It’s all about the economy as G7 begins

Leaders will hear Canada’s strategy is spending, not restraint

ISE, JAPAN — A group of powerful world leaders is about to hear a starkly new take on what Canada thinks must be done to revive the stagnant global economy.

Prime Minister Justin Trudeau will promote Canada’s growthboosting plan to his Group of Seven counterparts this week in Japan.

Trudeau’s theme: government investment is better than belt-tightening.

This approach will sound different to G7 leaders than the message they likely heard from Trudeau’s predecessor, Stephen Harper.

The ex-Conservative leader, who lost power to Trudeau’s Liberals last fall, regularly called upon the global community to apply budgetary restraint.

Trudeau’s approach is expected to be well-received by most of his G7 peers at the two-day summit, which begins Thursday in Japan’s Ise-Shima region.

Most of the leaders have supported the use of fiscal tools to foster growth, but countries such as Germany and the United Kingdom are likely to stick to their cost-cutting approaches.

One of Canada’s closest G7 allies in the anti-austerity camp is Japanese Prime Minister Shinzo Abe, who met with Trudeau and International Trade Minister Chrystia Freeland on Tuesday in Tokyo.

“Prime Minister Abe has been a real pioneer in emphasizing the need for governments to use fiscal tools,” Freeland, who participated in Trudeau’s meeting with Abe, told reporters Wednesday in Tokyo.

“And, as you know, our government very much is in agreement ... So, we’ll be very pleased to engage in that discussion.”

Japan, however, has a huge amount of debt compared to Canada and has been forced to try a combination of approaches to lift growth, including asset purchases or “quantitative easing.”

The situation is better in Canada, where the Liberals say low interest rates combined with the country’s relatively low debt-to-GDP ratio have created good borrowing conditions.

As a result, they have committed to running years of budgetary deficits in order to double federal infrastructure spending over the next decade to $120 billion.

Trudeau is scheduled to get oneon-one time Thursday with French President François Hollande and German Chancellor Angela Merkel on the sidelines of the summit.

The G7 leaders will also discuss a range of other subjects, including security, refugees, health, climate change and the empowerment of women.

“I think we’re seeing a summit where there won’t be a single, burning issue,” John Kirton, director of the G8 Research Group at University of Toronto.

Kenjiro Monji, Japan’s ambassador to Canada, said in a recent interview that the global economy will be the “main theme” of the summit. He added it’s very important the G7 strikes a strong message about growth.