The floods in this past spring caused a great deal of damage to dairy farms in the Red River valley in southern Manitoba. Many farms were largely destroyed and homes lost.

1. Suggest a fiscal policy tool which the Government of Canada could use to aid Manitoba in this situation. (2 Marks)
2. What would the effects be on the Canadian economy if this tool is used? (5 Mar
3. Discuss any possible risks from the use of this tool. (3 Marks)