Trudeau to promote spending at G7 meeting
I SE, 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 growth-boosting 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 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 IseShima 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 costcutting approaches.
One of Canada’s closest G7 allies in the anti-austerity camp is Japanese Prime Minister Shinzo Abe, who met Tuesday in Tokyo with Trudeau and International Trade Minister Chrystia Freeland.
Japan has a huge amount of debt compared with 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.
“Canada, at this meeting, will be speaking strongly on the side of investing in growth, rather than in favour of austerity,” Freeland said.
The government believes the G7 provides a good forum to share Canada’s approach.
Trudeau is scheduled to get one-on-one time Thursday with French President Francois Hollande and Ger- man Chancellor Angela Merkel. He likely will have a tough time persuading Merkel to make a big shift away from her cost-reducing stance.
Canada is also expected to try to encourage G7 partners to join Ottawa in refusing to pay ransoms to kidnappers.
The issue is of particular significance for Canada after militants in the Philippines beheaded Canadian hostage John Ridsdel last month. Ridsdel was kidnapped alongside fellow Canadian Robert Hall, who is still being held by the group.