Two PMs agree: the economic storm is gathering
British leader David Cameron joins Stephen Harper in mutual Tory refrain: international collapse is near if government debts aren't cut.
The good news? The two prime ministers were in agreement.
The bad news? They agree that huge economic storm clouds are on the horizon.
The Canadian Press has the story:
OTTAWA -- Prime Minister Stephen Harper used a visit by his Conservative British counterpart Thursday to lay the groundwork for looming cuts to Canada's public service.
Standing next to British Prime Minister David Cameron, Harper warned of a "devastating'' global recession if sovereign debts aren't curbed, saying Canada could afford not to cut any government services at all.
"We don't have to,'' said Harper.
"I think we could probably get away for years without finding any savings in government.''
But, the prime minister continued, "we're going to find some modest savings here to make sure we're never in the situation that Prime Minister Cameron found himself in when he came to office, and even some of the far worse situations on the European continent.''
Cameron joined Harper on Thursday in issuing a grim warning of a second recession if world leaders do not take bold corrective action.
"We're not quite staring down the barrel, but the pattern is clear,'' Cameron told a joint session of Parliament.
Cameron later told reporters how he inherited an unacceptably high deficit that stood at 10 per cent of GDP when he won power last year, one that forced him to reign in government spending.
"We were borrowing more than Greece in that year,'' he said. "We had to embark on a program of getting public spending under control and even putting up some taxes to show we were going to be able to pay our way in the world.
"When you inherit a deficit that size, you don't have any choice.''
The Harper government says it plans to cut $4 billion in public spending in order to balance Canada's books.
NDP foreign affairs critic Paul Dewar said he didn't want to see Harper use Cameron's visit to justify cuts to Canada's federal bureaucracy.
Canadians understand the importance of public services, Dewar said before Cameron's arrival.
"I think Mr. Harper shouldn't be using Mr. Cameron as a foil to ... do his work. I don't think that would be accountable, responsible. And I think people would see through it.''
Cameron, fresh from a speech at the United Nations, lauded Canada's economic record saying this country "in the last few years, has got every major decision right,'' as a smiling Harper looked on in satisfaction.
But the leader of Britain's coalition government said the rest of the world is awash in debt: "This is not a traditional, cyclical recession, it's a debt crisis.''
The solution, said Cameron, "is not simply a question of using conventional fiscal and monetary levers to stimulate growth until confidence and normal economic activity returns.''
Cameron made an impassioned plea for countries to work together on freer global trade as one solution to the impasse.
"Because the truth is that trade is the biggest wealth creator we've ever known. And it's the biggest stimulus we can give our economies right now.''
Harper, speaking just before Cameron, told the House that "neither of us will be accused of exaggeration if we acknowledge that the most immediate test confronting us all is to avoid the devastating consequences of a return to global recession.''
He cited global co-ordination, ending protectionism, flexible exchange rates and deficit reduction as key tools.
"Without things such as these, we will not avoid such a recession,'' Harper said.
Harper lauded Cameron's handling of the U.K.'s financial woes, which has included deep cuts to the public service.
He also commended Cameron for "his consequential handling of the difficult fiscal choices confronting the British economy.''
The economic gloom threatened to overshadow what was otherwise a political love-in between the two leaders.
The opposition benches remained largely silent in the face of repeated standing ovations by the Tories across the aisle as Cameron detailed his economic prescription.
Cameron, who was elected in May 2010, lauded everything from Canada's military contributions to its "moral clarity and political leadership.''
Harper in turn cited Cameron's "firmness of purpose.''
"I can safely say that where it matters most, your thinking parallels that of our own government.''
Cameron stopped short of calling on Harper to take the freeze off overseas development aid, and commit to raising spending in that area to the UN goal 0.7 per cent of GDP as Britain has done. Canada's $5 billion aid budget is to remain static until 2015, over which time its current 0.33 per cent of GDP will fall.
But the British leader delicately espoused the line of advocates of greater aid spending, without going too far to offend his host.
"If we'd put a fraction of our current military spending on Afghanistan into helping Afghanistan develop 15 or 20 years ago, just think what we might have been able to avoid over the last decade,'' said the British prime minister, drawing applause from around the Commons.
The two leaders discussed the situation in Libya, but Harper clearly signalled their talks on the world economy, including the European debt crisis, were paramount.
Earlier Thursday, Harper and Cameron joined the leaders of Australia, Indonesia, Mexico, and Korea in sending an open letter to French President Nicolas Sarkozy, the G20 chairman, calling for strong action at the November Cannes summit to help ensure global economic stability and growth.
Finance Minister Jim Flaherty also warned of a repeat of the October 2008 recession if action is not taken.
Thursday's address to Parliament was Cameron's first formal visit to Canada, but he had attended the G20 Summit in Toronto shortly after forming his coalition government in 2010.
But Tony Blair was the last British PM visit Canada bilaterally in 2001.