No early stimulus for Canada

With the United States announcing another stimulus package to revitalize its economy, this time a staggering $800-billion, the Canadian federal government is under increasing pressure to do something similar, and quickly.  But while Finance Minister Jim Flaherty will present the annual fall fiscal and economic update today in the House of Commons, he has already made it clear that he will not be announcing any significant spending or tax initiatives until next yearÔÇÖs budget. ┬á┬á Critics are many, and furious. "Around the world, governments are taking this economic crisis seriously, and they're taking strong and bold action," said NDP leader Jack Layton in the House of Commons earlier this week. "Economists of virtually all stripes are saying dramatic action is needed, and it's needed right now. We have our government saying they don't intend to do anything until 2009."┬á┬á Jayson Myers, an economist himself and chief executive of the lobby group Canadian Manufacturers and Exporters, said his members are desperate for help. "One thing I would like to see in the update is a sense of urgency, some sense of the importance of dealing, especially, with the credit problems before they have a major impact on industry," he said.┬á┬á "I'm really afraid we'll see this financial meltdown translating into an industrial meltdown, and it'll be too late to respond after we get official statistics from Stats Canada."┬á┬á Any stimulus package will have to be huge to make a lasting difference, but the Canadian governmentÔÇÖs line is that it is too early to tell which measures are most likely to have the desired effect.┬á┬á G20 leaders agreed in Washington earlier this month to introduce stimulus plans worth two percent of their GDP. In Canada's case that would amount to about $32-billion. ┬á┬á One thing rankling the opposition is that it suspects Prime Minister Stephen Harper will count the money offered in tax cuts earlier this year towards that target, reducing the amount of new money required. ┬á┬á Mr. Flaherty hinted as much in the Commons. "The GST reduction is permanent,ÔÇØ he said. ÔÇ£The income-tax reductions are permanent. The business tax reductions are permanent. Some more tax reductions come into force next year in 2009. This is a permanent stimulus to the Canadian economy." ┬á┬á Flaherty also said the budget will be moved up to ensure stimulus is introduced as soon as possible, but declined to give a date.  ┬á┬á*┬á┬á┬á┬á┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á┬á┬á┬á *┬á┬á