As a lousy economy tips Ottawa into deficit, will politicians face up to that fact?
He chopped the key overnight interest rate by 25 basis points to 0.5% in the hope it will stimulate Canada’s contracting economy.
But that’s the only thing the bank can do to stimulate an economy in recession. Poloz may quibble about using that term, but I’m with most experts who will call this spade a spade.
Finance Minister Joe Oliver, on the other hand, won’t even acknowledge the problem and, worse, won’t consider doing something to help.
“It is unfortunate that fiscal stimulus is off the table,” said Sherry Cooper, the former chief economist at BMO Capital Markets.
“Much-needed infrastructure spending should be increased as a proactive counter-cyclical measure that would be far more effective than a rate cut,” she wrote. “After the October election, fiscal stimulus will be essential.”