08:05 AM EST, 02/20/2025 (MT Newswires) -- Beyond just hitting back at the United States with either tariff retaliation, or even better, export taxes, what the Canadian government can also do is embark on a massive fiscal stimulus program -- hopefully addressing Canada's tax competitiveness disadvantage at the same time, said Rosenberg Research.

While many in Canada grapple with irresponsible fiscal policy, the reality is that the annual federal budget deficit in Canada is 2% relative to gross domestic product, noted Rosenberg.

That comparable in the U.S. is over 6%, and for the first time since WWII (1942-46), it has topped 5% for five consecutive years, stated Rosenberg.

That has only happened during WWII -- not even in the harsh recession of the early 1980s and the Great Depression in the 1930s have investors ever seen fiscal largess in the U.S. quite like this, it pointed out. But it does put the term "American Exceptionalism" in a certain light, added Rosenberg.

The debt-to-GDP ratio in Canada is a fraction of where it is in the U.S. at 42%, and even including the provinces, that ratio stands below 90% versus almost 130% in the U.S.

Canada has the fiscal flexibility -- and no matter who wins this year's parliamentary election, they should probably use it, according to Rosenberg.