Q: We have Stephen Harper now embracing targeted bailouts and large deficits. Is conservativism dead at the federal level in Canada?
A: No, we’re just dealing with the times and the realities we have. You asked about bailouts in terms of the auto sector. What we’ve done there is the only thing we can do under the circumstances. When a car is manufactured in this country, in North America, it crosses the border several times in assembly. It’s integrated in all aspects from the beginning of production to the marketing stage; it’s a completely integrated industry. The United States is engaging—is going to engage—in a government-directed restructuring. Either we participate in that in some way, or the industry will be entirely restructured out of Canada and we will lose 500,000 jobs in six months.
Q: Are you going to do any other industries besides the auto industry?
A: Obviously the government’s preferred approach, as you know, is not to provide direct assistance to industry unless it’s necessary for competitive reasons. Our preferred way of going is to invest in public infrastructure, to keep taxes low, business taxes low, [to keep a] competitive environment.
Q: But it’s too early to say it will stop at the auto industry?
A: We have to be pragmatic. We have to handle each problem according to the reality we’re in. In the auto sector I think everybody who’s looked at this seriously knows we’ve done the only thing we can do here.
Q: Do you think it’s fair to say that the big-spending liberals of Canada and North America are taking advantage of the political situation to drive through more of their ideological agenda?
A: Well, look, this is a risk. First of all there’s nothing—I should be clear—there’s nothing unconservative about running deficits during a recession. There’s actually pretty strong economic theory that would indicate that you don’t start raising taxes and reducing government economic activity during a downturn, but what we’ve got to be sure of as we enter a deficit [is] that those spending measures are short-term and that we’re in a position where, as the economy recovers, we move back into surplus. And obviously the risk the government faces is that this becomes an excuse for permanent long-term spending that is, in fact, not stimulative, it’s just simply big government that becomes a burden on the economy. That is a significant risk, which is why I think it’s important to have a Conservative government managing this kind of program.
