[mr.x]

Flaherty to establish economic advisory council

Updated Thu. Dec. 18 2008 9:14 PM ET

CTV.ca News Staff

Federal Finance Minister Jim Flaherty will establish an 11-member economic advisory council to consult with as he draws up his budget, which he is scheduled to table when Parliament resumes in late January, he announced Thursday.

The council, which will consist of 11 members leading Canadian economic experts, will also provide Flaherty with advice on dealing with the ongoing economic crisis.

Council members include:

* former B.C. finance minister Carole Taylor
* billionaire businessmen James D. Irving and James A. Pattison; and
* University of Calgary professor Jack Mintz, who is the former president and CEO of the C.D. Howe Institute

"I called them all personally and I said, 'Your advice is needed for your country,"' Flaherty told a news conference Thursday in Saskatoon.

Flaherty pointed to "the continuing deterioration in the world economy, the U.S. economy, affecting our economy and the deterioration in the commodity prices," as reasons for establishing the council.

"I determined that we would have the council, and then I went about the business of calling them personally and as of today I'm able to say that we're organized and ready to go," Flaherty said.

Council members, who will work for one dollar a year, will meet for the first time on Tuesday in Toronto.

Town hall-style meetings across Canada are scheduled for the New Year.

Flaherty will not be bound by any recommendations he receives from the council.

Reaction

Liberal finance critic Scott Brison welcomed the advisory council, saying it's made up "impressive Canadians" with a deep understanding of the economy. But he said he's concerned the prime minister won't accept the council's advice.

"If we have a prime minister in Stephen Harper who doesn't even listen or take advice from his own cabinet ministers, how can he take advice from these eminent Canadians?" Brison said Thursday on CTV Newsnet's Mike Duffy Live.

The opposition Liberals will have to decide whether to support the minority Tory government's Jan. 27 budget, or defeat them and try to form a coalition government with the NDP - a coalition that would be supported by the Bloc Quebecois.

New Democrat MP Judy Wasylycia-Leis said the council is made up of formidable names, but she questioned its balance, saying there is a lack of "progressive" economists who've spoken out on the economic crisis such as Canadian Auto Workers union economist Jim Stanford or the University of Manitoba's John Loxley.

Meanwhile, Royal Bank of Canada chief economist Craig Wright said nobody has the absolute answer given the "unprecedented uncertainty" of the economy. "So I think at a minimum, people discussing and coming at it from different viewpoints should be viewed as a step forward," Wright told the Canadian Press.

Flaherty said politics did not play a role in selecting the council's roster. "I did not look through party ties when I went through the list," he said.

Flaherty also said he and Bank of Canada Governor Mark Carney will meet with the CEOs of the country's biggest banks in January to ensure they are taking steps to make more credit available to average Canadians.

"I expect (the banks) to make it evident to us that they are taking steps to make that more available in Canada," he said.
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[Canadian Mind]

Judging by the people who he is pulling in, I get the feeling that the rich buisnessmen are ging to get more out of this on a per capita basis than the ordinary people... but I find that comforting, as what is good for their pocketbooks probably means good for the average worker.

[WarrenC12]

I heard they are all being paid $1 per year too. Hopefully they have some decent ideas. But this seems like a PR stunt. The federal government is normally advised by a bunch of private sector people anyway right? As far as I understood it was usually economists from the big 5 banks. We'll see if these people tell them anything different.

I listened to Michael Ignatieff on CKNW yesterday morning. He was a great interview, said all the right things, spoke intelligently about what the government can and should do to help the country, and what they shouldn't do. He gave me alot of confidence, hopefully he can keep Harper honest and they present a good budget that will pass the house in January.

[nickinacan]

I heard they are all being paid $1 per year too. Hopefully they have some decent ideas. But this seems like a PR stunt. The federal government is normally advised by a bunch of private sector people anyway right? As far as I understood it was usually economists from the big 5 banks. We'll see if these people tell them anything different.

Actually, I think it's a great idea... if the Conservatives will actually listen and take advice. Yes they normally do get advice from the chief economists at the big 5, but i think their views are much too narrow in comparison to this council.

I listened to Michael Ignatieff on CKNW yesterday morning. He was a great interview, said all the right things, spoke intelligently about what the government can and should do to help the country, and what they shouldn't do. He gave me alot of confidence, hopefully he can keep Harper honest and they present a good budget that will pass the house in January.

Ignatieff is a very personable, quick witted and overall intelligent guy. He is much more suited to be the Liberal leader than Dion, who most people just couldn't connect to. Sadly, it feels like in Canada we vote for our Prime Minister rather than our Member of Parliament. Given the Liberals can come up with a decent platform with Ignatieff at the helm, the historic Liberal re-centering will be complete and the Conservatives will have to fight harder to keep their current status in the house.

[ravman]

Flaherty seeks advice from billionaires
By Crawford Kilian December 19, 2008 05:54 pm

Four billionaires out of eleven advisers? That’s the proportion in Finance Minister Jim Flaherty’s new Economic Advisory Council. Maybe it’s because they’ve got the most to lose in a depression. Or they’re the only ones who can afford to work for a dollar a year.

At The Progressive Economics Forum, Marc Lee has some reservations:

The Economic Advisory Council is not exactly a representative group. No labour representation, no Aboriginal reps, no one from the social or non-profit sector whatsoever. Thus, the groups most likely to be affected by the recession have no voice on this panel.

In fact it is hard to imagine a less representative group. While it is nice that they are working for $1, it is not like any of them need the cash. Out of eleven panelists, we have four (!) multi-billionaires.

There is James Irving, who along with brother John, sits at number two on Canadian Business’ 2008 Rich 100 list with a combined net worth of over $7 billion. Add in Jimmy Pattison, number five on that list with net worth of just under $5 billion. And Paul Demarais is number eight, with net worth of more than $4 billion. Don’t forget Mike Lazardis of Research in Motion fame, who sits at number fourteen with net worth of $2.6 billion

[mr.x]

Well, they should also realize that the billionaires are responsible for tens or even hundreds of thousands of jobs each. I don't think it's ridiculous.

[jlousa]

So they are upset that people that know the economy the best are put in charge of it? :shrug:
I'd be alot more worried if they had put kitchen table manufacuters and Buzz Hargrove on that panel.

[twoNeurons]

Well, they should also realize that the billionaires are responsible for tens or even hundreds of thousands of jobs each. I don't think it's ridiculous.

Uhm... their actions may effect thousands of jobs, but they are not responsible for each and every one of those jobs.

It takes many people to run these companies. The heads of these companies are not solely responsible for the success of them.

A company can only function well if everyone realizes that they are needed for it to work well. From the bottom to the top.

[quobobo]

So they are upset that people that know the economy the best are put in charge of it? :shrug:

Have you even taken a look at the names on this council? There's a grand total of one academic economist. I can understand a few industry people for their unique perspective, but 9 industry, 1 academic, and one public policy person is not exactly balanced - nor is it a ratio any sane person would trust for relatively unbiased policy decisions.

(but hey, it's not really a surprise coming from Flaherty)

[jlousa]

I'm going to get some flack for this but that's fine. The people that know the economy the best are those that have been able to make money in it. Academics tend to be just that, academic, most of them would be unsuccessful in the real world and work best in theories not reality. I don't have any issue with this council.

[quobobo]

I doubt I'll be able to change your mind about the ivory tower criticism, although I really disagree.

However, what about potential conflict of interest? Industry is inherently greedy, and while usually that leads to a good outcome it also means that industry will often support some really terrible policies. Unjustified subsidies (http://en.wikipedia.org/wiki/Bombardier), trade restrictions to reduce competition, barriers to competitive entry in certain markets (http://en.wikipedia.org/wiki/Category:Telecommunications_companies_of_Canada), bailouts...

[jlousa]

There is the possiblity of conflict of interest, but at the end of the day these people rely on the economy being healthy. If the economy is healthy and vibrant they have much more to gain then by trying to pull a fast one. There is also an additional failsafe in that their recommendations are not binding. Hence if the government doesn't agree with it they don't have to follow the advice.