For those of you who missed it, we just this week held our annual Canadian Business Outlook ’09event, which featured the prognostications of such top-notch Canadian economists as David Wolf (Merrill Lynch), Benjamin Tal (CIBC), Derek Burleton (TD) and Sherry Cooper (BMO).
The overall message was both stark and simple: the world is in the throes of an economic crisis that is unprecedented in its scope and potential severity, and governments have a vital role to play in helping those most hurt by the recession and in ensuring that the recovery is as quick and as robust as possible. If ever there was a time for smart, substantial and timely economic stimulus from government, that time is now.
Too bad Ottawa didn’t get the memo.
For anyone looking for significant new stimulus, the fiscal update that Finance Minister Jim Flaherty delivered yesterday was a major disappointment. Yeah, yeah, pledges to cut back on wasteful spending are always welcome. But where’s the payoff in terms of getting the economy going again?
And what is this government thinking? On the one hand, it has claimed that now is not the time for major new initiatives–those will have to wait for the ’09 budget. On the other, it managed to work into the fiscal update a clause to rescind subsidies for federal political parties, which amounted to all of $27 million in 2006. So the government can manage the politically irritating and the trivial; it has yet to show it can manage, or even address, the biggest economic challenge of the 21st century.
Several weeks ago, my magazine called for an all-party, non-partisan, intergovernmental approach to a crisis that will affect all Canadians, from the corporate boardroom to the shop floor. We have yet to see such leadership.
One hopes it is not too late, that there is method to this seeming madness, though with the threat of a nonconfidence vote now seeming very real, one wonders what that method could be. Maybe it makes some sense for Canada to wait on an economic package until some of the details of the US stimulus plan are settled, particularly with respect to the auto industry. But that’s no excuse for the government to make a move in what appears to be the wrong direction.
Canadians need action on the economy, and instead they might end up with an election, or a coalition government, that nobody really wants.