Need for growth and jobs trumps ending stimulus spending
Facing ongoing global financial woes, Canada’s Finance Minister Jim Flaherty has been forced to rethink plans to use his next budget to put an end to stimulus spending. With the country’s record federal budget deficit ($100 billion-plus over two years), Flaherty had said for more than a year that he would shut off the stimulus spending tap as of March 31. But now, Flaherty says the restraint strategy conflicts with Canadians’ worries about the weakness of the recovery. “What I’m hearing really sounds a lot to me like cautious restraint,” he said. “Nothing draconian is being asked for. People
do want us to move toward a balanced budget, but they do not want us to do that at the expense of jobs and growth and the economy.” Flaherty is now describing the upcoming budget in February or March as a “pragmatic” set of policies that will balance the need for economic stimulus with the need to begin emphasizing government restraint in Ottawa. The government will also continue Ottawa’s main infrastructure program—the seven-year, $33 billion Building Canada fund.