The Supreme Court slaps down Trump’s tariffs—but Canada isn’t in the clear yet: The Weekly Wrap

In the medium term, the biggest risk may be the Canada–United States–Mexico Agreement (CUSMA) itself. The agreement permits withdrawal with six months’ notice, and there were already reports that the president was considering it. New constraints on his unilateral imposition of tariffs increase the probability that he directly targets the USMCA. While Congress might contest the domestic legal ramifications of such a move, the economic effects would of course be huge. Even the credible threat of withdrawal would introduce risk premiums into cross-border commerce. It could further delay capital expenditures, raise financing costs, and cause firms to shift production to the U.S. as a hedge against the possibility of less secure access to the U.S. market. In this respect, the Court’s decision may prove paradoxical. By foreclosing one instrument of executive tariff escalation, it could inadvertently accelerate the shift to more existential questions about the foundation of continental trade itself. None of this diminishes the importance of the ruling. Trade policy of such magnitude shouldn’t rest on improvisational readings of statutory language. Congress ought to bear responsibility for decisions that alter the trajectory of the North American economy. But constitutional clarity also doesn’t guarantee political restraint. Whether the ruling ultimately stabilizes trade relations or provokes a more dramatic confrontation will depend less on legal doctrine and more on presidential temperament. That’s a precarious dynamic for Canada to say the least, given Trump’s mercuriality and our inextricable interdependence. Our government is getting costlier—but is it getting better?  A new report from the Parliamentary Budget Officer provides fresh data on the massive growth of the federal bureaucracy under the Trudeau and now Carney governments. Much of the focus in recent years has been on the expansion of Ottawa’s employment footprint. But the PBO’s updated Personnel Expenditure Analysis Tool is especially useful because it doesn’t just track headcount. It also tracks the cost of that headcount. In 2015-16, the Trudeau government’s first full fiscal year in power, total federal personnel spending was approximately $39.6 billion. By 2024-25, it had reached roughly $71.4 billion. That’s an increase of about 80 percent in less than a decade—substantially outpacing nominal GDP or nominal inflation over the same period. It would be easy to attribute the increase solely to a larger workforce. And certainly, the number of federal employees has risen meaningfully since 2015. But the PBO’s data show that this is only part of the story. Compensation per employee has also climbed significantly. In 2024-25, total compensation per full-time equivalent reached approximately $143,000. A decade earlier, it was closer to the low-$110,000 range. That implies growth in average compensation on the order of roughly 25 to 30 percent over the period. This growth in the size and cost of the federal government matters for two main reasons. First, personnel spending is the largest component of federal operating expenditures. Sustained growth of this magnitude has therefore contributed to the structural deficits and rising debt that now define the fiscal landscape. When the cost of running the machinery of government expands this markedly, it necessarily crowds out other priorities or adds to borrowing. Second, Ottawa’s growth in size and cost hasn’t been accompanied by a corresponding improvement in governmental outcomes. By most observable metrics, federal productivity and state capacity haven’t improved in parallel with this growth. If anything, the federal government’s performance has deteriorated even as its payroll has ballooned. That’s why the most pressing question facing Ottawa’s public administration isn’t simply about deficits and debt in the abstract. It’s about the size and scope of government itself. What do we want the federal government to do? How much are we prepared to pay for it? And what evidence do we have that greater spending on the public service will have better outcomes? However one answers these questions, it’s fair to say that an 80-percent increase in personnel costs over a decade is a sign that an increasingly costly and ineffectual government is a poor trade-off for taxpayers. Doug Ford’s political instincts are on full display I’ve been critical of Ontario Premier Doug Ford on policy substance at various points. But I’ve never doubted his political acumen. Three consecutive majority governments in a province as large and diverse as Ontario are no small feat. It reflects in large part his common touch and political intuition that were both on display this week. It started with Ford’s appointment of Don Cherry to the Order of Ontario. Cherry’s ongoing omission from the Order of Canada is a source of conservative frustration. For many, it symbolizes an elite cultural sensibility that’s dismissive of the loyalties and tastes of hockey dads and grandfathers across the country. Whatever one thinks of Cherry’s controversies, his place in Canadian hockey culture is undeniable. Honouring him at the provincial level was a culturally fluent move. Ford followed it up by announcing that Ontario schoolchildren would be able to watch the remaining Olympic hockey games, including Thursday’s women’s final and Friday’s men’s semifinal, in their classrooms. The decision is reminiscent of the 1972 Summit Series and other moments when classes paused, and the country rallied around Team Canada. It’s a small act of patriotism and nostalgia, but it taps into a deep reservoir of shared memory and identity. These gestures reflect a powerful intuition on Ford’s part. He has a unique instinct for the cultural sensibilities of the median voter. By validating rituals and symbols that matter to ordinary Ontarians—including many conservatives—he reinforces a sense that he “gets” them. That cultural responsiveness has given him considerable room to deviate from conservative policy without losing broad-based support. At a time when culturally coded issues are salient, one shouldn’t underestimate what voters will tolerate from a leader who reflects their affections and instincts. I’ve long had a hypothesis that the nascent nationalism and good vibes surrounding the 2010 Vancouver Olympics and Sidney Crosby’s golden contributed, at least at the margins, to Stephen Harper’s majority victory in 2011. Fifteen years later, Ford is trying to tap into similar sentiments. His cultural instincts and penchant for retail politics are a major reason why he’s one of the most successful politicians in Ontario history and anywhere in the country in decades.