Government fiscal policy refers to the use of spending and taxation programs to influence aggregate demand and thus the performance of the economy. In Canada, the federal government usually releases its budget sometime in early February. In recent years, high debt loads by the federal and provincial governments have focussed public attention on how governments spend tax payers' dollars given the cutbacks in social programs, particularly education and health care. In this part of the course, attention will be given to government budgets, calculating the debt and an examination of the role of government in the market economy.
Budget Deficit
Government Spending > Tax Revenues in given fiscal period
Balanced Budget
Government Spending = Tax Revenues in given fiscal period
Budget Surplus
Government Spending < Tax Revenues in given fiscal period
National Debt:
Debt owed by government to creditors, including bonds
and treasury bills since a country's inception
Automatic Stabilizers (HL Economics)
Visit this page to develop a better understanding of how automatic stabilizers operate to stabilize the business cycle.
Federal Budget Information
What is the budget?
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Who writes the budget?
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The Federal Budget is the annual statement
delivered by the Minister of Finance in the House
of Commons explaining how much money the
government expects to receive through taxes and
other sources, and how much it plans to spend
on programs and services, such as health care, or
helping unemployed people, for example.
The budget sets out a plan to ensure that there is
enough money to pay for the programs and
services that Canadians value, including pensions
for senior citizens and peace keepers in the
world's trouble spots.
Often the budget outlines the changes that will be
made to the rates of tax Canadians will pay and
the different programs and services that will be
available to them. For this reason, the budget is a
very important document and is usually watched
and studied closely when it is released.
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The Department of Finance is the principal
author of the Federal Budget. The policy analysts
in the department collect and study ideas and
opinions on the many different ways to make
sure Canada's finances operate in the best way
possible.
However, the Department of Finance often
consults other federal government departments,
other levels of government, such as the provinces
and territories, and many other Canadians. For
example, many students contact the department
with questions and suggestions. These suggestions
are studied and are sometimes used in the budget.
The budget is put together after many meetings
between the government and Canadians from
across the country and from all different walks of
life. These meetings are called "Pre-Budget
Consultations".
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Resources
Department of Finance Canada (get updated information on recent federal budgets)
Canada's 2023 Fiscal Update - Read the following article ("Canada's debt
charges are ballooning ....") detailing our growing debt in the post-Covid era
Ontario Government Budgets (get updated information on recent provincial budgets)
City of Toronto Budgets (get updated information on recent city budgets)
Keeping Tabs on the Debt Crisis
Check out Canada's projected national debt in real time here!
- for an overview of Ontario's debt picture, take alook at this
recent news article from the National Post
Check out the U.S. projected national debt in real time here!
- for an overview of US national debt and which countries own
biggest share of US debt click here
Global Debt Clocks
- for an overview of the debt levels faced by the key players of
the global economy visit global debt clocks
