The pandemic has kicked Canadian government debt to high levels. Federal and provincial budget plans could well see it go higher for decades and even generations. The 2021 federal budget demonstrates the sensitivity and fragility of Canada’s fiscal prospects. In this E-Brief, we explore...

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...