NCPA - National Center for Policy Analysis

Canada’s Fiscal Success Story

November 1, 2012

Canada's financial success is one that U.S. policymakers can learn from. Between 1995 and 1998, Canada went from a $32 billion deficit to $2.5 billion budget surplus.  There are six lessons for American politicians to learn from Canada as it seeks to reduce its own deficit, says Brian Lee Crowley, managing director of the Macdonald-Laurier Institute, a public policy think tank in Ottawa.

  • First, all political parties must tone down the rhetoric against each other to work together to solve the crisis.
  • Second, no favorites can be played.
  • Third, time is of the essence. Piecemeal reforms fail to capitalize on the consensus to fix the deficit.
  • Fourth, spending cuts allow the beneficiary to bear some burden. Every program should be tested using clear criteria.
  • Fifth, make cutting the deficit a national priority so that the public can rally around it. This makes it easier to get support for difficult reforms.
  • Finally, it is possible to make these cuts without political drawback. For instance, Prime Minister Jean Chrétien introduced these changes in Canada but was still able to get reelected in 1997 and 2000.

Source: Brian Lee Crowley, "Canada's Fiscal Success Story," Washington Post, October 28, 2012.


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