Not every country appreciates the International Monetary Fund’s tutelage. Canada, however, is the teacher’s pet.
Prime Minister Justin Trudeau and Finance Minister Bill Morneau invoked the IMF’s new thinking on deficits to justify their decision to borrow heavily to finance tax cuts and infrastructure spending. The fund’s managing director, Christine Lagarde, took note. She now cites Canada as a rare example of a country trying to do something positive for the global economy.
It is easy to support the IMF’s teachings when they show the austerity drive of the governing party you’re are trying to beat is bad for the economy. But will Trudeau remain a good student when the fund points the flaws in some of his own programs? We are about to find out.
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