Harper government free riding on U.S. stimulus package: Report

February 17, 2009

OTTAWA—The Harper government is relying too heavily on U.S. fiscal stimulus measures to pull Canada out of recession, says a Canadian Centre for Policy Alternatives (CCPA) report released today in advance of President Obama’s first official visit.

The net effect of Canada’s stimulus plan is equivalent to just 0.7% of GDP — only one-quarter of the U.S. package and less than half of the stimulus advocated by the International Monetary Fund.

“If I were the U.S. president, I would be concerned Canada was free riding on the coat tails of a U.S. recovery initiative to jump start its own economy” said report author Bruce Campbell, the CCPA’s Executive Director. “And I would be pressuring the Canadian Prime Minister to do his part to enhance the chances of an expeditious North American and global recovery.”

The report, The Obama Effect: Canada-U.S. Relations in a Time of Economic Crisis, predicts the global economic downturn could create serious tensions between the two nations, especially if Canada fails to hold up its end of the economic recovery bargain.

“This is the most dangerous recession since the 1930s and so far Harper has low-balled Canada’s fiscal stimulus and heightened tensions by throwing darts at U.S. ‘buy America’ initiatives,” says Campbell. “In reality, ‘buy America’ provisions are legal under free trade agreements and their effects pale in comparison with the disastrous trade consequences if our governments fail to quickly revive the North American economy.

“Rather than lecturing the U.S. president on the theoretical virtues of free trade, Harper would be better advised to re-examine how Canada can pull its weight by improving its own fiscal measures to fight the recession.

“On this and other issues, growing policy differences are likely to leave the Harper government at increasingly at odds with the Obama administration,” concludes Campbell.


The Obama Effect: Canada-U.S. Relations in a Time of Economic Crisis is available on the CCPA website at www.policyalternatives.ca.

For more information contact Kerri-Anne Finn, CCPA Senior Communications Officer, at 613-563-1341 x306.