The Recession

I just experienced a very enlightening lunch event that I was invited to. Refreshing first because I am usually the one taking clients and prospects to lunch, sporting events and the like but this time I was the prospect and was invited to hear the Honorable Minister of Finance, Jim Flaherty address the Toronto Board of Trade... a pleasant change.

I really had no expectations for the speech I was about to hear but was keenly interested in what one of our leaders at the centre of Canada's efforts to minimize the recession had to say.

I learned several things which I thought I would share. First some pertinent facts, according to Mr. Flaherty

1) Canada entered the recession with no deficit, contrary to many other countries in the G20
2) Canada's current national debt to GDP ratio is 29.1%, contrary to the United States in the mid 40's and Japan much higher (somewhere near or above 100% according to wikipedia)
3) Mr. Flaherty by running deficits for the next 3 to 4 years will increase the debt to GDP ratio to 32.2% and then immediately bring it back down in the years coming out of the recession
4) Canada is running a higher deficit than most G20 countries who all agreed to run a minimum of 2.0% to stabilize global economies. Canada has decided to run a 3.5% deficit. The United States will run a much higher deficit due to the dramatically worse situation there.
5) The planned deficits are not long term programs but short term funds that have a "use it or lose it clause" which will ensure that we do not end of up with long term debt from entrenched or structured programs.

All facts which I find very heartening and postive.

The Minister also shared some personal anecdotes and did some "cool" name dropping. Saying how in his conversations with fellow finance ministers, the US Secretary of the Treasury, the UK's Chancellor of the Exchequer that all of these folks expressed praise for how Canada's financial system and government were well run, stable and able to deal with the current situation. Minister Flaherty is also co-chairing a committee to deliver a report to the leaders of the G8 countries in early April. Again very positive to know that Canada is playing a significant role in sharing our views and progress with world leaders about this current situation.

Finally on a personal note he said [I'll quote him as best as I can] "I plan to take the Island Ferry to the airport to catch a flight on Porter air later. It reminds me of many of our parents and grandparents who came to this country by ship from Europe and other parts of the world. Their experiences and challenges in building a life in this country were much more difficult and trying than what we are currently experiencing. We are Canadians and we will persevere and come out of this recession strong and sooner than most" or something to that effect. I certainly echo that perspective. Although the current times are difficult most of us are still very fortunate to lead a great life here in Canada.

I found Mr. Flaherty to be very passionate and sincere about his desire to help Canadians and he conveyed a sense of his diligince and urgency to work with our local, provincial and federal leaders as well as his international counterparts to "cushion" Canadian families and businesses from the effects of the recession. This gave me great confidence.

I continue as ever to work hard to build my business and provide employment opportunities to our staff and contribute in a small way to our economy and country.