I haven‘t yet fully read and digested the latest Canadian Federal budget but so far I find it to be a realistic and progressive assessment of the likely course of the Canadian economy over the next year. Unemployment although at its lowest point in four decades could still be lowered further and may well be, provided the trade disturbances on a global scale do not spread and undermine economic growth. This is equally true of the Bank of Canada. Given the low petroleum prices and overall inflation low at 1.9 % there is absolutely no reason for the Bank to raise interest rates and thereby prevent unemployment from falling lower.Currently unemployment is 5.8%.The private sector banks and financial houses project unemployment to rise to 6 % the budget projects 5.9 %. The federal debt to GDP ratio, the only sensible measure of debt burden is low, stable at roughly 30.8 % and slowly falling over the next three years projected to fall to 29.3 % by 2022. The government proposes a. number of detailed progressive expenditures on seniors, millennials ,indigenous peoples, infrastructure and social policy generally and I will comment on these in further posts after I have finished reading the budget papers.
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