Free advice from Jim Flaherty

by Aaron Wherry

The Finance Minister may have been told to stop dumping on the Ontario government, but he apparently remains free to lecture Europe.

Since 2008, and throughout the European debt crisis, I have been telling my international counterparts that it is important to overwhelm the problem and get ahead of the markets. This is what the United States did in 2008, and it is what Canada did in 2009 by deploying a fiscal stimulus of roughly 4 per cent of GDP over two years in response to a crisis originating outside our borders. These bold actions paid off. Rating agencies have reaffirmed Canada’s strong AAA credit rating, and we are now on track to return to balanced budgets over the medium term. By contrast, actions taken by the eurozone have fallen short of overwhelming the problem. The “muddle through” approach has led to an erosion of confidence in public leadership and too many missed opportunities.

Ultimately, the adequacy of the actions taken will be judged by the markets. Repeated expressions of confidence by politicians are futile if the markets continue to cast their vote of non-confidence. The markets’ confidence in political leadership will only be restored when it is clear that politicians are willing to see the full scope of the problem, to focus on the key issues instead of pursuing sideshows such as the financial transactions tax, and to set out and implement a plan for tackling these issues.




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Free advice from Jim Flaherty

  1. I recall the Harper government having to be forced to create a stimulus by the opposition, in complete reversal to their actual intent.

  2. Daily Telegraph is conservative newspaper and they look kindly on Canadian Cons. I read DT daily and occasionally see article extolling virtues of Harper and Canadian Cons and why can’t Cameron/UK Cons be more like their Canadian counterparts.

    Flaherty should tell the Europeans to invent provinces who have their own budgets which would make the national government’s job easier when it comes to balancing budgets – Canadian finances don’t look too good when we include provincial debt.

  3. Yes, Jim, the opposition parties did a great job in forcing you to actually admit that there was a problem and implementing a stimulus package. Kudos to the opposition parties for preventing Conservative muddling and an extended depression.

  4. Do you think Flaherty even understands when he’s lying now?

  5. Well, we all know what ‘free advice’ is worth so I imagine Europe will continue to ignore him.

    But at least he’s been told to stop taking his bitterness out on Ontario. That was definitely a stupid thing to do.

  6. If European countries are seeking financial health, they should follow Canada’s lead and hire Paul Martin.

    • Or, alternatively, they could live quietly next door to the world’s
      largest economy as it’s starting to ride high on a tech bubble.
      So much easier.

  7. Is this the same self-important little leprechaun who used creative accounting to hide the multi-billion deficit he racked up as finance minister in Ontario? His plan to fix that little problem, had he and his cronies not been kicked out of office, involved a massive fire sale/privatization of government assets.

    I hope, as rumour has it, he’s angling for Hudak’s job as provincial Tory leader. He’d be as toxic in Ontario for the Cons as Rae has been for the Liberals, for pretty much the same reason: perceived financial incompetence.

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