Some politicians have suggested that Canada enact a constitutional ame.docx

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Some politicians have suggested that Canada enact a constitutional amendment requiring the federal govemment to balance its budget anriually. Such an amendment, if strictly enforced, would compel the government to enact a contractionary fiscal policy whenever the economy experienced a severe recession. This is because when the economy enters a recession, net tax revenue falls and transfer payments rise. Balancing the budget would require lowering transfer payments and raising taxes. net tax revenue rises and transfer payments fall. Balancing the budget would require raising transfer payments and lowering taxes. net tax revenue falls and transfer payments rise. Balancing the budget would require raising transfer payments and raising taxes. net tax revenue rises and transfer payments fall. Balancing the budget would require lowering transfer payments and lowering taxes. .

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