Canada's Economic Web of Woe: Inflation, Debt, and Regulatory Burdens

Canada's economic woes are piling up at an alarming rate, according to veteran business leader Gwyn Morgan. The country is facing a web of interconnected issues that threaten to derail its economy. From food cost inflation to government debt and regulatory burdens, each strand worsens the other.

The highest annualized food inflation rate among G7 countries is currently plaguing Canada at 7.3 percent. This translates to a typical family of four spending $17,500 per year on groceries, a year-over-year increase of $1,000. The reasons for this include higher taxes, interprovincial trade barriers, and international trade barriers.

The Liberal government's industrial carbon tax continues to drive up costs for producers, processors, shippers, wholesalers, distributors, and retailers. Additionally, the complex and costly regulatory environment is contributing to the problem. These policies are driving up food costs for Canadians, making it a crisis that demands attention.

The growing cost of government is another significant issue. The number of federal public service employees has increased by 36 percent since 2013-2023, while private-sector employment grew by only 15 percent over the same period. This has led to a staggering $1.4 trillion in combined federal, provincial, and municipal government spending as a share of Canada's economy.

Furthermore, government workers enjoy employment benefits substantially superior to those of private-sector workers who pay for them. A 2025 Fraser Institute study found that 87 percent of government workers are covered by a pension, compared with only 22 percent of private-sector workers.