Keynote Address by the Honourable Jim Flaherty,
Minister of Finance
Summary by Philippe Mineau, CIPA Youth Scholarship Recipient
During his address, Minister of Finance Jim Flaherty highlighted the Institute’s importance for the Canadian public service, in providing a place where actors of all political stripes can find a home, can find answers, and are offered the chance to “punch above their weight.”
Much like the chance that Canada was given during the 2008 financial crisis. It answered the call, according the Flaherty, of global governance, of global cooperation to solve our financial problems. “We had prepared by running balanced budgets,” and where others accused our banks of being timid, boring, risk averse, the tune quickly changed to wise, stable and prudent.
Minister Flaherty described the frantic moments in October when Finance Ministers from G7 countries got together and realized, painfully, that their banks held toxic assets and would soon be in trouble. “We ripped up the communiqué” – the briefing that had been prepared in advance – “and that was one of our most important acts.” He quipped that anyhow, those communiqués are “seldom read, often published.” Instead, they formulated a five-point plan that was quickly approved by the Bush administration, and which paved the way to recovery. They had to act quickly and boldly to avoid the serious anticipated effects on unemployment, and the G20 would be there to coordinate their efforts.
With a focus on specific debt targets, the future looks hopeful – especially for Canada, which will find itself in the enviable position of lowering taxes while other countries are forced to raise theirs. Fiscal prudence, good provincial coordination and stable consumer confidence put Canada ahead of the pack.
The results are telling: lower unemployment than in the US (something that has not happened since 1975), a growing GDP in the last three quarters of 2009, and the fact that other nations now look upon us with admiration.
While the role of government may have shifted from what conservative values would dictate, it was necessary to act; the government had a responsibility to adapt to changing circumstances, and the changes were too sudden to think at that point to the long term. But perhaps the time to do that is now, with an eye on quality and quantity of capital, leverage ratios, and opposing punitive taxes on the financial sector.