At the Pittsburgh Summit, Canada will advocate for the full implementation of macroeconomic stimulus measures. Canada has pursued an unprecedented stimulus package representing 4.2 per cent of gross domestic product for 2009 and 2010, far exceeding the two per cent commitment at the G20 Summit in Washington.
While the Canadian economy has been affected significantly by the global economic crisis, it is now moving back into positive growth. The International Monetary Fund forecasts that Canada will have the smallest economic contraction in the G7 this year, and one of the fastest-growing economies next year. Nevertheless, the global recovery is fragile and sustained official stimulus will be needed to support the recovery until private demand re emerges.
At the Pittsburgh Summit, Canada will also reaffirm its commitment to combating protectionism and promoting trade liberalization. Canada is demonstrating leadership on this issue, having unilaterally reduced tariffs and launched consultations on further reductions, lowered investment barriers, provided an economic stimulus package without trade bias and aggressively pursued free trade agreements. G20 countries need to take concrete steps to liberalize trade.
Canada will continue to press for better domestic financial sector regulation. This includes reinforcing national financial systems with a macro-prudential overlay that promotes a system-wide approach to financial regulation and supervision.
At the London G20 Summit, leaders reached an agreement about providing international financial institutions with the resources they need to address the global crisis and support growth among emerging markets and developing economies. Canada announced a contribution of US$10 billion for IMF emergency assistance and $200 million to the International Finance Corporation's Global Trade Liquidity Program as part of this commitment.
The G20 must also maintain its efforts to avoid another crisis. Looking ahead, countries will need to develop appropriate exit strategies for the unprecedented fiscal, monetary and financial measures that have been taken. Just as Canada's stimulus measures required coordination, so too will its exit strategies.
On the path to recovery, G20 countries will need to address the new sources of global growth as the United States will no longer be the “consumer of last resort.” The U.S. is proposing to create a framework, which would be supported by a G20-led peer review process, to ensure that countries' internal economic policies are consistent with both domestic and global economic stability.
The G20 is a forum that promotes collaborative action on global financial issues among 19 of the world's largest industrial and emerging market economies and the European Union. G20 economies comprise 90 per cent of global gross national product, 80 per cent of world trade and two-thirds of the world's population. Canada helped establish the G20 in 1999 in response to the financial crisis of the late 1990s and chaired the first three meetings of finance ministers and central bank governors. The Pittsburgh G20 meeting of heads of government and state will be the third of its kind in less than a year. The first meeting was in November 2008 in Washington, D.C. The second meeting was in London in April 2009. Several international organizations have been invited to prior summits.
