Bad economic news has the potential to change the conversation in a number of ways heading into the fall election but, so far, the stubborn commitment to balanced budgets doesn’t appear to be one of them. The Bank of Canada last week said the economy contracted in the first two quarters of 2015—meeting the traditional definition of a recession, though Governor Stephen Poloz did not use that word—and offered a far gloomier growth projection for the year. The Conservatives’ federal budget in April assumed economic growth of two per cent in 2015-2016. The central bank last week downgraded its projection for the year from 1.9 per cent to 1.1 per cent. The bank provided stimulus last week by cutting its benchmark lending rate for the second time since January, reducing it to 0.5 percent. Mr. Poloz told reporters last week that his rate cut and the Conservative government’s child benefit payments would provide a “noticeable bump” in consumer spending. The opposition parties say the Tory fiscal plan, based around the family tax cuts promised last fall before the plunge in oil prices, is not enough to stimulate the economy. The Conservatives are re-packaging those cuts as stimulus, taking advantage of the timing as almost $3-billion in cheques starts to land in the mailboxes of nearly four million parents this week. While the opposition parties are licking their chops at the possibility of the governing Conservatives running for a fourth consecutive mandate in the midst of a recession, they aren’t deviating from what’s become a balanced budget orthodoxy. The Conservatives say they would only provide more fiscal stimulus in severe cases, and their own law passed this year requires balanced federal budgets except in “extraordinary situations.” With Finance Minister Joe Oliver maintaining the government will be in surplus this year, it doesn’t seem likely that the current situation will qualify. For years, economists have challenged the Conservative government’s emphasis on austerity when the country is facing crumbling infrastructure and low interest rates make it the perfect time to borrow and invest in much-needed long-term projects. The Conservatives were willing to do this in 2009 (though some question the merit of some of those projects) but show no appetite, after fighting to return to balance ever since, to go into the red again. The concern is that that appetite doesn’t exist anywhere on the political spectrum anymore. When the Conservatives announced their tax cuts last fall, they basically spent the anticipated surplus (which may no longer exist) and dared the opposition parties to spend outside of that box and run a deficit. So far, no one is willing. A shrinking economy and even lower interest rates provide solid reasons to challenge the prevailing balanced budget orthodoxy. The question is whether any of the opposition parties will dare.