Why Fiscal Policy Matters for Canadian Prosperity

This paper makes the case that fiscal policy should be treated as central to Canada’s long-run prosperity rather than as a narrow technical question about budgets. Ragan starts from Canada’s strengths, including strong institutions, social stability, and a highly educated population, but argues that the country now faces a cluster of economic challenges that fiscal choices will shape directly. Those challenges include falling per-capita output, weak productivity growth, rising inequality, deteriorating housing affordability, pressures around resource development and climate commitments, and new risks created by U.S. protectionism.

Rather than offering a single headline fix, the paper lays out a broad fiscal agenda spanning taxation, public spending, transfers, deficits, and debt. It calls for serious review of the tax system, better program evaluation, closer scrutiny of business subsidies, clearer thinking on federal-provincial transfers, and more disciplined management of debt and deficits. Its larger point is that prosperity depends on the cumulative quality of many fiscal decisions, and that Canada will need more deliberate, better-designed policy if it wants stronger growth, greater resilience, and a more durable social contract.