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The Characteristics of Fiscal Policy in Canada

Author

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  • Ronald D. Kneebone
  • Kenneth J. McKenzie

Abstract

We employ a methodology that distinguishes between discretionary and non-discretionary changes in provincial and federal fiscal policy. We find substantial variation in the discretionary policy of Canadian governments, across both time and jurisdictions. We uncover a marked asymmetry in the composition of discretionary fiscal stances. Fiscal retrenchments have tended to be dominated by a "balance" between spending cuts and tax increases, while fiscal expansions have been largely expenditure dominant. This asymmetry suggests a historic bias toward expanding the size of the public sector. The most recent fiscal retrenchment at both the federal and provincial level (1993-1996) breaks from this historical tendency by being largely expenditure dominant.

Suggested Citation

  • Ronald D. Kneebone & Kenneth J. McKenzie, 1999. "The Characteristics of Fiscal Policy in Canada," Canadian Public Policy, University of Toronto Press, vol. 25(4), pages 483-501, December.
    • Handle: RePEc:cpp:issued:v:25:y:1999:i:4:p:483-501
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    References listed on IDEAS

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    1. Olivier Jean Blanchard, 1990. "Suggestions for a New Set of Fiscal Indicators," OECD Economics Department Working Papers 79, OECD Publishing.
    2. Alberto Alesina & Roberto Perotti, 1995. "Fiscal Expansions and Fiscal Adjustments in OECD Countries," NBER Working Papers 5214, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Sebastian Hauptmeier & Martin Heipertz & Ludger Schuknecht, 2007. "Expenditure Reform in Industrialised Countries: A Case-Study Approach," Fiscal Studies, Institute for Fiscal Studies, vol. 28(3), pages 293-342, September.
    2. Ron Kneebone & John Leach, 2001. "The Accumulation of Public Debt in Canada," Canadian Public Policy, University of Toronto Press, vol. 27(3), pages 297-312, September.
    3. J.C. Herbert Emery & Ronald D. Kneebone, 2008. "Socialists, Populists, Resources, and the Divergent Development of Alberta and Saskatchewan," Canadian Public Policy, University of Toronto Press, vol. 34(4), pages 419-440, December.

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    More about this item

    JEL classification:

    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus

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