There was no shortage of criticism when the federal budget was unveiled Jan. 27, but corporate Canada was actually consulted like never before. GGeorge Gosbee, CEO and president of Calgary oil and gas advisory firm Tristone Capital Inc., and one of the 11 experts Finance Minister Jim Flaherty relied upon, tells Andy Holloway how this budget came to be made.
Out West, the criticism was that Stephen Harper took 15 years uniting the right and he just gave the best Liberal budget we ever saw. But could you really deliver another type of budget other than this right now to kind of give confidence to all of Canada, unite the country and give people hope that we are going to get through this? I don’t think there were too many other options.
It’s more monetary policy that drives our country than fiscal policy. The budget was fiscal policy, but when you have 50% of your revenues coming from exports, it’s monetary policy that matters. I think Bank of Canada governor Mark Carney did everything right in order to try to get us back on track and keep us on track.
I was telling the group that the budget was coming out three or four months before the impact of the recession would be felt in Calgary, but the budget served its purpose in touching all corners of Canada, and we didn’t go overboard with regard to fiscal spending. Again, I think it’s monetary policy that drives the economy in Canada. Well, it’s the U.S. that drives the economy in Canada, but monetary policy is the one thing that can help stimulate it.
Everybody underestimated the global situation. Not just our government, but most governments. Here we were in October realizing that we had to do something in a hurry and consult as many people as possible, and that’s why the federal government jumped on the idea of having an Economic Advisory Council. I think it’s a great idea, and I think you’ll see more of it as a standard. U.S. President Barack Obama did a similar thing.
But it was very difficult to come to the conclusion of where we’re heading as a country in three months. You need to give monetary policy a chance, and this budget bought us some time to see if the impact of our monetary policy is working. As well, this budget bought us an opportunity to see what Obama was actually going to implement and whether we had to massively change some things. Both those things will give us a better idea of how we want to see the medium- and longer-term vision of this country. How do we want to be more competitive education-wise? How do we want to build on our strengths and not our weaknesses? That’s an exercise for our government moving forward, and that’s the exercise we’re engaged in as the Economic Advisory Council. How that gets executed with a minority government is a different matter, but that’s the challenge going forward. It was very hard to see that agenda in the six- or eight-week time frame we had, with so many unknowns.
I’m glad that they took this approach to canvass as many people through town hall meetings, one-on-one meetings, and have this advisory council just to hear what the issues really were. Our group brought a lot of different ideas, and I brought a pretty good Alberta perspective, even though it wasn’t shown up in the budget.
A lot of my colleagues had a lot of good ideas, and a lot of them did transpire into the budget. There were a lot of good ideas thrown out about Alberta, but in this particular budget it probably wasn’t the best political move to be doing some of those things when other areas needed to have some concentration.
With regards to Alberta, it’s more the provincial government than the federal government that can drive the economy. It’s more about royalties and drilling incentives. The federal government can’t really stimulate credit to oil and gas companies or the service companies to give them a two-year buffer while we go through a hard time. Apart from taking back measures like the accelerated cost of capital allowance or the royalty trust, which will never happen, it’s really on the shoulders of the provincial government.
The experience ended up being a real eye-opening exercise about what it takes to get a budget through and all the factors you have to consider, especially with this budget. I also learned a lot about the other parts of this country, and I didn’t truly appreciate some of the situations they find themselves in. I learned a lot about the auto sector, B.C. forestry, Arctic military bases, shipbuilding. Having such a diverse board brought a lot of real-life and real-time experience to the minister. Having entrepreneurs such as Jimmy Pattison, and people who have run big companies or big holding companies like Paul Desmarais Jr., and technology companies like Research In Motion, we were able to be a great sounding board for the minister with regard to ideas and whether they would work if they were adopted.
The Economic Advisory Council has regular monthly meetings, and then we’re consulted on a one-off basis on areas of expertise where they feel we can add value. I get called on energy matters. I hope we can capitalize on this opportunity and really use it as an opportunity to reinvest in education, change our employment insurance system and come out ahead, especially on the education front. We have to start putting a lot more back into education and tying it to technology. We have to come out ahead on that.