In this chapter, Jim Stanford agrees that measures were needed to eliminate the deficit. But he argues that Paul Martin's program spending cuts were larger than necessary and caused real pain in many areas of Canadian life. He shows that a strategy in which program spending was frozen in nominal...

In this chapter, Peter Dungan investigates the sensitivity of Canadian government fiscal balances to alternative long-run productivity growth rates using elements of the FOCUS macroeconometric model to conduct simulations on a 'base-case' projection of the Canadian economy, and of its fiscal...

In this chapter, Don Drummond makes the case that with large deficits there was little room for the Bank of Canada to reduce interest rates to stimulate the economy and generate revenues. It was imperative that the deficit be eliminated. Tax rates were already high so the government had no...