Had they seen it coming, shouldn’t they have publicly shared it with (i) the Canadian people and (ii) our biggest trading partner in a very aggressive way so as to help avoid a mutual recession?

(i) Absolutely not. No government publicly muses about a crisis months in advance of it happening, otherwise it becomes a self-fulfiling prophecy

(ii) Maybe they did, but did so behind closed doors. See (i) above.

“The Economist” says…
Stéphane Dion, the Liberal leader, bravely proposes a carbon tax, which he claims would be revenue-neutral. Simply to rubbish this as a “crazy” idea that would “screw everybody”, as Mr Harper has done, shows a disappointing lack of leadership, and is grounds enough to deny the Conservatives a majority.”

At least the Economist didn’t buy Dion’s assertion that the proposed tax, which he plans to introduce regardless of economic circumstances, is revenue neutral.

The Economist is also correct that Harper missed a golden communications opportunity in attacking the carbon tax. What Harper should have done is to point out that it is lousy environmental policy.

The tax doesn’t discourage fossil fuel consumption in the one area where it should have had the biggest impact – gasoline. By exempting gasoline (the transportaion sector accounts for 40 percent of all GHGs in Canada) the Liberals showed they see the carbon tax as a symbol not a real environmental tool.

Moreoever, Harper should have gone after the fact that the tax is not being used to advance green tecnologies, but rather it is a revuenue source for a bunch of Liberal friendly social programs such as daycare. Since when should our government be using a carbon tax to pay for daycare?

Canadian banks won’t look like such a safe bet if they start buying dodgy Yankee banks, as seems to be in the works :

http://www.financialpost.com/story.html?id=866521

Also, the Bank of Canada has already pumped $20 billion into the banking system in Canada :

http://www.cbc.ca/money/story/2008/10/03/bankofcanada.html

The Bank of Canada in co-ordination with the Bank of England, the European Central Bank, the Swiss National Bank and the US Federal Reserve put another $3 billion into the system :

http://www.bank-banque-canada.ca/en/notices_fmd/2007/not121207.html

Canada has a financial exposure in this crisis. Time to stop pretending.

Harper and Flaherty claim that their response to this upcoming crisis was to accelerate the GST cut.

Unfortunately, that was the worst possible thing they could have done since in a panic/recession situation, everyone sits on their money and does not spend. Therefore the benefit of a GST cut becomes increasingly neglible.

If they had provided an income tax cut, that would of at least put more money into our pockets up front increasing the likelihood of our continuing to spend money.

Failing that, if they had just forgone the GST cut and provided the manufacturing sector of Quebec and Ontario (and the rest of Canada really) with a Green Loans program of 5-6 billion dollars which would have helped to maintain or create new “green sector” jobs (fuel efficient cars, solar cell & wind turbine manufacturing, etc.). Even Bushco knows enough to do this (with a $25 billion green loan fund being create south of the border).

So yes, Steve and Jim did react a year ago to the upcoming crisis. But they did pretty much the worst thing they could do: provide a useless tax decrease that did not help our economy or cushion the current economic blow.

Mulletaur, we have exposure because we’re not an island. In a global credit squeeze, if we are a part of the globe, we feel it too. We have liquidity problems because everyone is scared of lending, but the difference between us and other countries is our banks do not have capital issues. We are doing bank of canada liquidity injections, not government of canada capital injections (like the 700 billion dollar taxpayer funded congressional bailout in the US was).

Mulletaur, I agree. The “don’t worry, be happy” line irritated me, and it seems most of us were skeptical. But to be quite honest, I’m even more annoyed with the doom and gloom Layton and Dion approach. Anyway, I’m sure people will agree or disagree based on what side of the political spectrum they are on, but in the end, what we can all agree on, is that this turned out to be a BAD BAD BAD time for an election. I’m also kind of concerned about what will happen if they need to transition finance to someone else, like if Flaherty is (and probably will be) defeated in the next couple days. Ugh. We need to do something about this faltering political system, lest we look back at 2004 and see it as the year when Canadian politics became Italyified.