Canada 'piggybacking' on U.S. stimulus: think tank

The Canadian government is depending too much on U.S. economic stimulus measures to tackle the recession, a left-leaning think-tank says in a new report released Tuesday.

The Canadian government is depending too much on U.S. economic stimulus measures to tackle the recession, a left-leaning policy think-tank says in a new report released Tuesday ahead of U.S. President Barack Obama's visit to Ottawa.  

The report by the Canadian Centre for Policy Alternatives says the Stephen Harper government's $40-billion stimulus package over two years is only one quarter the size proportionally of the U.S. package and half the amount advocated by the International Monetary Fund. 

Bruce Campbell, the group's executive director, said Canada's perceived lack of commitment could lead to serious tension with its southern neighbours ahead of Obama's visit Thursday.

Campbell told reporters at a news conference in Ottawa on Tuesday that if he were Obama, he'd be concerned Canada was "piggybacking" on the American recovery plan.

"Canada hasn’t been nearly as proactive and it could become a political sore point with the Obama administration," he said.

Campbell said the prime minister should re-examine how his government can better "pull its weight" by improving its own fiscal stimulus package, as well as ensure through a "Buy Canadian" policy that tax dollars spent on infrastructure projects go to Canadian workers.

"Rather than talking about the virtues of free trade with the American president, the Conservative government should be implementing its own 'Buy Canada' policy in order to create jobs here in Canada," he said.

The federal NDP and at least two major unions, the Canadian Auto Workers and the United Steelworkers, have called for a "Buy Canadian" policy in the wake of a "Buy American" provision added to the multibillion-dollar bailout program south of the border.

The provision requires public works projects receiving money from the federal stimulus package to use U.S.-made iron, steel and manufactured goods.

After fierce pressure from Canada, the European Union and several prominent U.S. corporations, lawmakers in Washington added a caveat to the provision to clarify "Buy American" must not violate international trade agreements.