Budget 2016 is being developed at a difficult time for Canada. The world economy remains unsettled and unusually risk-prone, the prices for many of Canada’s leading export goods have fallen sharply, and the efficacy of monetary policy is under critical scrutiny after a long period of record low interest rates. Looking further ahead, Canada faces long-term economic and fiscal challenges stemming from population aging, a secular slow-down in workforce growth, lagging productivity, and the ongoing forces of globalization which appear to be concentrating wealth and high-value economic activity in a handful of jurisdictions. With a strong political mandate, the new federal government is in a position to define an economic policy agenda that responds to these domestic and global trends and helps to strengthen the country’s growth potential and while also improving the prosperity of Canadians.
