What’s Going On North of the Border: The Canadian Economy and Stimulus Plan

~~By InsightAnalytical-GRL

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.”

SNIP

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

Canada’s Fiscal Stimulus Package versus the Obama U.S. Plans

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12 Responses

  1. Tick, tick, tick. The plans goes forward like clockwork. The US will end up trying to save GM to salvage Canadian jobs (just like we keep rescuing AIG to save the European economy – they weren’t too big to fail here, their failure would have wiped out the European Community since AIG insures all the European banks). Instead of saving ourselves (which the article astutely notes would save Canada and much of the rest of the world), we will go under while trying to bailout the ocean with a teaspoon. Then, of course, the only people that will be able to help are the central banks and the World Bank.

    And while Nerobama fiddles, the Republicans once again prove that this is not a one party phenomenon. They’re all in it together – and we’re all screwed!

  2. Sorry to ruin your morning, Grail!!!

    Wait til you read about what’s cooking south of the border…hopefully, I’ can get that up tormorrow!

  3. .You’re right Grail, “the only people that will be able to help are the central banks and the World Bank”

    And…………that was the intention all along.

    But, every European Country is not buying the big stimulus solution. According to the “Times on Line”
    Larry Summers called on other countries to follow America’s lead in pumping even more money in stimulus programs to revive the world economic system. This did not sit too well with some European Countries. Expect the fur to fly at the G20 Summitt if American tries to push their solutions down the throats of some Europeans. Gordon Brown is calling for at least $200 Billion for the International Monetary Fund (IMF) to bail out cash strapped nations, but not everybody agrees with him. Some people still do not want to “owe their soul to the Company Store” – the Banking Cabal.

    Also reported in the times, the G20 is already off to a bad start. Not expecting to be quoted, Sir Gus O’Donnell, Cabinet Secretary, said it is “unbelievably difficult” to liaise with the Obama administration – “there is nobody there”.

    Now, we could take that two ways, either due to the problem Obama has in filling the positions in Treasury, or the substance of the people he already has there. Take your choice.

    • Lee…..I choose both.

      There is no substance. And there is no one there
      It’s not even “the lights are on and nobody’s home” . . . With this bunch, there are no lights and no crew. Not in Treasury; nor in Intel, either.

      Yet another Obama nominee has withdrawn. This time from the National Intelligence Council .
      Obama named Charles Freeman, former U.S. ambassador to Saudi Arabia during the first Gulf War, to lead the U.S. National Intelligence Council.

      The nominees are dropping like flies. One has to wonder about the vetting process – or the vetters.

      http://therealbarackobama.wordpress.com/2009/03/10/klein-obama-intel-pick-withdraws-amid-controversy-worked-for-chinese-government-firm-accused-of-acting-against-us-national-security/

      • Leslie –

        The school textbook that he pushed is “Arab World Studies Notebook”. If its contents are as damaging to American History as Klein says, then we’d better wake up and smell the coffee. The Muslims were here first?
        I intend to get a copy of this book, and if it contains what Klein says, I’ll start a movement here in this county to ban it. Too many people are re-writing history as it is, and leaving out important things about our forefathers in the recent textbooks, but this is crossing the line. Every county school system in America should be alerted to be on the lookout for this book and try to have it banned. I have fought AGAINST book banning in the past, but this is a whole new angle. Poisoning our children’s minds with fiction as history is really too much.

        With his Muslim ties, I can see why Obama would want him in the intel service. He and George H.W. Bush seem to have the same Muslim ties. Small world, isn’t it?

  4. IA, I can hardly wait until tomorrow to find out just what is cooking down below the border. Geraldo Rivera has been bringing us some very frightening tales from there.

    • It doesn’t even touch the subject of the drug cartels or the army now being in Juarez (now claiming success in stopping most of the murders).

      No, it’s about a more specific topic on financial dealings…Lee, you will go nuts…

  5. IA.

    I’m already half nuts – just heard on the news that our TARP money has been invested overseas. I only caught two places before my head started pounding. Those two places were Dubai and China. If I got it straight, it was needed by their banks to stimulate the economies of other nations.

    Remeber at the G8 conference, Robert Zoellick, president of the World Bank said the money should not be kept inside our borders, but shared with the world to help strengthen the global economy? Well, it seems he got his way. Big surprise! I only caught part of the broadcast, so I’m going back on my vow and try to catch something more on every news station I can. It seems some members of congress were going balistic. AS THEY SHOULD. Convenient that the news didn’t appear until Obama got the latest $410B yesterday, isn’t it. Boy, have we been snookered?

  6. Congress is going ballistic? WTF??!!??!! The same Congress that totally ignored the wishes of the American people in passing TARP in the first place???? The smae friggin COngress that shut down their e-mail servers and the Congressional switchboard because they wanted to stick their fingers in their ears and shake their heads no while we demanded that they include some accountabilities with the big cash handout???? That Congress????!!!!

    Cut me some stinkin’ slack, and stop pretending like you give a crap after the crooks do exactly what we told you they’d do before you handed them all of our our money!!!

    These people make me ill. Don’t let them cry and whine to convince you that they weren’t part and parcel of the problem. They knew exactly what was going on.

  7. I heard the report on Greta and searched for a link. Even searched the Kucinich site and the House site…nothing up yet…

    But, I added a bit about this in tomorrow’s post….
    And that’s some post already…..

    I expect you guys to go ballistic yourselves!!

  8. OT~
    Yesterday when I linked to the bit on RBO re:Chas Freeman withdrawing his nomination from the NIC leadership, I had not yet read other posts in other places… There is some reason to believe that the stories about his ties to firms, etc, opposing US interests, were initiated by AIPAC.
    I am feeling bad that I linked to a story without having all the information. (But I don’t even know who to beliee and am feeling even worse about that!)

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