I'm releasing a paper next Monday for The Macdonald-Laurier Institute. I'm making an argument along that line and putting forward, which no one has put forward thus far, to my knowledge, in Canada, an actual test. I'm not against deficits, but we talk about them and we say we need a deficit and we say we have to stimulate, but nobody explains when or why or how. What we're doing in this short paper is arguing that deficits are necessary and useful in extreme circumstances, so we put forward a test and we give examples—the Depression, 1980-81, 2008-09—when there is a national systemic collapse or dramatic decline in the economy.
If the economy is growing—which it is right now, at 1.5%, and it's scheduled to go to 2%—as I said on The Exchange last night, and forgive me for quoting myself, “Crisis? What crisis?” It's like the Supertramp album. Where is the crisis?
There is a crisis in Alberta. I'm not trivializing Alberta and the problems of Alberta. That calls again for a targeted solution, and I have no problem with targeted solutions. The GIS improvement from your government is a great idea. It's targeted.
To answer your question about the deficits, in this short paper we are arguing that the current economic conditions do not meet the test. We're growing at 1.5%. Are we just going to say, every time we are unhappy about the growth rate, “That's it, we have to go into deficit and stimulate like crazy”? There should be an objective, principle-based test. We're arguing that you have to have negative GDP; it has to be systemic across the whole country and not regional in orientation; and it must be a very dramatic decline—not something hovering around minus 0.1%, but a systemic, dramatic, sustained decline nationally. That's when you stimulate. The year 2008-09 had the most recent example of that situation, and today those conditions are not being met.