CANADA: Shot in the Arm

Canada, a nation envied by the world for her brimming postwar budget surpluses, sprang two startling fiscal surprises last week. For the first time in nine years, red ink appeared on the national budget and a $160 million deficit was forecast for the year ahead. But instead of belt-tightening to make up the shortage, Canada launched a bold tax-reduction program, slashing personal and corporation income and excise rates to put more money in circulation and give the country's economy a judicious shot in the arm.

Members of Parliament, troubled by increased unemployment and...

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