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Clement lauds Liberal-era fiscal reform in speech to U.S. audience

Tony Clement speaks with reporters in the foyer of the House of Commons on Feb. 1, 2011.


Treasury Board President Tony Clement is crediting much of Canada's current economic success to actions taken long before his government came to power, telling a Washington business crowd Wednesday that Canada made the right moves when faced with serious debt troubles of its own in 1995.

The Harper government has had few kind words for the Liberal Party that governed Canada for 13 years before the Conservatives won the 2006 federal election. But Mr. Clement's speech to the Washington Chamber of Commerce praised the way Canada responded when it lost its own AAA credit rating due to high debt.

"Successive Canadian governments, across political lines, faced the challenge square on, delivering fiscal reforms that started us on a path to balanced budgets," he said, according to his prepared remarks. "As a result, from 1997 to 2007, our country enjoyed a decade of strong economic performance, with Canada leading the G7 in economic growth. ... Currently, after three years of fiscal uncertainty, our debt to GDP ratio is at 34 percent – still an enviable number in a global context."

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The speech does not repeat the Conservative government's usual criticism that the Liberal government budgets of the mid-1990s led to harmful cuts to the provinces for health care and education.

Democrats and Republicans are in the midst of a heated debate over whether to approve a second wave of stimulus spending to create jobs and how best to achieve government savings over the medium term.

The United States saw its AAA credit rating downgraded by Standard & Poor's in August. The rating agency said it was concerned the U.S. political process was failing to address the government's record budget deficits.

Mr. Clement's speech does not wade in to that debate. Rather it praises the Conservatives' stimulus plan and its restraint efforts, which Mr. Clement is responsible for as head of a special strategic and operating review committee of cabinet.

"Our public service got the job done. They got the money out the door quickly, especially for infrastructure, so that the stimulus to the economy started in 2009. The stimulus plan worked," he said.

His only advice to the Americans was this: "The United States is the world's largest economy and the world depends on the fiscal decisions made here in Washington. ... And in this current economic crisis, there is opportunity to learn from each other as we make it through this sea of uncertainty together."

Mr. Clement's international praise of Canadian stimulus spending comes as he is in the midst of on ongoing controversy at home. The opposition has launched daily attacks directed at the fact millions of dollars were sprinkled throughout the minister's Ontario riding of Parry-Sound Muskoka as part of a "G8 Legacy Fund."

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NDP MP Charlie Angus has been particularly vocal in his criticism of what he calls the "Muskoka gravy train" and has expressed concern that the minister acted inappropriately by lining up potential projects via his constituency office.

Mr. Clement refuses to answer questions on the topic in the House of Commons, but has said he will soon address the issue before a Commons committee.

In an interview Monday in advance of his two-day trip to Washington, Mr. Clement said the spending in his riding was part of a government-wide plan to boost the economy during the recession.

"The fact of the matter is we as a government engaged upon economic stimulus, literally 23,000 different economic stimulus projects across the nation, that involved my constituency as well as 307 other constituencies across the country," he said.

"That was at a particular time when we had to kick-start the economy to realize that jobs and economic growth returned as soon as possible. We were successful in doing so. We are now in a different time. We are in a time of restraint. ... The fact of the matter is my political opponents, particularly in the NDP, don't want that restraint to happen. They want to continue to spend."

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