Conservative MPs have taken the recent global economic downturn as an opportunity to roll out a new line of attack against the Trudeau government. They allege that the Liberal’s public spending has left the national “cupboard bare” in the face of economic uncertainty. The federal Conservatives are now calling for public spending cuts as a remedy.

Economists – however – say the Conservative request is not only unnecessary, but it is also dangerous.

Kevin Milligan, an economics professor at the University of British Columbia, refutes the notion that the “fiscal cupboard is bare.” According to Milligan, the Canadian government is well-positioned to respond to a recession situation.

Jean-Francois Perrault, the chief economist at Scotiabank, also refuted the Conservative talking point.

His colleague, Brett House, the deputy chief economist at Scotiabank reiterated the sentiment. “With interest rates at current levels, literally all of the federal and provincial governments in Canada can afford to provide additional fiscal stimulus to counter the oil price shock & coronavirus outbreak.”

Most experts prescribe the exact opposite of what Conservatives are calling for. During an economic slowdown, fiscal stimulus – that is increased public spending – is needed to give a boost to the economy. 

The federal Conservatives’ calls for public spending cuts not only fly in the face of expert knowledge, but they could also make a bad situation much worse.


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