Anyone for Deficits?

In the late fall of 2008, the Harper government was nearly replaced by a Liberal-NDP coalition with Bloc Québécois support. This coalition, essentially without precedent in our national politics, was noteworthy in itself. But equally remarkable was that the coalition organized itself according to the position that the federal government should incur a stimulative fiscal deficit to address a rapidly declining economy. Coalition leaders argued that Jim Flaherty’s economic and fiscal statement did not respond to Canada’s economic reality and that the government did not deserve the confidence of Parliament. The government was saved by the governor general’s decision to grant the prime minister a prorogation of the House of Commons, and when Parliament reconvened, Flaherty introduced what he referred to as a stimulative budget that projected deficits worth a total of $64 billion over the next two years.

This was a startling turnaround. After years of running from...