Ottawa ready to spark economy.

This is from the Star.
Maybe as well as sparking the economy Harper will burn taxpayers and a lot of their money too. Harper and Flaherty speak of revamping the auto manufacturers so they produce autos that are wanted, more efficient, and competitive but we will see. It may turn out to be an expensive welfare program for a failing group of manufacturers. Harper like Bush is a free market guy who nevertheless can turn on a dime and change his tune when occasion demands it. We have now a sort of flexible ideology to match new times.



Ottawa ready to spend to spark economy TheStar.com - World - Ottawa ready to spend to spark economy

TOM HANSON/THE CANADIAN PRESS
Harper commits Canada to do its part, doesn't rule out future bailout plan for auto industry
November 16, 2008 Tim HarperLes WhittingtonStaff Reporters
WASHINGTON–The Conservative government is going to open its wallet to help boost the Canadian economy as part of a global effort to stave off a deepening recession, Prime Minister Stephen Harper says.
After an emergency meeting with other world leaders yesterday, Harper said his government is setting aside its aversion to budgetary pump-priming – and deficit spending – so Canada can do its part to improve worldwide business conditions.
"We will do what we have to, to contribute to boosting global demand," the Prime Minister told reporters after he and other Group of 20 leaders agreed on collective action to stimulate the economy.
And Finance Minister Jim Flaherty said Canadians could see new spending by Ottawa to spark economic growth as early as his mini-budget scheduled for the last week of November. Flaherty also told the Toronto Star that, because of the worsening economy, he may have to move his annual budget announcement earlier than the usual late-February or March timetable.
In a press conference, Harper said events are forcing his government to abandon its dislike of interventionist government spending.
He praised China for its recent decision to inject $567 billion (U.S.) into its economy. "Other countries have recently taken actions and we'll obviously be looking at additional actions ourselves," he added.
During the recent federal election campaign, the Conservatives said they would never run a budget deficit. But the government now acknowledges that, with the world economy falling so much faster and farther than anyone expected, a budget shortfall cannot be ruled out this year and next.
"This is not business as usual these days," Flaherty said in an interview.
Leaders from the G20, which brings together industrialized nations such as Canada and the United States with newly developed economies like China and India, reached agreement yesterday to work together in hopes of combating the gathering global recession.
"Economic momentum is slowing substantially in major economies and the global outlook has weakened," the leaders said in a joint statement after the two-day conference hosted by U.S. President George W. Bush.
"More needs to be done to stabilize financial markets and support economic growth," the communiqué stated.
The leaders also agree on a wide-ranging plan of action to clamp down on the excessive risk-taking on financial markets from Wall Street to Tokyo that set off the current global economic storm.
While steering clear of the proposed new global governance structure advocated by some European leaders, the G20 called for "intensified international co-operation" among regulatory agencies to beef up surveillance and investor protection in stock markets and other financial institutions.
The leaders want to see the risks reduced in derivatives and other exotic investment vehicles and they suggested that investment dealers' compensation should be reviewed to ensure they are not being encouraged to sell high-risk products to unsuspecting investors.
The leaders also said two institutions established after World War II to stabilize and encourage global economic growth – the International Monetary Fund and the World Bank – need to be reformed to give newly developed countries such as China, India, Brazil and Mexico more say in their decision-making.
Discussing future actions, Harper did not rule out a bailout package for Canada's Big Three automakers.
He said the government is waiting to see whether the U.S. government goes ahead with a proposed $25 billion (U.S.) support package for American automakers.
But Canada must "ultimately undertake our own actions and be convinced that those actions are not just in the interests of the auto sector but in the best interests of the Canadian economy and Canadian taxpayers," the Prime Minister remarked.
The Conservatives have already committed to speeding up the dispersal of billions of dollars in urban reconstruction funds, and Harper promised during the election to put another $200 million into the $250 million Auto Innovation Fund.
Wrapping up the summit, Bush declared it a success, then cheerfully handed over the reins to the incoming administration of Barack Obama.
"It makes sense to come out of here with a firm action plan, which we have," he said.
"It also makes sense to say to people that there is more work to be done and there will be further meetings, sending a clear signal that a meeting is not going to solve the world's problems."
Instead, he said, the G20 leaders have begun a process that will lead to a regulatory structure "that will make this less likely to happen in the future."
He also ended his remarks with a breezy "goodbye," bringing an air of finality to his eight-year presidency and underlining the tentative nature of yesterday's summit, presided over by an outgoing president at a time when much of the world is riveted by the arrival of the Obama era.
In his remarks at the historic National Building Museum, Bush also went further than he has in the past in characterizing the scope of the financial meltdown which began here, under his watch.
"Those of you who have followed my career know that I'm a free-market person," he said, "until you're told that if you don't take decisive measures then it's conceivable that our country could go into a depression greater than the Great Depression."
Obama remained in Chicago but sent two observers, former secretary of state Madeleine Albright and former Republican House banking chairman Jim Leach, to the summit to observe and meet with foreign leaders.
As the G20 was meeting, Obama – who will host the next meeting early in his presidency – addressed the nation by radio and stressed the need for the U.S. to not only act globally, but get its own house in order.
"Make no mistake, this is the greatest economic challenge of our times," Obama said.
"And while the road ahead will be long, and the work will be hard, I know that we can steer ourselves out of this crisis, because here in America we always rise to the moment, no matter how hard."
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