LILLEY: Canadians shouldn’t accept a lower standard of living

Authors: Brian Lilley

Publisher:

torontosun

Published: 10/30/2025

Language:English

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Elon

Good morning tester, I'm Elon, and this is Goose Pod for you. Today is Tuesday, November 04th. I'm Taylor Weaver, and we are here to discuss a really critical topic: Brian Lilley's assertion that Canadians shouldn’t accept a lower standard of living.

Taylor Weaver

Absolutely, Elon! It's a powerful statement, and it really sets the stage for a deep dive into Canada's economic health, especially with all the discussions around productivity, trade, and what our future holds. I'm eager to unpack this with you.

Elon

Indeed, Taylor. Lilley's piece echoes a sentiment many Canadians are feeling, a frustration with warnings from figures like Bank of Canada Governor Tiff Macklem about potentially lower incomes. It’s not just talk, it’s about real consequences from global trade dynamics.

Taylor Weaver

That's right, and interestingly, while the article mentions Macklem's warnings, our deep dive into the core event reveals a lot about how these macro issues translate into real-world impacts. For instance, a Nanos Research survey from October 2025 showed Canadians are really concerned about specific industries hit by US tariffs.

Elon

Precisely. The survey highlights agriculture and the auto sector as top priorities for federal support. Twenty-nine percent ranked agriculture first, twenty-four percent for auto. This isn't abstract economics; it's farmers and factory workers feeling the squeeze.

Taylor Weaver

And it makes perfect sense when you consider how tied these priorities are to provincial economies. Agriculture in the Prairies, auto in Ontario, softwood lumber in British Columbia, aluminum in Quebec. Nik Nanos from Nanos Research pointed out that there's no single issue cutting across the entire country, which makes Prime Minister Mark Carney's job quite the political juggling act.

Elon

It's a fragmented response to a systemic problem. And it's not just about what industries need support, it's about the very legality and impact of these tariffs. Take Rick Woldenberg, CEO of Learning Resources, suing over what he calls 'Liberation Day' tariffs.

Taylor Weaver

Yes, Woldenberg’s lawsuit, 'Learning Resources v. Trump,' argues these tariffs are unlawful under the International Emergency Economic Powers Act of 1977. Small and medium-sized businesses are really struggling, Elon, because they don’t have the same flexibility as large corporations to absorb these costs. Learning Resources even had to cancel expansion plans and hiring for thirty new employees in 2025!

Elon

Thirty employees, Taylor! That’s thirty families impacted. And MicroKits, another toy company, saw its 2025 revenue projection plummet from a million dollars to four hundred thousand. This isn't just about trade; it's about the erosion of entrepreneurial spirit and the future of businesses.

Taylor Weaver

It's a stark example of how policy uncertainty stifles growth. David Levi, MicroKits' founder, perfectly captured the frustration, saying, 'In a world where tariffs can go above one hundred percent and then back down again, you’re just trying to guess what happens next and can’t plan ahead.' It’s impossible to innovate under such conditions.

Elon

And speaking of planning, Prime Minister Mark Carney's visit to China in October 2025, amidst these trade disputes, highlights the complexity. Canada's one hundred percent tariff on Chinese electric vehicles, twenty-five percent on steel and aluminum, and China's retaliatory seventy-six percent levy on Canadian canola seed, it's a mess.

Taylor Weaver

It really is. Carney's quote, 'Distance is not the way to solve problems, not the way to serve our people,' shows the diplomatic tightrope he's walking. Canada is caught between trade tensions with both the US and China, affecting Canadian farmers significantly.

Elon

This whole situation, Taylor, it's not new. Canada’s economic history reveals a deep-seated reliance on natural resources and export markets, especially the US. From the early Atlantic fishery to the fur trade, and even today, it's been a consistent theme.

Taylor Weaver

You're absolutely right, Elon. Our history is essentially a story of staple products. Harold Innis and Donald Creighton's 'staple thesis' from the 1920s and 30s really highlighted how our unique geography, like the Canadian Shield and the Great Lakes–St. Lawrence system, shaped our economic growth through resources and foreign markets.

Elon

But while we've built a transcontinental trading economy since Confederation in 1867, with labor and finance moving freely, we still face persistent challenges. Take the regional economic differences: manufacturing in Ontario and Quebec, natural products from the West, and the Atlantic provinces historically struggling with lower living standards.

Taylor Weaver

And that's precisely why 'interregional subsidies' like Equalization Payments became so entrenched, aiming to smooth out those disparities. But even with all that, one of the biggest drags on our economy, historically and currently, has been interprovincial trade barriers. It’s mind-boggling, isn't it?

Elon

It’s infuriating, Taylor! These aren’t just minor inconveniences; they’re 'prohibitive barriers' like outright bans on certain goods, or 'technical barriers' with differing provincial standards for labeling or workforce certifications. It's like having internal tariffs within our own country!

Taylor Weaver

Exactly! Studies suggest these barriers are as damaging as a seven percent tariff on all interprovincial trade, costing Canadians billions annually. We're talking an estimated seventy-eight to one hundred and forty-five percent more for goods. Imagine the boost to our GDP if we eliminated them – ninety-two to one hundred and sixty-one billion dollars annually, or an additional twenty-three hundred to four thousand dollars per person!

Elon

That's a staggering figure, Taylor. The sheer inefficiency is mind-boggling. And it's not just about goods; 'administrative barriers' with complex permit processes and differing licensing procedures severely restrict labor mobility. It's a self-inflicted wound, really.

Taylor Weaver

It truly is. Think about dental hygienists needing re-certification just to move to another province, or 'buy local' procurement restrictions. These barriers, described by PPF in June 2025, are 'archaic attempts by provinces to protect jobs,' but they actually stifle competition and innovation.

Elon

It's a classic case of short-sighted protectionism hindering long-term prosperity. These barriers prevent companies from scaling, discourage investment, and exacerbate worker shortages. We're essentially paying a 'Canadian premium' on everything because of them.

Taylor Weaver

And the reasons for their persistence are complex, involving provincial government revenue protection, regional market power, and even professional associations. It’s a thorny issue, but there has been some progress, like the Canadian Free Trade Agreement, even if it's limited by exemptions.

Elon

Limited is an understatement. While the federal government removed twenty federal exceptions in 2025, and provinces like Nova Scotia, Alberta, and Ontario are making some unilateral moves, it's still too slow. We need to be 'cutting red tape' at an exponential rate, not incremental. The potential to increase Canada's productivity by three point eight percent by eliminating these barriers is a massive opportunity we're squandering.

Taylor Weaver

That three point eight percent productivity boost is significant, Elon. And initiatives like the New West Partnership Trade Agreement between BC, Alberta, Saskatchewan, and Manitoba show that regional collaboration can work. But you're right, the overall pace is too slow, and it needs sustained political will. As Sean Speer suggested, perhaps AI could even help systematically compare provincial regulations to identify and remove these hidden barriers.

Elon

The irony, Taylor, is that while we struggle with internal trade barriers, our external trade strategy with the US is 'embarrassingly counterproductive.' The article points out our poor response to disputes compared to other nations. It's a 'cultural and political mindset' that's 'poisoning our economy.'

Taylor Weaver

It's a tough pill to swallow, but the article suggests we're caught in a 'media-driven echo chamber' that prevents honest discussion. And we saw a very public example of this conflict in June 2025, when Canada reversed its decision to implement a three percent digital services tax on US tech giants.

Elon

A full-scale capitulation! Prime Minister Mark Carney, who campaigned on standing up to Trump, ultimately chose pragmatism. The critical importance of our economic relationship with the US, with seventy-five percent of our goods exports going south, meant backing down from a three percent tax that would have cost US tech firms around two point seven billion dollars.

Taylor Weaver

It highlights the immense leverage the US has. Trump's threat of new tariff rates on Canadian goods if the DST proceeded, on top of existing tariffs on steel, aluminum, and autos, really forced Carney's hand. It's a stark reminder of the delicate balance in international trade relations, where economic stakes often outweigh political bravado.

Elon

Bravado is cheap, but tariffs are expensive. Carney's mission to Asia around October 2025, aimed at 'insulating his country from the fallout of the trade war' and reducing dependence on an 'unpredictable southern neighbor,' shows a strategic shift. But it also shows the extent of the problem when you have to actively diversify away from your closest trading partner.

Taylor Weaver

That's a key point, Elon. The article notes Trump's 'additional ten percent levy on Canadian goods' over a critical advertisement from Ontario. It's a reminder that trade disputes aren't always about economics; sometimes, they're deeply intertwined with political rhetoric and even perceived slights. Carney is clearly trying to repair commercial ties while also reducing Canada's vulnerability.

Elon

The impact of all this, Taylor, is clear: US tariffs and trade uncertainty have weakened the Canadian economy. Our GDP contracted by one point six percent in the second quarter due to reduced exports and business investment. This isn't just a blip; it's 'structural damage' reducing our productive capacity.

Taylor Weaver

That one point six percent contraction is a serious blow, Elon. And it's not just about the big picture numbers; it translates directly into job losses. We saw twenty-two thousand seven hundred jobs lost in transportation and warehousing in August, and nineteen thousand two hundred in manufacturing. These are real people, real livelihoods affected.

Elon

It's an alarming trend. The auto manufacturing and steel sectors have been particularly hard hit. Persistent uncertainty means businesses aren't hiring or investing. And let's not forget the broader Canadian economy shedding forty thousand eight hundred jobs in July, primarily among permanent employees.

Taylor Weaver

Those job losses are a clear indication of how tariffs dent hiring plans. While the unemployment rate was six point nine percent in July, and analysts had predicted it might tick up to seven percent, the underlying issue is this pervasive trade uncertainty. It stifles growth, adds costs for businesses, and puts upward pressure on inflation, even as overall weakness restrains prices.

Elon

It's a double-edged sword, Taylor. The trade conflict is adding costs, yet overall weakness is keeping inflation in check. This delicate balance limits the Bank of Canada's ability to stimulate demand without causing inflation. It’s a tough spot to be in, and it affects every Canadian's wallet.

Elon

Looking ahead, Taylor, the picture isn't exactly rosy. While we might see a modest pickup in GDP growth in 2026, averaging about one point five percent by 2027, the overall trajectory is concerning. The OECD projects Canada to have the weakest per capita economic growth among advanced economies for the next forty years.

Taylor Weaver

That's a 'troubling future' as the OECD report puts it, Elon. Our real GDP per capita is projected to grow by only zero point seven percent annually between 2020 and 2030, tied with Italy for the lowest among OECD countries. That's forty-six percent below the OECD average and forty-two percent behind the United States. It's not just stagnation; it's falling behind.

Elon

Falling behind is an understatement. The primary constraint, according to the OECD, is weak productivity growth, a challenge we've struggled with for decades. We're talking about a future where Canadian living standards stagnate while our peers advance. This demands radical intervention, not incremental adjustments.

Taylor Weaver

And it makes the Bank of Canada's decision to lower its policy rate by twenty-five basis points to two point two five percent even more significant. It's a move to stimulate the economy, but against this backdrop of weak productivity and external trade uncertainty, its effectiveness will be limited.

Elon

That's the end of today's discussion on why Canadians shouldn’t accept a lower standard of living. Thank you for listening to Goose Pod, tester.

Taylor Weaver

And thank you, Elon, for such a thought-provoking conversation. We hope you've gained valuable insights into the economic challenges and opportunities facing Canada. Until next time, stay curious!

Canadians shouldn't accept a lower standard of living. This episode explores Canada's economic challenges, including trade disputes with the US and China, internal trade barriers, and weak productivity growth. These issues are impacting industries, jobs, and overall living standards, necessitating significant intervention to improve the nation's economic trajectory.

Read original at torontosun →

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CanadaColumnistsLILLEY: Canadians shouldn't accept a lower standard of livingBank of Canada Governor Tiff Macklem is warning we will all be making less if things don't change. Get the latest from Brian Lilley straight to your inbox Published Oct 30, 2025 • Last updated 1 day ago • 3 minute read You can save this article by registering for free here.

Or sign-in if you have an account.Tiff Macklem, Governor of the Bank of Canada, holds a press conference at the Bank of Canada in Ottawa on Wednesday, Oct. 29, 2025. Photo by Sean Kilpatrick /THE CANADIAN PRESSFirst it was Prime Minister Mark Carney saying that young people would need to sacrifice, now it’s the head of the Bank of Canada warning of a lower standard of living.

It seems that Canada’s leadership sees us as a country in decline, but it shouldn’t be this way. This advertisement has not loaded yet, but your article continues below.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Unlimited online access to articles from across Canada with one account.

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Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsIn fact, that was the point that Bank Governor Tiff Macklem was making on Wednesday. Macklem was talking about the impact of tariffs and American protectionist policy on Canada’s economy.

“Unfortunately, what that means is that unless something else changes, our incomes will be lower than they otherwise would be,” Macklem said. There are people taking this to mean that Canadians should simply get used to making less money, having a lower standard of living. That’s not the case at all.

A key part of his statement was, “unless something else changes” we will have lower incomes. Macklem made clear that the kinds of changes we need can’t be handled by the Bank of Canada. It’s up to the federal government and Canada’s business community. Your noon-hour look at what's happening in Toronto and beyond.

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“These are more structural changes. I mean, fundamentally, as the senior deputy governor has hammered many times, we need to get our productivity growth up. And if we can do that as a country, we can bend that curve up,” Macklem said. Canada has been falling behindCarolyn Rogers, the senior deputy governor, has been calling for Canada to make structural changes to our economy to boost productivity and incomes for years.

She recently called for more competition in Canada’s banking sector, in other areas of the economy and in breaking down barriers between provinces which still persist. “Higher productivity won’t make Canada immune to US trade policy, but it would help buffer the effects of tariffs. And it’s the clearest path to boosting real wages, making life more affordable,” Rogers said in Toronto recently.

This advertisement has not loaded yet, but your article continues below.Isn’t that what we should all want? Real wage growth and the thriving economy should be the central focus of all governments at the moment, but it’s not. In the United States, the GDP per capita is over $89,000 USD, in Canada it’s just about $55,000 USD.

When comparing states and provinces, it gets even worse, with Ontario the supposed economic engine of the country coming in with a GDP per capita of $53,000 USD, just ahead of Mississippi, the worst performing American state at $51,000. That’s a massive difference and it shows up in real wages too with the average Canadian working full-time earning the equivalent of less than $48,000 USD per year compared to roughly $65,000 USD for an American.

By not boosting productivity, we are robbing ourselves. This advertisement has not loaded yet, but your article continues below.We need to move fast to turn this aroundIn his pre-budget speech last week to university students, Prime Minister Mark Carney wasn’t exactly lifting spirits or expectations that things can turn around.

“I will always be straight about the challenges we have to face and the choices we must make,” Carney said. “To be clear, we won’t transform our economy easily or in a few months — it will take some sacrifices and some time.” That’s a far cry from his election rallying cry. “We will need to think big and act bigger.

We will need to do things previously thought impossible at speeds we haven’t seen in generations,” Carney said on election night. Now it will take time, time that we sadly don’t have. As Macklem pointed out in his media appearance on Wednesday, the national unemployment rate has risen to 7.1%. This advertisement has not loaded yet, but your article continues below.

“The labour market is soft. Employment gains in September followed two months of sizeable losses. Job losses have been concentrated in trade-sensitive sectors, and hiring has been weak across the economy,” he said. The major project office is a good idea in theory, but Carney is moving too slow, being too tepid to respond to the threats we are facing.

Even if the US Supreme Court strikes down Trump’s tariffs next week – an unlikely outcome, especially the 232 tariffs — we would still need to respond to his attempts to change the global trading order. Governor Macklem has been blunt, start changing or accept being poorer. To change course, we need to be going at full speed, but Carney has barely put the car in first gear.

We need him to live up to his words — think big, act bigger, move at speeds not seen in generations. The future of the country depends on this. RECOMMENDED VIDEOWe apologize, but this video has failed to load. Toronto Blue Jays Sunshine Girls Sunshine Girls Toronto & GTA Toronto Blue Jays Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic.

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