In anticipation of the federal government’s fall economic update on Thursday, economists and industry groups across Canada are calling for fiscal stimulus to aid the ailing economy.

Finance Minister Jim Flaherty has warned Canadians not to expect any new economic stimulus measures in the update, but economists are urging him to reconsider.

It would be in the economy’s best interest to act now rather than waiting until next year’s federal budget to implement fiscal stimulus, according to CIBC World Markets economist Avery Shenfeld.

“By injecting government spending directly into the economy, or giving a boost to the spending power of those who can’t afford to save, the numbers can be made to look a little brighter,” wrote Shenfeld in a recent economic update report.

“Given the lags, it would be better if we weren’t waiting until Obama takes office in late January, or a Canadian budget in February, to get on with that task.”

BMO Capital Markets chief economist Sherry Cooper agrees. “Just as Washington is taking extraordinary steps to ballast financial institutions, non-financial businesses, households, and state and local governments, Ottawa should be preparing for a ‘worse case’ scenario — plan for the worst and hope for the best. Politics and ideology must be set aside so that actions can be taken quickly,” she wrote in a recent report.

“I urge Ottawa to implement a stimulus package as soon as possible.”

Many industry groups are encouraged by Flaherty’s commitment to accelerate infrastructure investments.

A report by the Canadian Chamber of Commerce calls for widespread investment in transportation infrastructure, which it says will both bolster the economy and enhance Canada’s competitiveness.

“Growing international competition, increasing global supply chains, and the changing Canadian economy make the adoption of a national transportation strategy essential to ensure the competitiveness of Canada. We call on the Government of Canada to develop a national transportation strategy,” said Perrin Beatty, president and CEO of the Chamber of Commerce in a statement.

A transportation strategy is particularly important for trade, according to Gordon Houston, president and CEO of Port Metro Vancouver.

“The transportation system is an economic engine for the Canadian economy, and we must develop the most effective multi-modal transportation system for the movement of goods and people,” he said.

The Canadian Urban Transit Association is calling for stimulus in the form of public transit investment of $40.1 billion over the next five years.

“The time is now to launch an economic stimulus package by funding transit projects,” the association said in a release on Tuesday.

The Federation of Canadian Municipalities also encourages spending on infrastructure.

“Timing is everything when it comes to fighting a recession,” said Jean Perrault, president of the Federation of Canadian Municipalities and Mayor of Sherbrooke. He said the government’s existing Building in Canada Fund is hampered by extensive paperwork requirements that are preventing new projects from getting started in time for next year’s construction season.

“What we need now is to fix this program so that the BCF can be put to use creating the new jobs and economic boost that our country needs in the near term,” he said.

IE