trust. This means that, for all of the talk of housing supply or social services, we need to spend as much time focused on the civic conditions that enable Canada to maintain its culture of social trust while accommodating historical immigration levels. That requires rethinking public institutions, settlement policy, schooling, spatial planning, and even how public services encourage meaningful cross-group contact. These issues are complex and prone to passions. But as the reaction to the essay shows, Canadians instinctively understand that they’re ultimately key to ensuring that Canada can both remain a high-trust society and maintain high levels of immigration from around the world.