Dion rips Conservatives' policies in face of economic crisis

Liberal Leader Stéphane Dion was quick to lambaste the Conservatives' economic record as the House of Commons convened Thursday, saying the Harper government did not do enough to sidestep the global economic crisis.

"While there is no doubt that the global economic downturn has had significant impact on Canada, that impact has been made worse by this government's previous economic mismanagement," Dion told the House, a day after Governor General Michäelle Jean delivered the Conservatives' throne speech.

The Liberal leader said the Conservatives have squandered a $13 billion federal surplus since coming to office in 2006, including cuts to the GST rather than productivity-enhancing income- and business-tax cuts.

He questioned the Conservatives' decision to eliminate a $3 billion contingency reserve fund created by previous Liberal governments, saying the Harper administration was conservative only in ideology and not fiscally.

The Conservatives are on track to increase government spending in the next year by 25 per cent — or $40 billion — from 2005-2006, said Dion.

"It is this Conservative government that became the highest-spending government in Canadian history."

And in a repeated criticism, Dion said the Conservatives look "ridiculous" for pledging in the election campaign to rule out a deficit. 

Dion's remarks came as Canada's independent parliamentary budget officer said in a report the country is unlikely to avoid the effects of an expected global recession and faces the possibility of a deficit for the next three budgets.

Finance Minister Jim Flaherty, who had repeatedly asserted his government would not run a deficit, has since backtracked. He has said that while a deficit is unlikely this year, he cannot rule out future deficits.

Despite his strong criticisms of the Conservatives, Dion stated his party does not wish to bring the government down, adding it would be irresponsible to subject Canadians to another election so soon.

Canadians expect the House of Commons "to function in a less partisan, more constructive and collaborative manner," he said. He added that the government has to be responsible for "setting a better tone" and being "more forthcoming than it has been up to now."

Harper defends economic policy

Prime Minister Stephen Harper's address Thursday to the throne speech reiterated pledges made in the election campaign and outlined in Wednesday's speech.

His government would act "carefully and expeditiously in dealing with the global economic crisis and the risks it presents for our country," said Harper.

"I think we can all agree that balancing the budget by raising taxes, by cutting essential government activity or by refusing necessary intervention in the midst of a global economic crisis would be a cure worse than the disease," he said Thursday.

In a new development, Harper said he would restore funding to Canada's three regional economic development agencies.

He provided no more specifics.

Also, Southern Ontario, which has been hit hard by layoffs at auto plants over the past year, would receive more financial aid through "federal regional development funding," said Harper.

"A lot of that, I'm sure, is to do with the automobile industry or the parts industry, but [Harper] didn't actually specifically mention them," said the CBC's senior parliamentary editor Don Newman.

Canada was well positioned to take on its economic challenges, Harper said. It is "critically important that we avoid returning to the structural deficits that so handicapped Canada during the mid to late 20th century," he added.

Harper said Canadians gave his government a stronger mandate in the Oct. 14 federal election, which was "rare indeed" in difficult economic times.

"I look forward to the Liberal party coming forward with specific suggestions for savings, following its own electoral platform which said it could find $12 billion in federal savings. So we look forward to their advice."

Dion, acting as a caretaker leader until the Liberals can choose his successor next May, cited three criteria by which his party will assess government initiatives:

• Protection and creation of jobs.
• Safeguarding people's pensions and savings.
• Fiscal responsibility in keeping government spending under control.