Why Canada shouldn’t strut on the global stageGraham Hughes/The Canadian Press
Canada has a new, confident strut. We held the world spotlight for a few days at the G8 and G20 meetings in Muskoka and Toronto, where we asserted our impressive record on fiscal management and led an international consensus on deficit reduction. Canada, some say, has finally found its footing on the global stage after years of stumbling.
But let's not be smug. The world sees us for what we are: We lead when it's easy for us, and we lag when it's hard.
In advance of the meetings, Ottawa lectured the world on the need to get deficits under control. The implication was clear: Prof. Canada will teach the world a thing or two on the tough subject of balancing budgets, having erased its federal deficit a dozen years ago. David Cameron, the new British Prime Minister who's struggling to get his own government's very large deficit under control, was said to be listening intently. That was evidence enough for some to think Canada was back in the international ring, punching above its weight again.
Memories are short. Things were much different a mere six months ago at the Copenhagen climate-change summit. Canada prepped for that meeting by running away from greenhouse-gas targets that it had signed up to in Kyoto in 1997. At Copenhagen itself, Canada was recognized for obstructionism - an entirely new feature of our foreign policy - trying to thwart international consensus toward post-Kyoto targets. We won the prestigious Fossil of the Year Award for our efforts.
Canada was a pariah at Copenhagen because to lead - or even quietly follow - on climate change is regarded by Ottawa as extremely difficult and asking too much of Canadians, given that we are among the worst greenhouse-gas emitters per capita of any country on Earth. As a result, no government since Kyoto was signed has had the courage to do anything to reduce carbon consumption in this country, either on the industrial or consumer side of the equation. That would be too hard.
Nevertheless, the recalcitrant, obstructionist Canada of late 2009 has emerged from the back of the global classroom to seize the lectern on deficits and debt. Canada, to paraphrase John Kennedy, takes the lead on fiscal policy not because it's hard, but because it's easy.
It's easy because we have a much smaller federal deficit and national debt than just about any G20 country. It's easy because the agreed G20 target to halve deficits by 2013 is a much less aggressive plan than the Harper government committed to in its own budget. Meeting the G20 target will happen almost automatically in this country, as time-bound stimulus spending disappears.
And it's easy because Canadians did the heavy fiscal lifting in the 1990s, after a quarter of a century of red ink. But we have atoned for those fiscal sins of yesteryear. We are clean now, so we must preach the evils of deficits to the world.
To be sure, Canada has important lessons to impart on today's deficit-ridden countries. But let's be humble about our achievement, acknowledging that our experience might not apply to very many, if any, countries today.
In the mid-1990s, international bond markets held a knife to Ottawa's throat because of too many years of big deficits. We had reached a tipping point. In response, the government of the day set fairly modest deficit reduction targets - 3 per cent of GDP, to be precise - not an original idea, but one appropriated from the European Union.
And then the cutting started, modestly at first, aggressively later. Then dumb luck came along. After years of sluggish growth, the U.S. economy started firing on all cylinders, dragging us along for the ride, filling government coffers with unanticipated revenue. Presto, a modest deficit target becomes a balanced budget in three years.
That, in a nutshell, is Canada's recipe for countries that seek to eliminate their deficits. It can be summed up in seven words: Cut deep and pray for good luck.
Bono, the U2 front man and ubiquitous foreign-aid crusader, once said "the world needs more Canada." That may be true, but the world certainly doesn't need a lecture from Canada. It needs a humble Canada, one that can point to its successes, admit its failings and demonstrate that it's striving hard to improve itself. That's the mark of true global leadership.
Eugene Lang, a former Finance Canada official and adviser to three Liberal cabinet ministers, is co-founder of Canada 2020: Canada's Progressive Centre.