MARCH is often the cruellest month on the Canadian weather calendar and this March also promises a shift in fiscal climate as Ottawa moves to bring a $56-billion deficit under control.
To understand why Ottawa must move quickly to restore fiscal balance to its finances, one need only look back over the economic history of the last half-century. If we are to avoid a repeat of the fiscal crisis that engulfed Canada during the period 1973-1996, we need to take steps now to ensure that the recent deficit does not become the thin edge of a new debt wedge.
ONTARIO’S economy has been struck hard by the recession leading to a collapse in provincial revenue that combined with a massive increase in expenditure has helped raise its deficit to a historical high of $24.7 billion.
As a share of GDP, this deficit comes in at 4.4 per cent, which is the worst in Ontario's economic history edging out the previous record of 4.3 per cent in 1992 during the Rae Regime.