New Finance Minister Chrystia Freeland has already shown her colours by ramping up fiscal spending after just one day on the job, and her previous calls for a “new New Deal” to address inequality suggest she may soon push for even greater spending. The opinion polls imply most Canadians would support this more activist approach and, despite record debt issuance already this year, the government can still essentially borrow for free in real terms. All this means the stage is set for sustained deficit spending in the years ahead, which could cause GDP growth to be higher than we currently assume.
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