The magic wheels of Prime Minister Trudeau are coming to a grinding halt as the Canadian economy flounders even with the proposed fiscal stimulus. Liberals claiming to steer the country from the darker eras of Harper are now in a fix as even the inclusion of child benefits in the budgets doesn’t seem to have an effect on the psyche of the people.
According to the latest survey by nano’s research group indicate that only a fraction of the total child benefit amount is being used by the household to pay the debts and bills. Moreover, only 8% of the people thought that there would be a deduction in the income tax.
Trudeau launched the fiscal stimuli program with great pomp and show but even after spending 12.3 billion dollars, the spending has not increased. People are apprehensive of the latest measures to boost the economy but Nanos think that the general population might be paying off debts for the first two months before spending money at the retail stores.
Canada has been facing recession since 2009 when the economy showed a negative growth trend resulting in further contraction. Bank of Canada would be starting down the barrel if the consumer spending doesn’t pick up in the coming months. In the case of no effect, it may have to take additional steps to revive the economy.
In the recent visit to China, the premier declared that households were already receiving the child benefits nevertheless the research still hasn’t delivered any positive result on the ground. Canada due to increasing in spending has won huge accolades from IMF but some economists criticize the move of Trudeau because it might increase the budget deficit.
Although the step is fraught with risks, the government needs to stimulate the economy in order to enhance the depressed demand. A huge budget was presented to encourage the spending but whether people would heed the call of Trudeau is to be seen.