The IMF and Canadian Fiscal Policy

This is quite interesting. If you read the short section from the recent IMF Staff Report on Canada under point 16, it is quite clear that the IMF Staff think that, with growth significantly under potential, the federal Budget should be brought back to balance more slowly than is now the plan. It strikes me as unusual that they flag up a difference of view with Department of Finance officials.

The staff report goes a bit further than the resulting IMF recommendation that expansionary fiscal policy be used if the economic situation should significantly deteriorate.


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