Economy tanked in 1990s: report
Despite a recent upturn, the Canadian economy turned in its worst performance this decade since the Second World War, say Toronto-Dominion bank economists who blame high government deficits and debt for the economy's below-par performance.
Even with recent gains, average annual gross domestic product growth in the 1990s was just 2.1 per cent, says TD Senior Economist Marc Levesque in the bank's latest report, "Better Prospects for Canada's Economy in the Next Decade."
That's nearly one per cent less than the average pace set in the 1980s, and more than three percentage points below 1960s levels.
The TD economists blame high public-sector deficits and debt, and then the cutbacks in government spending that followed as governments balanced their budgets in the second half of the 1990s, for the slowdown.
"In addition, consumers paid a high price, as their income-tax burden rose steadily, reaching an all-time high in 1999," adds Levesque.
The good news is that Canada's prospects for the next decade are much brighter.
"[The] next decade is shaping up to be much better than the 1990s in terms of Canada's economic performance," says Levesque, noting that the severe imbalances that hurt the economy at the beginning of the 1990s are no longer a drag on Canada's prospects.