Canada's Big Bet on Stimulus Draws Global Attention

ENLARGE

Canadian Prime Minister Justin Trudeau is betting that debt-financed infrastructure spending will lift growth.

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chris wattie/Reuters

By

Kim Mackrael

Kim Mackrael
The Wall Street Journal

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@kimmackrael

kim.mackrael@wsj.com

Updated Oct. 2, 2016 3:10 p.m. ET

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OTTAWA—In the global struggle to boost growth, a Canadian experiment in fiscal spending is providing a test case for some of the world’s biggest economies. Prime Minister Justin Trudeau’s Liberal government unveiled a plan last spring to spend heavily on tax benefits and infrastructure, with $120 billion Canadian dollars (US$91.39 billion) going into infrastructure over the next decade, including about one-tenth of that on short-term projects. It’s a bold bet to inject life into an economy struggling with a rout in commodity prices, especially crude oil, which was once Canada’s top export. It also highlights the limits of monetary stimulus, since the country’s central …