Recently we posted information about how Canadian banks are moving into buy U.S. financial institutions (See: Canadian Banks On the Move Buying U.S. Banks While Bailout Recipient AIG Sells Canadian Life Insurance Business to Bank of Montreal (”Picking over the Carcasses”).
Things in Canada aren’t all rosy, of course. As of late January:
“The credit crisis and the global sell-off of commodities have started to hit Canada hard. The country lost more than 100,000 jobs in the last two months of 2008, and the central bank is predicting economic output will contract 4.8 percent in the first quarter.”
When Obama visited Canada last month (February 19, the two leaders pledged to work together:
Obama said the US and Canada were working closely together bilaterally and within the G8 and G20 – two blocs made up of the world’s largest economies – to see how to restore confidence in financial markets.
Like much of the world, both nations are battling a severe recession. In Canada, the world’s eighth-largest economy, the unemployment rate in January soared to a four-year high of 7.2 per cent. That rate was at 7.6 per cent in the US, the highest since 1992. Harper said he and Obama agreed that Canada and the US “must work closely to counter the global economic recession by implementing mutually beneficial stimulus measures.”He later said: “We know, as a small economy, we can’t recover without recovery in the United States.”
NAFTA had threatened to become an acrimonious issue during this visit. On the presidential campaign trail, Obama had said that the US would threaten to pull out of NAFTA unless Canada and Mexico agreed to strengthen labour and environmental protections. But he has softened his stance since taking office.
Well, if you’re going to have a North American community, I guess some stances HAVE to be softened…
A few days before Obama hit town, The Hill Times, “Canada’s Politics and Government Newsweekly,” ran this story:
Canada needs whistleblowers to protect stimulus package
Given the $1-billion gun registry overrun and the sponsorship scandal, there’s little reason to trust that this unprecedented expenditure will be managed competently or even honestly.
Displaying start of article containing 755 words – Many Canadians rightly fear that the massive government spending recently announced may simply be wasted or the money end up in the wrong hands, without creating jobs or helping the economy. Given the track record of our corporations (with fiascos like Bre-X and Nortel) and past government waste and corruption (such as the $1-billion gun registry overrun and the sponsorship scandal) we have little reason to trust that this unprecedented expenditure will be managed competently or even honestly.
Sounds so familiar!
And the newsletter I receive from Radio Canada International had this tidbit one day:
TORONTO: CBC IN STRAITS
Canadian Broadcasting Corp. President Hubert Lacroix says the public broadcaster is considering reducing services in coming months to cope with budget problems. In a speech in Toronto, Mr. Lacroix says the CBC faces an advertising shortfall of as much as $65 million for the fiscal year ending March 31, as advertisers reduce spending amidst the ongoing economic crisis. Mr. Lacroix says that while the CBC will likely break even this year, the future is problematic. The president said the broadcaster may sell assets, consolidate local stations or introduce more U.S. television shows. Mr. Lacroix says he has asked for a meeting with the prime minister, Mr. Harper, not to ask for a bigger subsidy but possibly for a line of credit or an advance of funding allotted for future years. On Wednesday, a spokeswoman for Heritage Minister James Moore told The Globe and Mail newspaper that the government expects the CBC to manage with its $1-billion a year subsidy. Meanwhile, The Globe reported on Thursday that private broadcaster CTV plans to close money-losing television stations in Windsor and Wingham, ON.
Meanwhile, Canadian Auto Worker union members will finish voting today on a tentative agreement which may or may not get the approval of the Canadian government. Although union negotiators have agreed to concessions, it’s not clear sailing:
The new deal is contingent on GM winning financial support from the governments of Canada and Ontario.
Federal Industry Minister Tony Clement has suggested the deal may not be acceptable to Ottawa, although he seemed more receptive today.
“I’m not here to pass judgment,” Clement said after a speech to the C.D. Howe Institute. “For government money to flow, there has to be the ability to be competitive in the new marketplace, there has to be a viable plan on a go-forward basis, there has to be the right kind of management decisions that have been made.”
Clement suggested that in the end, the only thing that will save the auto industry is the American consumer.
“If you’re asking me what will save the auto sector in North America, it’s what American consumers do and buy, not just what Canadians do and buy.”
GM and Chrysler have until March 31 to finalize restructuring plans to get access to Canadian government financial aid.
So, while Canada may not have the same problems with its financial institutions that we are seeing in the U.S., the spillover of the U.S. banking system’s crisis and our economic woes is unavoidable. The condition of the Canadian financial system will have to be watched as Canadian banks assume more risk as they take over U.S. assets.
And, as of the moment, the Canadian government’s stimulus package remains hung up as the budget has still not passed the “Liberal-dominated Senate” as Opposition members demand “reports” on the details:
The reports, which detail the budget’s implementation and costs, are to be delivered this March, June and December ahead of opposition days in Parliament. This would give opposition parties the chance to move a no-confidence motion against the government if they wanted to trigger an election.
How about that? An opposition that could trigger a election.
Meanwhile, there was some fighting over the price tag in the bill to fund the government through September that passed yesterday. The $410 billion bill, on top of the $787 billion stimulus package approved in February is starting to bring out the rancor. But:
While most of the votes throughout the debate were along party lines, eight Republicans crossed the aisle to vote to end the weeklong debate on the legislation while three Democrats opposed it. The Senate approved the measure by a voice vote.
So much for a solid opposition here…
More information on the Canadian stimulus plan and a comparison of the U.S. vs. the Canadian situations and priorities
Canada’s Stimulus Plan–The Canadian plan focuses on infrastructure. This article provides a list of measures and a chart of the action plan
Filed under: Current Politics | Tagged: American consumer, C.D. Howe Institute, Canada, Canadian Auto Workers union, Canadian banks, Canadian Broadcasting Corporation, Canadian Parliament, Canadian Senate Opposition members, Canadian stimulus package, CAW, Chrysler, commodities, Federal Industry Minister Tony Clement, G20, G8, GM, governmental waste, governmetnal corruption, Hubert Lacroix, NAFTA, no-confidence vote, Ontario, sponsorship scandal, The Hill Times | 12 Comments »