March 2020
BE DECIVESS MR. MORNEAU
Early this week the Prime Minister announced that new policy measures to address the COVID-19 virus would be released on Wednesday. Expectations were high that he would respond with a substantial package of policy initiatives to support Canadians and the economy.
THE GLOBAL VIRUS RECESSION
In 2008, the global economy was shocked into a recession by a meltdown in global financial markets. G-20 leaders reacted quickly to the deteriorating economic situation with a coordinated fiscal policy response. The International Monetary Fund encouraged those countries that had the fiscal flexibility to implement fiscal measures amounting to 2 per cent of the their economies. The resulting fiscal stimulus went a long way to mitigate the impacts of the global recession.
Read MoreA LARGE DEFICIT IS INEVITBLE BUT VERY MANAGEABL
Right now, federal, provincial, and municipal governments, the private sector, and all Canadians are implementing a counter-cyclical policy aimed at “shutting down the economy” in order to halt the COVID-19 virus. Successful implementation of this policy is critical to eventually restarting the economy. This is true of fiscal costs will be temporary and manageable. They are not something to worry about now.
