Prime Minister Stephen Harper has recently assured Canadians that we are among the fortunate as a “synchronized” global recession is rocking all regions of the world.

Few economic models predicted that the crisis in the United States’ financial sector would create and sustain this international downturn. Unlike previous recessions, interest rates are at record lows and many countries are facing the risk of deflation. The prime minister is working hard to expedite the approval process for stimulus spending, which will deliver temporary and targeted financial assistance.

The federal government saw this recession coming, but the breadth and scope were virtually impossible to predict. Our preparation is paying off. According to the World Economic Forum, we have the strongest banking system in the world, which is a major advantage during a world financial crisis.

We also have the best fiscal position in the G7, which is the group of seven finance ministers from industrial countries who meet to discuss common interests. Canada has the lowest debt-to-GDP ratio and strength in off-balance-sheet items, such as a solvent public pension plan. At the same time, the Bank of Canada has an excellent record of low and stable inflation. Canada should avoid both significant deflation and renewed inflation, both of which are significant risks in other countries.

Canada enjoys a highly educated, skilled, largely mobile, modern workforce. We have real economic diversity, including commodities that will be in high demand as the global economy recovers. Our country is receiving rare recognition these days in the United States and around the world for these strengths, and we all have reason to be proud.

Tax reductions introduced in four successive federal budgets have reduced the tax grab in this country to nearly the lowest level in 50 years – on par with the era when Prime Minister Diefenbaker was in office.
We are opening markets to trade. A few years ago Canada had free trade agreements with only five other countries, despite being one of the most trade-oriented countries in the world. We recently concluded deals with seven more, and we are finally making progress on internal trade with our provinces.

Our government is committed to principles-based, prudent regulation of the private financial sector and has established national securities regulation. In the best Canadian tradition, we are committed to avoiding extremes in this area. We have avoided the extreme of the unregulated, or barely regulated, financial and mortgage industries that has caused such grief around the world. We will also avoid drifting into a micro-managed, nationalized sector, which would cause its own problems in the future.

Can we afford to stimulate our economy? Yes, because we are entering this crisis in a strong financial position. Like virtually every other country, we will be running a deficit over the next couple of years, but our deficits will be temporary with our stimulus spending time-limited. Given the strength of our balance sheet, we will see almost no change in Canada’s long-term financial position.

Amid all the doom and gloom that we see in the media, there is evidence that we’ll come out the far side of this recession stronger than ever before.

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The audio version of Garry's March 16, 2009 op-ed column can be heard by clicking here