With Canada facing a deficit of $64-billion over two years and up to five years until the federal books are balanced, Prime Minister Stephen Harper's minority Conservative government began pre-announcing close to $2-billion in spending measures Friday four days before the official unveiling of what could be one of the biggest stimulus packages in Canadian history.
The Conservatives are attempting to help hard-hit cities and towns cope with the drastic economic downturn that's hurt industries from manufacturing and farming to forestry. The Liberals, meanwhile, have attacked the government's decision to release figures early as irresponsible.
"I asked Mr. Harper not to play games like that," Liberal Leader Michael Ignatieff told a luncheon crowd at the Canadian and Empire Clubs in downtown Toronto.
Politics aside, the country is facing economic hardship not seen in two decades. But according to Bank of Canada Governor Mark Carney, there are glimmers of hope. While acknowledging that 2009 will be marked by bankruptcies and job losses, he said Thursday the recession that began in the final three months of 2008 will end faster than did the contractions in the early 1990s and 1981-82.
With all this in mind, we are pleased that Ted Menzies, an Alberta MP and parliamentary secretary to the Minister of Finance, joined us Monday to take your questions on the recession and how the government hopes to guide Canada out of it.
Your questions and Mr. Menzies's answers will appear at the bottom of this page in sequence.
Mr. Menzies was first elected to the House of Commons in 2004 and was re-elected in 2006. He served as parliamentary secretary to the Minister of International Cooperation in 2006 and added the Minister of International Trade to his secretarial duties in 2007.
Outside politics, he was president of the Canadian Agri-Food and Trade Alliance and vice-president of the Grain Growers of Canada. Mr. Menzies was born in Claresholm, Alberta, where he has owned and operated a farm for over 30 years. He and his wife, Sandy, have two children, and two grandchildren.
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Adam Radwanski, globeandmail.com: Mr. Menzies, thanks for joining us at the start of such a pivotal week in Canada's efforts to fight through the current economic challenges.
There's one issue that we've received quite a few questions on the release of information about what's in the budget before it's presented by Jim Flaherty.
J. Law writes: "I am not sure why the Leader of the Liberal party would be upset about the Canadian people learning about the budget in smaller doses, but I would hope some of the reason the government is leaking it is so we can take it in more easily instead of trying to understand it through the static of opposition parties' loud negative rhetoric."
Gerald McIvor writes: "Why is the Conservative government pre-releasing their choice sections and figures of the upcoming federal budget when this is supposed to be kept strictly confidential until presented in the House of Commons? This again looks like an attempt by Stephen Harper to manipulate the court of public opinion prior to the critical vote."
Before we move on to individual readers' questions, would you like to comment on the strategy leading up to the budget?
Ted Menzies: Leading up to Budget 2009, this Government has conducted the most comprehensive pre-budget consultations in Canadian history. The process has been open and public, and has taken place right across the country. An exhaustive amount of work has been done, in a very short period of time.
What we are hearing over the last few days from members of Cabinet is simply reflective of the suggestions we heard from Canadians during this process. With respect to the deficit number, there had been a great deal of rampant speculation based on incomplete information. Given the challenging economic times we are facing, I expect a decision was made in the spirit of open and informed discussion to announce the expected deficit. It is worth noting that the announced number is in line with what the Prime Minister and Finance Minister had been suggesting for the last month. There is nothing market moving in any of the measures the Government has been discussing.
Your readers should keep in mind that the most important announcement will be made by Minister Flaherty at 4pm Tuesday afternoon on the floor of the House of Commons.
What matters most to Canadians will be the economic plan that is put into place by the Budget. A plan to protect and grow the economy in the short and long term, this is what matters.
James Van Leeuwen from Pincher Creek, Alberta: Hello Ted. Because of our heavily export-based economy, there are some major economic course changes that Canada urgently needs to be making if it is to remain relevant to the markets of the 21st century.
One such course change is a strong shift towards competitiveness in the global 'Knowledge Economy', which will require far greater investment in broadband telecommunication infrastructure. Another required course change is an even stronger shift toward sustainable energy. This is especially urgent for Alberta, where the economy is at great risk in a world that is accelerating away from fossil fuels.
Beyond stimulating the economy in the near term, is there a longer-term strategy behind the $64 billion of deficit spending to ensure that we'll recover the deficit (and more)? In other words, is this more than just a Band-Aid?
Ted Menzies: James, thanks for the question. Every time I drive through Pincher Creek I am reminded that the hundreds of wind turbines provide green power to over 100,000 homes.
Your comments mirror what we have been hearing consistently in our consultations. This Budget must be forward looking and lay the foundation to prepare Canada for the 21st Century economy. Any future plan must include a focus on research and development, productivity and improving market access.
Much of what you talk about is actually referenced in 'Advantage Canada', our long term plan for Canada's economy that we released in November of 2006.
Due to the unprecedented global economic challenges we are now facing, we have made the deliberate decision to advance the concepts of Advantage Canada and run significant deficits in the short term. We will ensure that while the measures we take on Tuesday will provide short term benefits through stimulus and help for Canadians in need, they will also help create a stronger more prosperous Canada over the long term.
Bobby Dy: Since the CPC took power, the major federal support programs for biomedical and natural sciences research (CIHR, NSERC) have been funded at levels below inflation. Barack Obama has included a major increase in NIH (the equivalent of CIHR) funding as part of his stimulus package. The argument is that it generates jobs immediately and trains highly qualified personnel for sectors such as biotech. Without this training, there can be no private biomedical sector in this country. Will the Canadian government follow a similar route, and does the Canadian government recognize the dangers of an exodus of our top researchers to the U.S. if the slide in CIHR funding continues?
Ted Menzies: Thank you for the question. Our Conservative Government has been and will continue to be a strong supporter of R&D in Canada. In fact, we have made important investments totalling over $5-billion annually to support R&D activities.
Indeed, since taking office we've provided over $2-billion in new resources for R&D. What's more, we've taken the extraordinary step of naming a Minister of State (Science and Technology), the Hon. Dr. Gary Goodyear, to advance this important file. This builds on the "Mobilizing Science and Technology to Canada's Advantage" strategy we announced in 2007, which I encourage you to read online.
Even more, a "Knowledge Advantage" was one of the five key advantages that we outlined as a priority for Canada in our long-term economic plan, Advantage Canada.
Additionally, we've heard the need to support R&D in our consultations, so expect to see that reflected moving forward.
Dan Laurin from Windsor: How will the Conservative Government address the massive job losses in Ontario's manufacturing sector? Living in Windsor, I see every day more layoffs and read about more companies relocating to Mexico. The jobs we need to maintain are high-paying jobs, $18-24 per hourů
Ted Menzies:: Coming from a farming background, I have seen first hand how devastating the effects of an industry downturn can be on communities and families. I am hopeful that this budget will provide help in terms of EI and also skills training.
Certain sectors have been facing tremendous challenges over the last few months. These challenges have been increased due to the global economic downturn. The Prime Minister and the Premier of Ontario have recently made announcements with respect to the auto sector to help address some of the concerns.
These are difficult times for many Canadians. We recognize this, and this is why we have made the decision to accelerate spending to help maintain and create jobs. Canadians need to appreciate that we are entering this time of global economic uncertainty in a much stronger position than any of our G7 trading partners. We will emerge from these challenging times stronger than our partners, and best positioned for the future because of the timely, targeted, and temporary investments that Minister Flaherty will announce tomorrow.
Adam Radwanski: Mr. Menzies, we understand that you have many other obligations today, and indeed were having to deal with budget-related business even over the past hour. Thanks for managing to field some questions anyway. We apologize to those readers whose questions we weren't able to get to.