Invest in infrastructure, skills development, premiers urge

Canada's provincial and territorial leaders urged the federal government Monday to inject money into infrastructure and skills development to ensure the country emerges from global economic turmoil on steady feet.

The leaders made the statement after a half-day emergency meeting in Montreal to discuss how to deal with the growing financial crisis.

In a joint statement, they expressed confidence in Canada's economic fundamentals but acknowledged that turbulent markets will affect Canada.

"We don't want to sugarcoat the challenges on the one hand, but we don't want to undermine confidence on the other hand," said Manitoba Premier Gary Doer.

To minimize the effect of financial turmoil in the long term, the premiers and territorial leaders want Ottawa to invest in infrastructure and innovation to improve the country's productivity and competitiveness, and vowed to do so within their provinces as well.

"We also have to innovate and build on the future skilled and knowledge economy so that while we're coping we're also growing," said Doer.

In good shape to weather recession: Williams

Newfoundland and Labrador Premier Danny Williams said that Canada is in "very good shape" to weather an economic storm.

"We've been through recession before, we'll be through recession again. It's a little more serious this time — it's a little deeper," said Williams.

"I'm quite confident that our economy is going to stand the test of time."

Earlier this month, the country's top economists predicted Canada is headed into a worse recession than anyone expected, one that could last until almost 2010, as the country deals with a sputtering U.S. economy, tumbling oil prices and falling domestic demand that will hurt the country's growth prospects for the next few months.

The leaders also said both federal and provincial governments need to work with the federal government to find ways to help the beleaguered manufacturing sector reduce costs.

Both Quebec Premier Jean Charest and Doer cited modest gains in their provinces' manufacturing sectors since last year, thanks to a lower dollar, but they said manufacturing is still struggling and worried about the effects of the international credit crunch.

Ontario Premier Dalton McGuinty, whose province has one of the hardest hit manufacturing sectors, did not attend the news conference. McGuinty, New Brunswick Premier Shawn Graham and Nova Scotia Premier Rodney MacDonald left right after the meeting due to prior commitments, Charest said.

Divided over deficits

The premiers, however, remained divided on whether it's acceptable for the federal government to run a deficit in troubled times.

In their joint statement, the leaders stated each would maintain a "prudent and responsible approach" to managing public funds.

Speaking later to reporters, British Columbia Premier Gordon Campbell said he's not in favour of deficit financing.

"It's taken more than a decade to get out of the hole that we've dug," said Campbell.

Ontario Premier Dalton McGuinty, however, said earlier in the day that he does not want the federal government to balance its future budgets on the back of the provinces and municipalities.

He outlined infrastructure, education and health care as the big challenges facing his government.

"The first thing that we need to do together is to ensure that any policies that we might deploy don't further harm Canadians and Ontarians," he told reporters.

Ontario is slated on Wednesday to release its first economic statement since the global economic turmoil began. Ontario Finance Minister Dwight Duncan has already hinted that the province may run a deficit.

But Campbell said before the meeting that the current economic crisis meant political leaders across the country "have to act differently."

"I don't think we should be asking the federal government for one cent," he told reporters on Monday. "I think we should be saying, 'What can we do that will save families across the country money?'"

Next meeting

The prime minister declined an invitation to participate in the emergency meeting in Montreal, but has said he will hold a first ministers' meeting of his own later this year. No date was set. 

The leaders urged Prime Minister Stephen Harper to hold the meeting as soon as possible, but specifically requested it be well prepared.

"This isn't just a meeting to go around the table. This has to be a meeting where a lot is done in advance," urged Charest.

Relations between the Quebec premier and the prime minister are believed to be strained after Charest criticized Harper's Conservative government during the recent federal election campaign.

During the Francophonie summit over the weekend, Harper said his goal is to ensure protectionist sentiments don't start running amok and "to make sure we don't start slamming our doors."