29 April 2010
Ottawa, Ontario
Prime Minister Stephen Harper today made the following remarks to the G-8/G-20 Business Summit organized by the Canadian Chamber of Commerce:
“Good morning ladies and gentlemen. Thank you Shauneen for that kind introduction. I’d also like to greet Perrin Beatty, President and CEO of the Canadian Chamber of Commerce and John Manley, in your dual capacity as President and CEO of the Canadian Council of Chief Executives, and as chair of the Munk Centre’s Advisory Board. Gentlemen, it’s good to see you again.
“Distinguished guests, it is a distinct honour for me to have the opportunity of addressing such a prestigious gathering. I’d like to thank Perrin and the Canadian Chamber of Commerce for organizing this vitally important Summit. It couldn’t come at a more opportune time. Now more than ever, we need our business leaders to come together to help articulate solutions to the economic challenges facing all our nations. Regardless of the issue, be it freer trade, financial reform or enhancing economic opportunities, you have the experience and expertise to make a very real difference in the lives of millions around the world. So thank you for your efforts.
“Ladies and gentlemen, as you are aware, in rather less than two months, Canada will host summits for both the G-8 and the G-20 nations. So I want to talk to you today about our priorities for these two summits, and our perspective on global governance. And I have some good news for some people present in this audience today. More on that later.
“Ladies and gentlemen, we’re living in one of those times of transition that history inserts between eras of relative stability. Someone who has lived a good long life will have seen such things before. The end of the gold standard. The rise of US-dollar dominance. The arrival of new vehicles of global economic governance, the G- series of Summits. The G-6, which was the G-7 when Canada joined, and eventually the G-8 including the Russia of the post-Cold War, and then the G-8 engaged in regular outreach with five major emerging economies. These global gatherings were tacit acknowledgements that the power to set the world’s economic rules and to respond to its economic problems had become increasingly diffused. We were already a long way from the days when financial authority was symbolized by Fort Knox. All that took less than one lifetime.
“Now, in the past two years, we have witnessed the first crisis of the globalized economy. It exposed serious deficiencies in the oversight of financial institutions in some countries, deficiencies which were quickly transmitted throughout the world, causing widespread unemployment and hardship. And, it forced us to accept that effective global economic governance requires all major players at the table, hence the G-20, along with reforms to important international institutions like the International Monetary Fund and the Financial Stability Board.
“Our government has a straightforward goal for the coming G-8 and G-20 gatherings, expressed in the Summit theme: “Recovery and New Beginnings”. If there is to be either recovery or a new era of stability in the global economy, it will be imperative, absolutely vital, that the G-20 foster at its future gatherings the same sense of shared responsibility towards the global economy that it has shown over the last 18 months.
“I have called this the principle of ‘enlightened sovereignty.’ If the G-20 is to be the effective force that it is intended to be, we must all realize that the global economy is no longer just the sum of national economies. It is no longer what’s left over after national self-interest has been served, a zero-sum game in which for one side to win, another must lose. On the contrary, we must advocate and develop approaches that are viable for all to practice and from which all must benefit.
“More specifically, the G-20 must move to complete and then exit from our short-term stimulus commitments. The Greek crisis reminds us that governments cannot incur debt without limit. And we must begin to focus on development and implementation of the ‘Framework for Strong, Sustainable and Balanced Growth,’ that was agreed to in principle in Pittsburgh. I believe this will determine whether the G-20 truly flourishes as ‘the world’s premier forum for economic cooperation,’ as it has labelled itself.
“Admittedly, the G-20 has so far done impressive work. Despite the uncertainty that remains in the global economy, the credible promise of coordinated, worldwide stimulus at the outset of the recession served, as most analysts admit to bolster confidence and to sustain jobs and economic activity. In effect, it plugged the dyke and prevented a deluge, which, as you well know, could have drowned the global economy in a true worldwide depression. We acted and avoided a cataclysm. However, on other matters, we have only agreement to act. What matters will be acting upon those agreements. Therefore, June’s discussion must be less about striking new agreements than establishing accountability for existing ones.
“Apart from stimulus, the G20 must show leadership on two other files: fighting restrictive trade practices – protectionism in other words – and the reform of financial regulation. Again, the temptation to act alone for narrow self-interest needs no explanation. The country that can export without penalty from behind its own tariff barrier has an obvious advantage. But, that was tried 80 years ago and the Great Depression was the result. May Smoot and Hawley rest in peace, and their ill-conceived idea with them.
“The call for reforming financial regulation is more complex. Many of the problems we’re dealing with today can be traced back to irresponsible behaviour that, in the end, had to be backstopped with taxpayer dollars. Understandably, there have been calls for rigorous, even punitive measures to be taken against those responsible.
“For instance, if you’ve been following the papers, you’ll know one refrain is a global bank tax. You will also know that Canada is not part of that chorus. Just as you can’t tax an economy into prosperity, you can’t tax the financial sector into stability. There is a better response, one in which Canada has some expertise. Ladies and gentlemen, when the greatest economic test of our times challenged the world’s banks, when banks and financial institutions were collapsing all around us, Canada’s banks rode high in the water.
“They maintained healthy leverage ratios. They avoided exposure to toxic assets. No major Canadian financial institution failed. And none needed a government bailout. This strength has been noted by the IMF, Moody’s, the World Economic Forum, among others. In fact, the World Economic Forum has said we have the strongest banking sector in the world.
“The key for our banks, apart, of course, from their own strong management decisions has been strong, active supervision with a regulatory framework designed to avoid reckless risk and ensure transparency. That, and to properly link risk, performance and reward. These are the mechanisms that Canada will encourage when the G-20 leaders discuss the financial sector. Because they work. Speaking of Canadians doing things that work I do want to note that last week the IMF released new growth projections. Its view: of all the G-7 economies, Canada’s will grow fastest this year and next. ‘Canada entered the global crisis in good shape and thus the exit strategy appears less challenging than elsewhere.’
“In other words, ladies and gentlemen, it is what we have said for some time, Canada was the last of the major developed economies to be pulled into this recession, and we will come out the fastest and the strongest of them all.
“Now, just a few words on the G-8. The role of the G-8 will be to focus on broader issues: development and democracy, peace and security.
“Sadly, it has no shortage of work. Terrorism, piracy, the problems of poverty and underdevelopment – these are all matters that can best be addressed through close cooperation among friends and like-minded allies. That is why in particular, we will be working on our maternal and child health initiative that G-8 development ministers endorsed yesterday. It is intended to combat the shocking mortality among women and children in the developing world.
“However, the gravest threat to world security, bar none, remains nuclear weapons falling into the wrong hands. Here, international cooperation is essential. I draw some hope from the Washington nuclear safe-storage agreement earlier this month. It is actually a textbook example of nations uniting in their own best interests. Returning spent nuclear fuels to source will help keep fissile material away from those most likely to use it. This should remind G-8 leaders at Muskoka that progress is possible. But, we must strive for it.
“Now, earlier I said I had some good news for some people in the room. I do, but it’s really good news for all Canadians who are concerned about the future. Our chairmanship of the G-8 and G-20 Summits comes at a challenging time. The economy of the world remains uncertain. Various nations and regions are in turmoil. The relevance of international institutions is changing. New technologies are altering markets and, sometimes, affecting security. Everything is in flux. In a digital world, even the lines on the map supposedly denoting the borders of sovereignty, don’t seem to mean what we once presumed.
“At evolutionary times such as these, the greatest challenge is for our understanding of the world to keep pace. Fortunately, for Canadians, the Munk School for Global Affairs at the University of Toronto, has taken up this challenge. Established and nourished through the magnificent generosity of two of Canada’s leading citizens, Peter and Melanie Munk, the school has already earned a reputation for excellence in international security studies. Demonstrated success deserves reinforcement.
“I am therefore pleased to announce that our government will financially support an expansion of the school. It will become known as the Canada Centre at the Munk School for Global Affairs, and will develop deep expertise in global security concerns, focussed on national and cyber security. In a knowledge society, a nation’s most valuable commodity and its best defence, is knowledge. I would like to take this opportunity to thank Peter and Melanie for their foresight, and for their patriotic willingness to give freely so that Canada will be well equipped for the challenges of the future.
“One last thing: the world will change around us. Canadians should know, however, that the principles guiding us will not. Canada will continue to seek to do what is right. That means working with others. But it does not mean just going along or retreating to the role of a morally neutral broker when critical matters are at stake. In such circumstances, neutrality is no virtue, and impartiality a reproach to our consciences.
“Canadians expect their government to stand for freedom, democracy and justice, to choose right, and passionately uphold it. At home. Abroad. Now, and in the future. As Canadians have always done. Ladies and gentlemen, thank you for your invitation to join you today. I see you have a fascinating agenda and with some regret, I leave you to it.
“Congratulations again to the Canadian Chamber of Commerce, and once more to those who have declared their willingness to undertake work of national importance at the new Canada Centre for Global Security Studies.
“Thank you.
“And I hope to see you again soon.”
