BARBER: Canada’s economic warning from across 'The Pond'

The UK finds itself in serious economic trouble. The cost of its debt is approaching unmanageable levels. It faces high taxes after recent increases, a shrinking economy, declining job growth, and rising unemployment. The UK’s Office for Budget Responsibility (OBR) reports that debt is predicted to reach 270% of GDP by 2070 (“Fiscal Risks and Sustainability Report — July 2025”.) The EU’s Stability and Growth Pact recommends a debt-to-GDP ratio of 60%. The UK’s current ratio is around 100%, with annual interest payments projected at £105.2 billion.Some in the Labour Party are again advocating a wealth tax. However, wealth taxes have been shown to encourage both entrepreneurs and businesses to flee to lower-tax jurisdictions, creating a downward spiral in the economy.One of the major causes of the UK’s fiscal woes is unsustainable welfare expenditures, driven by uncontrolled immigration. Last year, the UK recorded the highest number of illegal migrants since records began. But migrants are not the only serious problem. Like many developed nations, the UK has an aging population — many of whom collect government pensions. This number grows each year. Further, the UK’s net-zero policies are estimated to cost the country £800 billion by 2050, according to the OBR..The government has announced it will cut 10,000 civil service jobs, including 2,100 positions in the Cabinet Office. The goal is a 15% reduction in the cost of running the government by 2030. However, the Labour government has reversed the previously announced welfare cuts under pressure from advocacy groups and internal divisions. Civil service unions are also expected to push back against job cuts. At the same time, the government has pledged to increase military spending to 2.5% of GDP by 2027.Canadians ought to find this scenario familiar. Prime Minister Mark Carney is not an original thinker. Canada’s gross debt-to-GDP ratio was 104% in 2024 — higher than the UK’s. Business and personal taxes remain too high, dampening the economy. Combined with the soaring cost of living, this is prompting many young Canadians to leave.Both the tax burden and the cost-of-living crisis are driven by high levels of immigration. This has contributed to a housing crisis, overwhelmed Canada’s medical system, and strained provincial budgets with increased costs for education and other services..Canada also has an aging population, many of whom are now collecting pensions they paid into through Social Insurance. The number of pension recipients will continue to increase. Canada has also neglected its military for decades and has repeatedly failed to meet its NATO spending commitments. Carney has pledged to raise military spending to 5% of GDP by 2035. Meanwhile, federal public sector layoffs are already underway, with young workers being disproportionately affected. But meaningful reductions in government costs remain unlikely due to political pressure and entrenched bureaucratic resistance — as we see in the UK.Likewise, the dream of Canada becoming a nationwide, foolproof, net-zero, renewable energy superpower is unrealistic. The life expectancy of wind turbines and solar panels is about 25 years. As seen in Texas, turbines freeze when temperatures reach 0°F, and solar panels are ineffective during long winter nights or under cloud cover. That would mean southern British Columbia would be expected to power the entire country at times with its turbines, while Alberta would have to replace farmland with solar farms. Neither scenario is remotely plausible.For comparison, an oil pipeline can last 50 to 70 years. Some U.S. nuclear plants can operate for 60 years, and research suggests this could be extended to 100. The up-front cost of becoming a net-zero superpower through wind and solar would be astronomical. Simply compare the size of the UK to Canada and multiply the cost accordingly. Equipment replacement costs will only increase over time. Moreover, wind turbines, solar panels, and their batteries are not truly green — all have environmental and industrial costs..Prime Minister Carney has also come under fire for a long list of conflicts of interest, largely stemming from his relationship with Brookfield Asset Management and its web of partner companies. Brookfield’s website describes it as “one of the world’s largest investors in renewable power.” It also has significant interests in carbon capture. While Carney has stepped down from his formal role with the company, it would be naive to assume there is no prospect of a post-office arrangement.Canadians who voted for the Liberal Party are slowly waking up to the fact that the party does not represent working people — it uses them. Today’s Liberal Party represents the interests of an elite class. It uses politics and media to convince the public to support policies that transfer Canadian tax dollars to shareholders and politically connected insiders. Since Canada is already in debt, this requires more borrowing. The bill will be paid by future generations — or they’ll simply leave.The UK stands as a cautionary tale. What Canada needs now is a Liberal Party serious about fiscal responsibility. There is only one realistic way out of our financial predicament: the government must abandon its net-zero pipe dream and focus on growing the economy by increasing resource extraction and exports, streamlining regulations, lowering taxes across the board — including scrapping the industrial carbon tax — and incentivizing entrepreneurship.And finally, the prime minister should put his elbows down and negotiate a trade deal with the United States to generate much-needed revenue. A deal that secures even 70% of Canada’s needs is better than no deal at all.Dr. A.W. Barber is the former Director of Asian Studies at the University of Calgary. He is internationally active and has wide-ranging interests.

BARBER: Canada’s economic warning from across 'The Pond'

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