To ensure that we fend off a prolonged recession in Canada, our governments should focus on maintaining adequate domestic demand and ensuring that firms have sufficient access to credit.
Fending Off a Canadian Recession: What More Can Be Done?
Fending Off a Canadian Recession: What More Can Be Done?
Canadian Economic Analysis
Industry Economic Analysis
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To ensure that we fend off a prolonged recession in Canada, our governments should focus on two areas: maintaining adequate domestic demand and ensuring that firms have sufficient access to credit.
The bigger issue related to maintaining domestic demand is whether, and how, our governments should shift from passive to active fiscal policy. Fiscal action that is targeted at regions and sectors in need would be valuable. Regardless of the measures taken, our governments must establish a credible plan to return to fiscal balance as quickly as is practical.
The federal government should take the lead on expediting the flow of credit to the private sector. If governments choose to take this route, they will have to ensure that the firms have a credible business plan to warrant the extension. Governments should also make more use of existing public-sector financial institutions to help fill the financing gaps in the marketplace.
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