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Jim Flaherty promises "to meet the challenge of our time." But compared to its American counterpart, his budget is a timid thing.

The U.S. House of Representatives is on the verge of passing an economic stimulus package currently forecast to reach $825-billion - twice, per capita, the $40-billion boost inside the Canadian Finance Minister's budget.

And the U.S. deficit this year is expected to reach $2-trillion, which makes Mr. Flaherty's projected deficit of $34-billion - only one-sixth the size of the U.S. deficit, on a per-capita basis - a model of restraint.

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The Canadian economy isn't in nearly as bad shape as the American, and Canadian governments have been far, far more fiscally responsible than their American counterparts over the past eight years.

But something else, more politically intriguing, is also at work. We have, perhaps for the first time ever, a government in Washington that is considerably more liberal than the government in Ottawa.

Pretty much any Canadian, no matter how conservative, becomes a liberal Democrat just by crossing the border. Unless you favour privatizing most of the Canadian health-care system, hugely expanding private education and eliminating the GST, you're to the left of most Americans, including most Democrats.

That is why, even on the rare occasions since the Second World War when Canada has had a Conservative prime minister while the U.S. has had a Democratic president, Canadian governments have generally shaded to the left of U.S. administrations. Until now.

This week, President Barack Obama announced plans for higher fuel efficiency and reduced automobile emissions. The U.S. administration plans to legislate, as early as this year, a national cap-and-trade system to reduce greenhouse gases. And the economic stimulus package contains tens of billions of dollars to upgrade energy infrastructure and reduce reliance on oil and gas. Mr. Flaherty's budget is a limp noodle in comparison.

Republicans complain much of the stimulus isn't targeted at job creation, as the Democrats promised. They're absolutely right. The Democrats are using this crisis to fund programs that they would otherwise have a hard time justify-

ing in the teeth of such staggering projected deficits.

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How many jobs are created by increasing financial aid to college students, or modernizing dilapidated schools? How many homes in danger of foreclosure will be saved by converting medical charts to electronic files, or making sure everyone has access to a flu shot? How many of the unemployed will find work helping to resod the National Mall?

These are all perfectly defensible programs that might reasonably be deferred until fin-

ances improve. But the Democrats know that the public, frightened by the credit crisis and skyrocketing job losses, is in a deficits-be-damned mood. They and the President have given Congress a blank cheque to spend and Congress is rising with alacrity to the occasion.

The Conservatives in Ottawa, in contrast, have less inclination to spend and less of a mandate. Mr. Flaherty only reluctantly accepted that the recession demanded both deficits and stimulus. As recently as November, he was tut-tutting the whole idea. And while Canadians accept the need for deficit spending after 11 exemplary years of balanced budgets, a U.S.-equivalent $200-billion deficit would be a number too far.

It is good that Mr. Flaherty isn't spending any more than he has to. But in another respect, having the Canadian government to the right of the American government is a missed opportunity.

As Scotty Greenwood, a Washington-based consultant who was chief of staff to Gordon Giffin when he was ambassador to Ottawa, notes, this year marks the 100th anniversary of the Boundary Waters Treaty, in which Canada and the U.S. promised to work together to preserve the Great Lakes and other shared waters.

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Ms. Greenwood believes that Prime Minister Stephen Harper should use the anniversary to propose a new continental environmental accord that would, among other things, reduce greenhouse gases and airborne pollutants.

Mr. Obama would jump at that proposal. The Democratic Congress and Canadian Parliament would back it to the hilt. But I doubt Mr. Harper has it in him. He's too far to the right on the environment.

At least it's some consolation for Republicans. If they can't stand living in Barack Obama's new liberal America, they can always head north to Canada. They'll feel right at home.

jibbitson@globeandmail.com

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