Just how much damage did Justin Trudeau do to Canada’s economy? 

This week marks 10 years since that sunny fall day when the new Trudeau government was sworn in at Rideau Hall and Canada optimistically embarked on a decade of transformative social change. Ultimately, this agenda was not moored to any commitment to serious fiscal discipline or other economic fundamentals—it was policy outcomes, not their price tags, that were prioritized. This free-spending spree was disrupted by international events, including a pandemic, that only accelerated these tendencies. Ending Canada’s decades-long national consensus on the benefits of immigration by rapidly increasing the country’s intake numbers was a Hail Mary response to kickstart a moribund economy struggling to recover. While future historians may look favourably on an overall agenda that included new commitments to environmental policy and carbon pricing, boosting immigration, a national childcare plan, infrastructure spending, an enhanced child benefit, enhancements to the Canada Pension Plan and Old Age Security, and a national dental plan, the legacy will ultimately remain coloured by the reality that this was financed by increased government spending and not anchored in economic productivity. Rather, it was driven by tax increases, deficits, and the growing national debt. The Trudeau government’s economic performance can be summarized in five key charts outlining the signature policies that will define the former prime minister’s legacy. 1. Anemic economic growth We start with real per capita GDP from 2015 to 2025 (Figure 1). The overall period is actually marked by an upward trend despite the fluctuations of the pandemic, with real per capita GDP in 2025 about 2 percent higher than in 2015. However, this is anemic real per capita growth that only averaged one-fifth of 1 percent annually over this 10-year period. 2. Poor private-sector productivity A reason for such anemic growth is best summarized in Figure 2, which plots real per capita business investment in core private sector productivity-enhancing capital formation: investment in non-residential structures, machinery, and equipment (NRSME). Between 2015 and 2025, real per capita investment in NRSME fell from $6,106 to $4,954 ($2017 dollars)—a drop of nearly 19 percent. All the government infrastructure spending in the world will not increase economic productivity if there is not rising private sector investment in plant and equipment to go along with it. 3. Skyrocketing immigration rates  Of course, poor productivity growth was amplified by population growth rates exceeding the growth of both the economy and capital investment. It is not that immigration is not a benefit to the economy, but it needs to be accompanied by capital investment. As a result, Canada’s total economy did grow from 2015 to 2025, but was driven largely by the total spending associated with a growing population rather than capital deepening.  Or as economists might say, Canada’s economy from 2015 to 2025 was driven by extensive rather than intensive growth. Figure 3 presents both total population and total immigration for the 2015 to 2025 period. Annual immigration ramped up gradually from 2015 to 2019, then took off dramatically after the pandemic drop to reach 718,000 in 2022, 1.1 million in 2023, and 1.2 million in 2024 before being reined in to what may be just over 420,000 in 2025. Between 2015 and 2025, Canada’s population grew 16.7 percent, going from 35.7 to 41.7 million. 4. Deficits, deficits, and more deficits Along with the extensive growth afforded by a rising population, the economy from 2015 to 2025 also received stimulus from rising government expenditure, much of which was to fight the pandemic. Figure 4 plots both the federal government’s annual deficit as well as the net debt. The Trudeau years all featured a deficit, with the accumulated deficit and assorted capital projects costing billions of dollars doubling the net debt from $701 billion in 2015 to an estimated $1.4 trillion by 2025. The net debt-to-GDP ratio also grew during this period, rising from 35.3 to about 44 percent. 5. Declining poverty rates Of course, in the end, all of this spending was supposed to help the people, and particularly when it came to the enhanced child benefit, it did reduce poverty rates. As Figure 5 demonstrates, the rising value of the maximum federal child benefit for each child aged six years and under rose from under $6,000 in 2015 to nearly $8,000 by 2025—an increase of approximately 40 percent. There was indeed a decline in poverty rates, given that this was a de facto guaranteed annual income for families with children under age 18. The overall poverty rate fell substantially from 14.5 percent in 2015 to 6.4 percent by 2020, and the child poverty rate from 16.3 to 4.7 percent. Short-term gains, long-term pain However, the policies of the Trudeau government eroded the very legacy they sought to achieve. A weak economy, falling productivity, rising unemployment, and pandemic inflation amplified by massive fiscal stimulus have served to reverse the decline in poverty rates. In the end, the Trudeau era embarked on a road to social transformation paved with good intentions, but it should have had a few lanes devoted to economic productivity and fiscal responsibility. The Trudeau government could have used the drive and discipline of a couple of C.D. Howe-type ministers rather than an entire cabinet recruited from the same social agenda gene pool. While there were serious bumps and detours in the road in terms of our international relations with China and the United States, as well as the trauma of the pandemic, it remains that matters were complicated by a virtue-signaling foreign policy focused on Canadian values rather than value in the form of trade relations. In the end, if you wish to promote the Canadian way, it helps to show a robustly growing economy and have a couple of aircraft carriers in your back pocket. Hopefully, the next government will exhibit learning behaviour.