In 2009 and 2010, with Canada and the rest of the world mired in a recession, the federal government did something different to retain confidence in the economy. Instead of tightening the purse strings, Ottawa spend millions to make sure Canadians continued to work during what were uncertain economic times.
The result was an economy that didn’t fail. Canadians continued to work through what should have been tough times and countless communities received the benefits of having pieces of crumbling infrastructure renewed in the form of new sewers, bridges, water systems, streets and roads.
Now, as the world teeters on the verge of another recession, one would expect Finance Minsiter Jim Flaherty to stand up and say government is prepared to repeat what it did to make sure Canadians’ confidence in the economy was not shaken. Surprisingly, with markets in freefall and Canadians again growing concerned for their jobs, the finance minister has said Ottawa is going to stick to the pledge it made in its budget by slashing spending and balancing the books.
Speaking at his annual policy retreat in Quebec on Wednesday, Flaherty said that while the global economic situation poses obvious risks to Canada, he plans to “stay the course.”
Flaherty said the global situation is already impacting Canada, but he maintained that the Canadian economy is in a position of strength and there’s no need to panic.
While the debt crisis in the United States is going to be felt north of the 49th parallel, Flaherty doesn’t feel the need to once again loosen the purse strings – even though the organization representing Canada’s towns and cities says there is much more infrastructure work to be done.
Hopefully, Flaherty has read the situation properly and his decision to slash spending and cut costs won’t bring about that uncertainty that he fears most. The minister has a point in that there can’t be a blank cheque to Canada’s economic woes, but he should be prepared to rethink that stance should economic performance put people out of work, placing more pressure on the social fabric and this country’s economic wellbeing.