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This article focuses on Canada and the budget proposed by Finance Minister Ralph Goodale. Last week, after Goodale tabled this year's fiscal blueprint, it was tough to find anyone peddling a convincing rant among the lobbyists and special interest groups camped out in the annual budget-reaction bazaar. Amid the sunny spending promises and surplus projections, Goodale slipped in a bit of anxiety: America is not what it once was. How much do the American elephant's ailing economic fundamentals threaten the fiscally healthier Canadian mouse? "The American situation," Goodale warned in his otherwise celebratory speech, "could lead to higher interest rates, slower U.S. growth and a further depreciation in the American dollar -- any of which could negatively affect us here in Canada." While Goodale acknowledged the dangers posed by the precarious U.S. situation, his working assumption is that this year and next will be good times. Other key budget measures can also be viewed through the lens of the Canada-U.S. relationship, economic and otherwise.

This article discusses how the provinces in Canada will probably spend more money on education when they should be spending less. As the provinces gear up to introduce their budgets, you can bet your last tax dollar that many finance ministers will justify ramped-up spending in education as an investment in the future. A good education system is vital, of course, but in fact provincial governments now have an opportunity to slow down growth in education spending without compromising quality. The reason: Canada's low fertility rate. Canada's elementary and secondary student population fell by 1.6% from 1996-97 to 2004-05, but the decline has been quite sharp in some provinces: 25.7% in Newfoundland, 11.4% in Nova Scotia and 3.8% in Quebec. Those declining enrolments mean that provinces could maintain inflation-adjusted per-student spending while allowing total spending to grow at about half the rate of growth in the economy. If student enrolments are declining, why do governments feel they must ramp up total spending on education? The most obvious reason for rapid per-student spending growth is that governments mistakenly believe that more per-student spending on education will improve results. The success of such reforms does not imply that more money needs to be thrown at education, as opposed to a better allocation of resources to encourage stronger school performance.

This article comments on the competition of Canadian provinces for federal money. Since last summer, John McCallum, the federal revenue minister, has been scouring the federal budget for billions of dollars he can shift from old programs toward more productive new programs. McCallum has met 17 times with members of the Liberal caucus to get their input. As it turns out, the same concerns that obsess Liberal MPs -- regional jealousy and the federal-provincial divide -- are starting to drive provincial politics to an unprecedented extent. Two weeks ago, I wrote about the hornets' nest Paul Martin stirred up by handing Newfoundland Premier Danny Williams a $2-billion cheque to compensate for shrinking equalization payments. So three classic Liberal obsessions -- cities, immigration and federalism -- are interacting in dangerous and unpredictable ways. Very little of this is Paul Martin's fault.

The article focuses on Alberta, which produces most of Canada's oil and natural gas, and Ralph Klein, Alberta's premier. As energy prices have climbed, so have royalties. The result: Alberta is the richest of Canada's ten provinces, and the only one without a provincial sales tax. Its economy should grow by almost 4% this year, well above the national average. Klein announced that his government would wipe out the last of the province's remaining debt. A former television reporter, Alberta's premier is one of Canada's more colourful politicians. He is also an astute politician. After taking office, Klein pushed through a law mandating a balanced budget. Besides paying off almost the province's debt, Klein has set up a fund to cushion the province when energy prices fall.

This article explores the political beliefs of Canadian Prime Minister Paul Martin. So it falls to Adrienne Clarkson to reveal at last what Paul Martin stands for. Or rather, whether there is anything he stands against. The Prime Minister spent two years promising every breathing Canadian the moon on a string. He didn't put a price tag on his generosity, but you could be forgiven for believing you had a friend in Paul. It has been great fun living in a fantasyland of endless goodies. But recess is over. A lot of people are getting nervous. Either Martin is trying to keep expectations down so Bronconnier and other mayors will be happy and grateful when he delivers -- "or he has so many priorities he can't figure out how to deliver on any of them."

Contends that the Ontario election points to a significant reversal of fiscal policy in Canada. Implications of the win by Liberals in Ontario; Overview of fiscal policy in Canada; How the provinces are facing much tighter budgets than the federal government; Pressure to continue Canada's prudent fiscal approach; Competitiveness of Western Canada's tax system.

Summarizes the 1998-1999 government budget for each of the Canadian provinces. British Columbia; Alberta; Saskatchewan; Manitoba; Ontario; Quebec; New Brunswick; Nova Scotia; Prince Edward Island; Newfoundland; Estimation of deficit and debt; Comments of several government officials.