Ottawa Could Save $10.7B by Cutting ‘Ineffective’ Programs: Fraser Institute

The Peace Tower on Parliament Hill in Ottawa is framed in a railing, on Jan.24, 2025. The Canadian Press/Adrian Wyld

The federal government could save up to $10.7 billion this fiscal year by eliminating eight spending programs that have been “ineffective,” according to a new study from the Fraser Institute.

Published on Feb. 25, the study’s authors say there is a need to review federal spending in light of Canada’s deteriorating finances they say are being driven by “rapidly increasing” government spending.

The study identifies eight programs, which the authors say consist of “easily identifiable problems” that have shown them to be “inefficient and/or ineffective.”

“These programs represent instances where government spending does not appear to be accomplishing the stated goals, and where government involvement is questionable,” said the study, which was authored by Jake Fuss, director of fiscal studies at the Fraser Institute, and Grady Munro a policy analyst at the institute.

The report says these programs include:

• Canada Infrastructure Bank – $3.5 billion
• Strategic Innovation Fund – $2.4 billion
• Federal support for journalism – $1.7 billion
• Regional Development Agencies – $1.5 billion
• Federal support for electric vehicle production and purchases – $587.6 million
• Green Municipal Fund – $530 million
• The 2 Billion Trees Program – $340 million
• Global Innovation Clusters – $202.3 million

In the first example, the study critiqued the Canada Infrastructure Bank, citing its low productivity despite significant government funding. Established in 2017, the Crown corporation is tasked with attracting private sector investment in Canadian infrastructure projects. While the bank has approved $13.2 billion in investments across 76 projects, only two projects have been completed, accounting for just $93.2 million—or 0.71 percent—of the approved investments, the think tank noted.

The CIB’s website lists 79 projects, including 58 new infrastructure developments currently under construction. It says these projects have created nearly 175,000 jobs. In a statement to The Epoch Times, the CIB highlighted that its annual investments of $3 billion to $5 billion are structured as loans, which are repaid with interest, rather than grants.

The Fraser Institute study also described Canada’s Regional Development Agencies (RDA) as an example of “Ottawa spending significant taxpayer money and accomplishing little.” The report noted that the seven federal agencies overseeing the program are projected to spend $1.5 billion in fiscal year 2024-25, employing 1,977 full-time staff. It said these agencies aim to redistribute taxpayer money to private firms to boost economic growth but “report vague objectives and results that make it difficult for government officials or Parliamentarians to assess the efficacy of the spending.”

The government says the RDA supports regional innovation ecosystems by delivering tailored programs, providing financial assistance, fostering community development, and aligning regional growth strategies with federal objectives to address regional gaps.

The Fraser Institute study also raised concerns about the effectiveness of the Strategic Innovation Fund (SIF) in promoting innovation and economic growth. Launched in 2017, the SIF has approved $9.5 billion for 129 projects as of April 2024. Although the fund’s latest Impact Report shows recipients outpacing the Canadian average in R&D spending while employing 4,600 full-time workers, the Fraser Institute said that these metrics are “incorrectly presented” as directly contributing to innovation and economic growth.

Meanwhile, the 2 Billion Trees program, launched with a $3.2 billion investment, has also faced criticism for falling behind schedule. The report flagged significant execution issues, citing a 2023 report from the Office of the Auditor General, which found that only 2.3 percent of the planned trees had been planted as of 2022. The study also noted that the program had already spent $480.5 million—15 percent of its total 10-year budget. In a November 2024 press release, the government said it had so far signed or is negotiating agreements to plant 716 million trees.

The Epoch Times contacted the federal departments and entities overseeing these programs, including the Department of Innovation, Natural Resources Canada, and the Federation of Canadian Municipalities, but did not receive a response by publication time.