Challenges Facing The Federal Government Essay
Canada currently faces a number of significant fiscal challenges that require leadership, strategy, and a commitment to take the actions needed to protect the country’s future prosperity. This briefing note outlines the greatest fiscal challenges facing the federal government and offers recommendations for addressing these issues. Declining commodity prices around the world, along with one of the world’s strongest links between oil production and currency (McNeely, 2015) places the country at considerable risk. An economic slowdown in China has led to a major decline in global commodity prices. At the same time, geo-political conflict has led to some OPEC member states like Saudi Arabia flooding the market with oil in an attempt to keep prices low and gain competitive advantage over other producers around the world, including those in North America (Esparza, 2015). To address these significant fiscal challenges, the federal government should look to adopt a more active fiscal policy and lower interest rates to keep export prices low and boost exports. Additionally, tax incentives to drive diversification of the country’s commodity-intensive economy are needed to promote long-term stability and economic growth over time.
At present, the country’s overall economic outlook is relatively poor (Bararia, 2015). Despite Canada avoiding much of the devastation experienced elsewhere as a result of the global financial crisis of 2007-2009, Canada’s economy is now…