Hold out for Canadian cash

It appears the federal government is preparing us for a future fiscal deficit.

The current worldwide economic meltdown has Prime Minister Stephen Harper’s Tory government mulling over the possibility of a dreaded “deficit.” There is no worse word in the fiscal conservative vocabulary.

A balanced budget is the best option - if there is still, indeed, an option.

The word is past Tory tax cuts have helped the corporations get in good stead to survive the anticipated downturn. That’s plausible - except our battered manufacturing capacity continues to be increasingly incapacitated.

Again, that’s due to a lot of issues – NAFTA, Kyoto Accord demands, the changing world market.

International trading partners and economists note Canada’s unique situation, the result of good fiscal management in recent years (as well as our century or more old Scottish-based, nation-wide banking system). Lower taxes didn’t hurt.

As well, closer to home, the cuts to the GST do feel good each time you buy something, from a hot dog to a house.

As far as government deficits are concerned, it depends at what the gold has been flung. If we go into deficit for infrastructure costs, it’s a physical investment we can see and use. We need new and upgraded structures, airports, roads and railways; as well as public transportation system rolling stock – things that were left to go to ruin in many cases, and for a number of reasons, over the decades.

At least the Tories understand the infrastructure expenditures will spark some economic growth in the short term, as well as greater development in the long term, when the financial funk dissipates. Development follows greater physical accessibility.

Then things – including tax dollars – can be left to accumulate.

Until then, hope your financial managers were spry in moving your investments into better territory to weather the situation.

We’ll see just how good our Canadian financial system is, and how it survives.