IMF Announces Support For Canadian Budget Reforms

by Amanda Banks, Tax-News.com, London

24 December 2010

The International Monetary Fund’s recently published annual review of Canada’s economic developments and policies has praised the government’s fiscal plan to return to balanced budgets over the medium term.

In its Article IV consultation with Canada, the IMF commends the government for the credible framework for macroeconomic policy, its strong policy response to the crisis and the resilient financial system, all of which have enabled Canada to exit the crisis on a strong footing.

Welcoming the publication of the report, the Canadian Minister for Finance, Jim Flaherty, said:

“It is particularly encouraging to see the Fund’s favourable assessment of our fiscal plan. The report notes Canada has weathered the global recession well, reflecting both its strong fiscal position before the crisis and its significant fiscal stimulus during the crisis. Labour markets have been a particularly bright spot, the report said, with Canada being the only Group of Seven (G-7) country to both recoup the jobs lost during the recession and make year-over-year employment gains.”

“The report provides strong support for our plan to return to budgetary balance and commends the recent decision to extend the deadline on some infrastructure projects.”

“I also welcome the IMF’s strong endorsement of the government’s policies to promote Canada’s long-term growth prospects, notably infrastructure spending, corporate income tax cuts, and progress towards implementation of a Canadian Securities Regulator.”

The IMF report also lauds the Canadian financial system, noting that its resilience has been a key factor in Canada’s strong economic performance.

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