Canada makes a good argument for stimulus
The Trudeau government reached into the government coffers last year to deliver stimulus via infrastructure and child tax credits. Maybe it was lucky timing, maybe it was a good move but either way, Canadian growth as been much stronger than anticipated.
As a result, the fiscal year deficit was $17.8 billion in the final tally, significantly less than the $23 billion that was forecast in the spring. That's still a hefty hole in comparison to the $1 billion deficit the government inherited but 3.0% growth this year is a worthwhile return.
Revenues were down 0.7% while program spending rose 6%
Federal debt now stands at $631.9 billion which puts debt-to-GDP at 31.2%.
I believe more and more governments will fall in love with deficits so long as they are coupled with stimulus or tax cuts (depending on their leanings). Just last week we saw Ted Cruz abandon fiscal conservatism.
