We may have avoided another election, but the jury is still out on the wisdom of the economic stimulus

by Jim Meek

Liberal Leader Michael Ignatieff let his better angels prevail in June, when he decided to support the government's $46.6-billion economic-stimulus plan. As expected, he tied conditions to his consent: The Harper cabinet had to speed up EI reforms and fast-forward spending under the plan.

Ignatieff framed his decision properly—if a tad heroically—by saying he had done the right thing not for his party but for his nation. The Liberal leader's pledge of allegiance was a little hard to take, but he did clearly want to avoid a federal election. Good thing too. The alternative was defeating the Harper Conservatives in a confidence motion in the House of Commons and sending Canadians back to the polls for the second time in less than a year. Frankly, it is hard to imagine what benefit Canada—or this region in particular-would gain from another election.

Indeed, it's hard enough to figure out exactly what Atlantic Canada will get from the stimulus plan itself. As advertised, the plan sets aside money for infrastructure projects in Atlantic Canada, including sewers, water-treatment systems, and roads. The government's 234-page stimulus report card, released on June 11, says 3,000 projects had been approved in the nation. Breathtaking examples in this region include a better breakwater in Ochre Pit Cove, N.L.; an enhanced work-sharing plan that allows more Michelin workers to go on pogey in Nova Scotia; storm-sewer upgrades in Summerside, P.E.I.; and upgraded port facilities in Belledune, N.B.

Here are the first two problems with the regional list. One, once the jobs are gone, they're gone for good. Two, the Atlantic elements of the stimulus plan seem to be based on the delusion that we can pave our way to permanent prosperity. As we now know, this isn't so. Here's the third crucial problem: As Ottawa offers transitional assistance to Atlantic Canada, it is pouring something like $12 billion into the auto sector in Ontario.

This is intended to help Toronto and its satellite cities build a permanent highway to ongoing prosperity, not a flimsy bridge to next year. It is, in short, a deep investment in the province's long-term growth—one that is aligned with the prime minister's support for Ontario's plan to establish a knowledge-based, research-driven IT powerhouse in the Greater Toronto Area. This would centre, as it should, around the University of Waterloo's storied computer engineering faculty and existing firms such as Research in Motion (RIM).

Frankly, I don't wish anything less for Ontario, but we should all demand equal treatment for Atlantic Canada. Instead, Ottawa is offering us additional short-term make-work and welfare programs—as if it is useful to perpetuate the region's most chronic internal misery and saddest external stereotypes. This seems particularly unhelpful at a time when there is so little consensus on the wisdom of Canada's stimulus package.

Indeed, even the non-partisan, high-level reviews of Ottawa's economic performance have been mixed. In a speech in Montreal on June 8, World Bank president Robert Zoellick said Canada should stop handing out economic goody baskets. More stimulus spending, he said, would be "like a sugar high. It gives you a boost but it doesn't sustain itself." In an address to the same conference three days later, Bank of Canada governor Mark Carney begged to differ. It's too early, he said, for Ottawa to turn off the money taps.

It would take a brain bigger than mine to sort out the conflicting views of two of the world's top bankers. But I do know this: Most of us listening to the veritable Babel of prophetic voices could only conclude, as John Kenneth Galbraith did, that "the only function of economic forecasting is to make astrology look respectable."

I'm also certain that shovel-ready projects are no cure for our chronic ills. What we need instead is long-term growth built around sustainable industries. In short, we must fight like hell for the Ontario model. In doing so, let's identify winning sectors and initiatives, which could include New Brunswick's energy hub and the commercialization of university-based research in medicine, ocean science, and IT.

In short, let's do Michael Ignatieff one better and give our own better angels some wings and a chance to soar.

Jim Meek is a freelance writer and consultant with Bristol. He can be reached at jmeek@bristolgroup.ca.