[homeles_ot-l] Alternative Federal Budget Economic and Fiscal Update FW: New from the CCPA

[Lynne Browne]

FYI… Lynne Browne

Coordinator, Alliance to End Homelessness (ATEH)
147 Besserer Street, Ottawa, ON K1N 6A7 
HYPERLINK "mailto:lbrowne at ysb.on.ca"lbrowne at ysb.on.ca,  613-241-7913 ext 205

www.endhomelessnessottawa.ca  

   _____  

From: Canadian Centre for Policy Alternatives
[mailto:newsletters-24=18462 at ccpanews.ca] 
Sent: November 26, 2008 12:55 AM
To: lbrowne at ysb.on.ca
Subject: New from the CCPA: Federal deficits could be much larger than
anticipated

 


HYPERLINK "http://NL92.PolicyAlternatives.ca?r_ID=18462"

 HYPERLINK
"http://www.policyalternatives.ca/images/banners/nl_leaves_general.jpg"


 

November 25, 2008


Dear friends and members,

Today the CCPA released HYPERLINK
"http://NL95.PolicyAlternatives.ca?r_ID=18462"Retooling Canadian Fiscal
Policy for the Coming Recession: Alternative Federal Budget Economic and
Fiscal Update. The report re-estimates the federal fiscal picture based on
four scenarios of economic downturn, from slowdown to major recession and
finds that deficits could be much larger than are currently anticipated.

According to the report, a mild recession in 2009 would create a very sm
HYPERLINK
"http://www.policyalternatives.ca/%7EASSETS/IMG/NL/CitizenHeadline.jpg"Ottaw
a Citizen front pageall deficit in 2008/09, followed by deficits of $12.6
billion in 2009/10 and $20.5 billion in 2010/11. A major recession starting
in the fourth quarter of 2008 and lasting through 2009 could produce
deficits of $1.4 billion in 2008/09, rising to $27.9 billion in 2009/10, and
$46.8 billion in 2010/11.

The report is generating quite a bit of media coverage, including the front
page of today's Ottawa Citizen. 

The news release for the report is pasted below. The entire report is
available for free download on our website at HYPERLINK
"http://NL96.PolicyAlternatives.ca?r_ID=18462"http://www.policyalternatives.
ca.

All the best,

Bruce Campbell, Executive Director

Canadian Centre for Policy Alternatives
410-75 Albert Street, Ottawa, ON K1P 5E7
tel: 613-563-1341 fax: 613-233-1458
email: info at policyalternatives.ca
HYPERLINK
"http://NL97.PolicyAlternatives.ca?r_ID=18462"http://www.policyalternatives.
ca


Federal deficits could be much larger than anticipated, says Alternative
Federal Budget


OTTAWA — While it is now generally acknowledged that the federal government
is headed for deficit in the coming years, a report released today by the
Canadian Centre for Policy Alternatives (CCPA) says those deficits could be
much larger than are currently anticipated.

The Alternative Federal Budget (AFB) Economic and Fiscal Update re-estimates
the federal fiscal picture based on four scenarios of economic downturn,
from slowdown to major recession. A mild recession in 2009 would create a
very small deficit in 2008/09, followed by deficits of $12.6 billion in
2009/10 and $20.5 billion in 2010/11. A major recession starting in the
fourth quarter of 2008 and lasting through 2009 could produce deficits of
$1.4 billion in 2008/09, rising to $27.9 billion in 2009/10, and $46.8
billion in 2010/11.

In January 2008 the AFB was among the first to raise the likelihood of
fiscal deficits due to the combined effect of Conservative tax cuts and
economic slowdown. This report is based on more pessimistic scenarios of a
recession than last week’s report by the Parliamentary Budget Officer. It
argues that the feds should accommodate deficits produced by the recession
and even go further with additional stimulative measures.

"The real underlying question now is not whether the federal government
should run a deficit but how large the planning deficit for 2009/10 should
be," says Marc Lee, CCPA Senior Economist. "The federal government has a
lead role to play in cushioning the impact of a recession, both through
federal programs and in partnership with the provinces."

To that end, the report outlines a six-point fiscal stimulus package that
recommends strengthening the EI program and other income support measures,
launching a major federal-provincial green infrastructure program, creating
a green manufacturing fund, and preventing home foreclosures.

"Government policy should be to prevent a large increase in unemployment
while strengthening EI and other supports to assist families and
communities," says Lee. "A danger is that Canada will be too timid or will
revert to less effective measures like tax cuts. Spending and infrastructure
investments are better targeted and deliver a stronger fiscal stimulus than
would further tax cuts, which are more likely to go to higher-income
families who may save rather than spend the proceeds."

The CCPA argues that Canada needs to do its fair share of a coordinated
global effort to fight the coming recession, so it must be bold. It notes
that Canada is well-positioned to do so and this also offers an opportunity
to retrofit the country’s crumbling infrastructure for a green economy.

Retooling Canadian Fiscal Policy for the Coming Recession: Alternative
Federal Budget Economic and Fiscal Update is available on the CCPA website:
HYPERLINK
"http://NL97.PolicyAlternatives.ca?r_ID=18462"www.policyalternatives.ca


You are subscribed to the CCPA's national email newswire service. If you
would like to be removed from this list, please go to:HYPERLINK
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ca/unsubscribe/ and enter your email address. 




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