Dear John,

All across Canada, provincial governments are busy announcing “shovel-ready” plans to ramp up infrastructure spending and kick-start their economies. But do such stimulus efforts really work?

During the 2009 recession, the federal government implemented a massive stimulus package, focused heavily on “shovel-ready” infrastructure.

Canada’s economy did begin to grow midway through 2009, but a 2010 Fraser Institute study found that government spending and investment in infrastructure had a negligible effect on growth during this period. Instead, private-sector investment and increased net exports drove the recovery.

Because “shovel ready” infrastructure projects take significant time to plan and implement, the actual spending on infrastructure usually starts after the economy has already recovered. This means government spending competes with the private sector for resources, resulting in increased costs and fewer private-sector projects.

This past weekend, we made this very point in a commentary appearing in the print edition of the Toronto Star, reaching hundreds of thousands of people.

Last week, our study on the 4-day work week reached millions of people in dozens of newspapers across the country. And every week, our research reaches millions of people on social media!

As government spending reaches worrying new heights and voices argue for temporary big government COVID measures to become permanent, the sober look at numbers and facts that the Fraser Institute provides is more important than ever.

John, this pandemic has had an enormous impact on our operations. We froze most of our fundraising activities for nearly two months, and like most organizations and businesses, had to make some difficult decisions.

Don’t get me wrong – the Fraser Institute has been around for 46 years, and we’re not going away anytime soon. But the reality is, we are only as strong as our supporters. We don’t accept any government funding.

If you value the work that we do, and if you are able to, please consider making a donation today. Your gift will help ensure that the Institute is on solid footing as we emerge from the COVID recession. It will also entitle you to a generous tax credit at tax time!

Thank you for your support.

Stay safe,

Niels Veldhuis
President

PS: We have a big release coming out on Thursday about public sector compensation. It will be delivered free to your inbox. You won’t want to miss it!