Big spending is the main theme of Canada’s federal Budget 2009. The federal government says it will spend just over $43 billion on economic stimulus, spread out over the course of the next four years. The effectiveness of these recession-fighting measures will depend on how quickly programs can be implemented, as well as their respective impact on stimulating economic growth and job creation. Some highlights:
The Conference Board of Canada’s own forecast is more optimistic than what is contained in the 2009 federal budget. Our forecast calls for real GDP to contract 0.5 per cent in 2009, followed by a strong rebound of 3.6 per cent in 2010.
- The budget introduced a package of tax cuts and spending that will cost an expected $38.2 billion over fiscal years 2009–10 to 2011–12.
- The federal government now expects to run a cumulative deficit of $76.5 billion over the next three fiscal years.
- The Government of Canada will increase funding for infrastructure by almost $12 billion over the next two fiscal years.
- Budget 2009 extends modest fiscal stimulus to businesses, with the total increase in outlays ranging from $385 million in fiscal year 2009–10 and falling to $135 million by 2013–14.