Courtesy Reuters

CANADA enters the second winter of war with her economic policy meeting its first crucial test. Until now the Canadian Government has not found any great difficulty in adhering to its declared policy of pay-as-you-go. In September 1939 there was unused factory capacity and there were reserves of labor and raw materials. Indeed, a mildly inflationary policy was adopted during the early months to stimulate production. Now, after more than a year of war, full employment is clearly in sight; immense extensions of plant are under way; and expenditures are approaching 30 percent of the national income. These developments reveal that a

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