Paper 2: Canada has Fallen
Canada has fallen. A government that does not have to earn your trust is not held accountable. Left unchecked, the decay compounds. No mechanism inside the system reverses it. What follows is why.
In the 1990s, one income, a teacher, tradesman or nurse, supported a family. A house with a yard. Annual vacations. Summer camp. 30 years later, that income does not support that lifestyle. Two incomes often do not either.
You did everything right. You are 35. Two professional degrees. You cannot afford a townhouse in Calgary where you were born. You have postponed having kids because you cannot yet afford them. Your father, a tradesman, watches his paycheque buy less every year. Your parents paid into healthcare their entire working lives. Now they wait eleven hours in an ER. Your brother avoids downtown Edmonton after dark, stepping around the people the system stopped treating. You are poorer at 35 than your parents were at the same age. Your story is ubiquitous. Nations follow a pattern before they fall.
Ray Dalio's Principles for Dealing with the Changing World Order (2021) describes a recognizable arc that nations and empires follow over roughly 250 years. The early stages are built on sound money. Education. Innovation. Productivity. Competitiveness. The late stages share a consistent pattern. Public and household debt grow faster than productive output. The state, unwilling to default and unwilling to cut spending, debases the currency to service obligations. Asset prices inflate. Wages stagnate. Wealth gaps widen. Populism and polarization rise. Distrust of institutions spreads.
Canada sits in the late stage of this playbook. Federal debt has roughly doubled since 2015 from $616 billion to over $1.2 trillion. The Bank of Canada created new money at record scale from 2020 to 2022, becoming the largest buyer of the very debt Ottawa was issuing. Ottawa used immigration to paper over falling productivity with new consumer demand for food and house, willfully making Canada more expensive for everyone living here. You feel the result.
In 1985 the average home cost 3.5 times household income. Today it costs 7 to 9 times in most cities, over 10 in Vancouver and Toronto. A multiple of 3 to 4 is affordable. A multiple of 7 transfers wealth from young families to existing homeowners, banks, and government coffers. Real wages have grown roughly 0.5 to 1 percent a year for two decades. Canada added 1.27 million residents in 2023, the largest single year increase in Canadian history, against 240,000 new housing starts, five new residents for every unit built. (Statistics Canada)
Asset inflation. Wage stagnation. Social fraying visible on any downtown street.
The federal government spends about $530 billion a year today, against $175 billion in 2000-01. Three times, or $355 billion, more, after twenty five years. The state of the nation is worse.
Some of the $355 billion bought size, not service. The federal public service grew 43% since 2015. Canada's population grew less than 15%. (University of Saskatchewan)
Capacity went the same way. Just over $63 billion was spent on defence in 2025, hitting NATO's 2% of GDP target for the first time since around 1990. Yet only 40% of the air force's fighter fleet was serviceable as of early 2025, and nearly a quarter of the army's soldiers are not fully trained. The equipment is old. (National Security Journal) (DND 2026-27 Departmental Plan) Health transfers are approaching $55 billion a year to the provinces. The median wait for care has gone from 9.3 weeks in 1993 to 30 weeks today. (Fraser Institute)
Some of that $355 billion bought the opposite of what it was meant to buy. Roughly $561 million was spent annually on homelessness since 2018, a 374% nominal increase over the prior decade. (PBO) Unsheltered homelessness, tents and encampments, doubled anyway, from 14% of the homeless population in 2018 to 28% in 2024. (Housing Infrastructure Canada)
Institutions meant to build something also went backward. $1.5 billion went to the CBC in 2025, the $1.4 billion parliamentary grant plus a $150 million top up. Its English television audience fell from 7.6% of prime time viewers in 2018 to 4.4% today, weekly viewing hours down from 35 million to 16 million in less than a decade. (Macdonald-Laurier Institute) Another $4 to 5 billion went to university research, granting councils, Canada Research Chairs, scholarships. Canadian productivity fell 0.8% a year from 2015 to 2023. American productivity grew nearly twice as fast over the same period. (OECD)
The rest bought neither size nor outcome. It bought debt. Now over $1.2 trillion, $54 billion of interest payments alone this year. Money that buys zero services, now rivaling the entire defence budget.
Each failure sits in its own department, reviewed on its own terms. Nobody adds them up. Immigration policy does not ask what it costs housing or policing. Education policy does not ask what it costs mental health services downstream. The pattern appears everywhere Ottawa builds anything.
Canada's federal payroll system, Phoenix, estimated as a $310 million project ultimately cost taxpayers over $3 billion. It also took nearly a decade to remediate, with civil servants missing paycheques for months.
The ArriveCAN app, intended for digitally collecting traveller health and contact information during COVID-19, cost an estimated $60 million, 750 times the $80,000 budget.
Trans Mountain, the pipeline carrying Alberta oil to the west coast, was meant to be built privately. Estimated at $5.4 billion in 2013, the project stalled under federal regulation. Ottawa bought it in 2018 and built it anyway, at a cost of $34 billion, six times over budget.
This is pure incompetence. Incompetence that is not accepted in any other place of work - and incompetence costs you money.
Violating your right to privacy costs you even more.
In May 2026 the federal government proposed legislation, Bill C-22 the Lawful Access Act. It requires Google, Meta, and other tech companies to build back door access into your data. The stated purpose is law enforcement access. A backdoor does not ask permission. Once it exists, it exists. The bill is still moving through Parliament. Whoever holds that key knows what you say, who you say it to, and when.
Debt grows. Money is created to cover it. Wages stay flat while assets inflate. Spending triples while results worsen. That is the cost of incompetence.
Streets feel less safe. Immigration outpaces housing and law enforcement alike. That is the cost of a government that will not say no.
A backdoor into your phone is a third cost. The cost of a government that no longer answers to you.
Inside the system, this is unfixable. The incentive structure that produced the decline will keep producing it. The fix is to step out.
Federalist defenders argue the problems are reformable. Elect a different government. Reverse the bad policies. This has been tried. Stephen Harper governed federally from 2006 to 2015. Federal debt as a share of GDP fell modestly. Some programs were trimmed. Carbon pricing was avoided. The Trudeau government was elected in 2015 and undid most of it within 18 months. The structural arithmetic of Canadian federalism did not change.
A different federal government slows the trajectory temporarily. It does not change it. The coalition that benefits from the current arrangement outvotes any reform coalition, regardless of who Albertans send to Ottawa. Large urban concentrations in Ontario and Quebec. An entrenched federal bureaucracy. Public sector unions. Recipient provinces. The math of Canadian federalism gives Alberta a structural minority vote in a Confederation built around central Canadian interests. Reform inside the system requires the consent of those who profit from the status quo. They will withhold it.
Some Canadians point to other countries and say it could be worse. That is true. It is also irrelevant. Canada is declining relative to itself.
The failure is structural. A system that cannot reform itself yields to something built from outside it.
Reform is the wrong question. The right one is how Albertans can build something new.
Two paths lie ahead. Paper 3 takes up this topic.
