Friday, December 5, 2008

Conservatives scared into earlier action

Opposition parties force Conservatives to move up budget 2 months earlier

The intent of the Opposition was to help Canadians this winter with an economic stimulus package and they were partially successful.

The Conservatives did not plan to introduce any new measures to stimulate the economy until the next budget is tabled in March 2009. Flaherty says no economic stimulus package to come in economic update Nov 24, 2008
Why scaring the Conservatives into action is a good thing for Canada:
One of the key forecasters that the federal government depends on to crunch its budget numbers says Finance Minister Jim Flaherty's update last week would extend the country's recession and exacerbate the threat of deflation.

In last week's fiscal update, Mr. Flaherty argued that his previous tax cuts are stimulating the Canadian economy by about $31-billion - and that's why he didn't have to take additional measures right away, even though his own forecasts show the economy is set to contract this quarter and the first quarter of next year.

That's faulty math, counters the Centre for Spatial Economics, one of four firms the Department of Finance depends on to provide thorough economic forecasts upon which the government's budget track is based.

"This is a fantasy," said Robert Fairholm, the centre's director of economic forecasting. "Most of the short-term stimulus from these measures have already boosted economic activity, and so will not continue to provide [a] short-term jolt to growth."
Flaherty's plan prolongs the pain, forecaster says - Report alleges minister's math is flawed Heather Scoffield, Dec 4, 2008
Canadians lost 71,000 jobs in November – almost triple expectations – and the unemployment rate crept up to 6.3 per cent, Statistics Canada said Friday. That's the biggest month of job losses since the recessionary period of 1982, and puts the unemployment rate at its highest point since November 2006. Canada loses most jobs in 26 years Heather Scoffield, Dec 5, 2008