The C.D. Howe Institute convened a meeting of prominent private sector economists on January 27, 1993 to discuss Canada’s seemingly chronic rising government and foreign debts. Some participants in the workshop argued that Canada was fast approaching a crisis point, where continued heavy borrowing might not be possible.
One message emerged clearly from the workshop. The damage to Canadians’ living standards of a fiscal retrenchment forced by an abrupt end to investors’ willingness to buy Canadian debt would be far greater than that of a timely, controlled budget-balancing process.
This Commentary provides a summary of the views and recommendations of conference participants.
Roger Martin, Dean of the Rotman School of Management at the University of Toronto, wrote in the Walrus that “Avoiding a Crisis captured the attention of the media and the public, and provided an impetus for the transformation of Canada’s fiscal policy, helping make “deficit” a dirty word.”