Paul Kugman's post title is "Keynes comes to Canada". Paul is wrong. Keynes was in Canada, but he just left.

Look at this graph from Matthew Klein (a very good article, by the way):

The other bit of information you need to know is that the Bank of Canada hit the Zero Lower Bound in April 2009, and lifted off the ZLB in June 2010. (The Bank of Canada considers [update: did consider] an overnight rate target of 0.25% to be the "effective" ZLB.) Compare those two dates with the above graph.

New Keynesians, like Simon Wren-Lewis for example, prefer to use monetary policy in normal times, but advocate fiscal policy be used at the ZLB. (Just like Keynes doubted the effectiveness of monetary policy in a liquidity trap, and the ZLB is just another way of thinking about Keynes' liquidity trap.) And bringing forward government investment expenditure seems to be a very sensible way to implement a New Keynesian fiscal policy (though some lags are inevitable). Faced with the ZLB, the government invests sooner, rather than later.

And that is what Canada's recent Conservative government did.

No, it doesn't fit the narrative, does it. Too bad.

[Update 2.Lifted from comments: JKH: "Krugman's title more accurately should have been "Summers comes to Canada"."]

[Update 3: As Frances Woolley points out below, that graph shows combined (federal+provincial+municipal) government investment spending. But I think that's the right measure in this case, because a lot of federal money went on incentives for investment by lower levels. Plus, for example, my university got two big new semi-free buildings out of those incentives, and I have no idea whether that gets counted.]