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It is a welcome development that the 20 world leaders assembled in Washington over the weekend could agree on some broad principles – to stimulate domestic economies, avoid protectionism, and tighten up regulation of financial markets.
But the agreement of the so-called G20 should not be mistaken for action. That will come as the leaders return home – or, in the case of the United States, as the new leader assumes power.
It is possible that in the coming weeks there will be some moves by the lame-duck U.S. president, George Bush, and Congress, notably in the form of help for the auto sector. But don't count on much, as Bush has opposed further economic stimulus. For the most part, the rest of the world will have to wait for president-elect Barack Obama to take over in January.
Given that Canada's – and, in particular, Ontario's – economic health is so dependent on selling goods to the U.S., we can only hope Obama and the Democratic-controlled Congress find ways to get American consumers buying again while not, at the same time, closing their border to imports.
Meanwhile, here in Canada Prime Minister Stephen Harper, who said during the fall election campaign that he would "never" run a deficit, wisely appears to have recognized the folly of that position. "We will do what we have to, to contribute to boosting global demand," said Harper after the G20 meeting wrapped up on Saturday. "This is not business as usual," added federal Finance Minister Jim Flaherty.
The specifics of Ottawa's stimulus – whether it will include help for the beleaguered auto sector, enhanced employment insurance and other measures that would help this hard-pressed province – remain to be seen, of course. This week's throne speech and next week's economic statement should provide the first answers.
