Annual lists 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995

Dubai, United Arab Emirates
September 22, 2003

Speech by the Honourable John Manley, Deputy Prime Minister and Minister of Finance of Canada, to the Canadian Business Council, Dubai, United Arab Emirates

Check against delivery

Friends, honoured guests. Al salaam a' Laykum. It is a great pleasure to be here today, and I am extremely grateful for the generous welcome we have received here this week.

Dubai is a remarkable city, not only for its architecture and modernity, but for its transformation. In the short space of 40 years, Dubai has grown into a major centre of international commerce, a hub of finance and transportation. Your city is a shining example of a nation’s natural resources being used for the benefit of all, and of how the right policies that promote investment and growth can have an impact that is real and sustainable. Dubai is a success story, and I congratulate the people of this city for that success.

I welcome this visit as a wonderful opportunity to become better acquainted not only with the corporate community that flies the Canadian flag in the United Arab Emirates (UAE) but with, as well, the local business community with whom they work.

There is a prosperous and growing relationship between our two countries. In 2002 our trade in goods alone exceeded $340 million. Canadian exports to the UAE reached more than $100 million in just the first quarter of this year, and imports to Canada from the United Arab Emirates continue to increase.

It is the vibrancy of this relationship that helps make the UAE Canada’s fourth largest trading partner in the Middle East and North Africa. But as prosperous as our connections are, I would like also to salute their humanity. The contacts, the links and friendships you have created and nurtured are the foundation on which nations build relationships.

I think it is a too-often-forgotten fact that international relations begin and end not with governments but with people. Every transaction, every enterprise between our two nations brings us closer because they are the products of people—individuals working together, bringing their energy, their imagination and their intelligence to bear in the world of commerce. That these qualities are operating in environments of dramatic cultural differences only makes it, for me, all the more exciting and I, again, thank you for welcoming me here today to sample this environment and this energy first-hand.

Today I would like to take this opportunity to share with you news of—to continue the theme—another kind of energy. Not fossil fuel or hydroelectric energy, but rather the energy that has been produced by the Canadian economy over the last several years.

I am happy to report that the Canadian economic success story has been making headlines recently. In fact, not so long ago, the Paris newspaper Le Figaro remarked on the success of the Canadian economy, coining the term "the Canadian recipe."

But in spite of this good press, Canada remains for many a very well-kept secret. And for all the positive headlines we have seen, I suspect those are not the headlines most of you will remember—not after a summer of news that has included banner headlines featuring "SARS," "BSE" and "forest fires."

It is true that the last few months have not been the easiest. Some key Canadian economic sectors have been dealt serious blows. The beef industry, pulp and paper, tourism—all have felt the strain of unforeseen and dramatic events. But the qualities of a nation often shine best when challenge casts its longest shadow. And shine is what Canada has done.

The SARS outbreak took a serious toll on families and individuals around the world. In Canada no city was more affected by SARS than our largest, Toronto. The battle to control the disease presented clear challenges for the city and the country as a whole. But it was a challenge met—by Torontonians, by Canadians everywhere.

Unlike SARS, the appearance of BSE—or "mad cow disease"—was limited to just one isolated occurrence, one single cow in northern Alberta. But, like SARS, its effects were widespread. Before the partial lifting of a ban on exports of Canadian beef to the United States and Mexico, our beef industry had sustained millions of dollars in losses, losses that rippled throughout our economy.

But again, Canadians responded. From the cattle ranchers to feed lot managers to consumers, Canadians rallied. Today, steps have been taken to ensure Canadian beef remains of the highest, most reliable quality, and I am confident this industry will not only recover, but come back stronger than ever.

And, as we speak, Canadians in central British Columbia are still counting the costs of forest fires that have ravaged their region, their economy, and in many cases destroyed their very homes. Again, Canadians have pulled together. Governments, communities and families are working to heal their region and start building again.

2003 has presented more than its share of adversity, but Canadians have done more than confront it; they have overcome it. And, with time, I believe we will be stronger for it.

Naturally, these events have had a short-run economic impact. Indeed, in the second quarter of this year our economy experienced a minor contraction of three-tenths of a percentage point. This contraction is our first since the tumultuous autumn of 2001. Before that Canada had not experienced a quarter of negative growth in almost a decade, in early 1992.

But already a more robust U.S. recovery appears to be well underway and optimism is returning. I am not alone in this confidence. Most private sector economists agree our second quarter was a "blip." A rebound is already underway.

On what do we base this faith? We base it on the hard work and energy of Canadians, who have built an economy that is entrepreneurial, resilient and among the best performers in the industrialized world, a performance built on four fiscal and economic pillars.

The first is sound fiscal management. The facts speak for themselves: over the past 10 years we have eliminated the deficit, posted consecutive balanced budgets and, through our debt reduction efforts, placed our national debt on a permanent and sustainable downward track.

The second pillar is low and stable inflation. Keeping inflation within the target range of 1 to 3 per cent has enabled consumers and businesses to make decisions about their finances based on a stable and predictable low inflation environment.

Third, Canada has nurtured an economic and social environment that fosters growth and innovation. This has included a number of structural reforms. In 2000 we introduced a five-year $100-billion tax reduction plan that continues to reduce personal income taxes for millions of Canadians. We have reduced corporate income taxes and capital taxes to build a distinct Canadian business tax advantage relative to the U.S. Since balancing the books, we have invested more than $13 billion in innovation and skills development, areas crucial to Canada’s future prosperity. We have strengthened our publicly funded national health care system with an investment of $34.8 billion over the next five years. And we have improved opportunities for children in low-income families by investing substantially in a new $10-billion-per-year National Child Benefit and related support for children with disabilities.

Finally, there is the fourth pillar, that of freer and fairer trade. There is very little I can tell the people of Dubai about the value of trade. Trade was the engine of this region’s economy centuries before Canada was born. But, late as we are to the game, we have learned its value. Today Canada is actively pursuing trade liberalization through the World Trade Organization and is working hard to broaden our trade links around the world.

These four pillars are the foundation of our economic and fiscal policies, and they have helped produce a track record that has led the way in the Group of Seven (G-7). Consider the facts.

Canada’s gross domestic product (GDP) grew by 3.3 per cent in 2002, which meant that we outperformed all of our G-7 counterparts last year. In fact, we have led the G-7 in real economic growth, on average, since this government first balanced the national budget in 1997–98.

Since the beginning of last year the Canadian economy has created 612,000 new jobs, two-thirds of them full-time.

We have also enjoyed a current account surplus for the past 16 consecutive quarters, and our net foreign indebtedness has declined from 45 per cent of GDP 10 years ago to 16 per cent today—its lowest level in 50 years.

And, finally, since 1997 Canada has become a leader in productivity growth and surpassed all G-7 countries in employment growth. As a result, the standard of living of Canadians, as measured by real GDP per capita, rose 20 per cent over the last six years, the fastest in the G-7.

These are impressive Canadian achievements.

That being said, we all continue to face a challenging economic environment—challenges that are global in nature but with local impact, underscoring the global interdependence of nations. Now more than ever, economic and social problems that affect one country can have a major impact on virtually all nations around the world.

The key to coping successfully with global shocks is an economy built on sound fundamentals. As I have just described, Canada has taken this lesson to heart, and it has made us a leader among G-7 nations. The hard work and commitment of Canadians, coupled with our sound economic and fiscal management, have been paying off. I am confident that they will continue to do so in the future.

Earlier I mentioned a number of reasons that I am so pleased to be here today. There is another, and it has to do with the interdependence between nations of which I just spoke. I am happy to be here because I believe it is right to be here.

It is fitting that we have come to this city and to this region to hold the annual meetings of the International Monetary Fund (IMF) and World Bank, as well as the fall meetings of the G-7 finance ministers. Dubai shows us what a city can do if it chooses to be engaged in the world, to invite its investment, to trade in its goods and services. By creating such growth, Dubai helps not only itself but the entire region. Therefore, Dubai’s success is not Dubai’s alone. Its fruits are shared by all of us.

We live in one world—many regions perhaps, but only one world. What happens here, in this region, matters to me, where I live in mine. Decisions made here affect me, just as plans made in another hemisphere have consequences that matter in this one.

That is why it is fitting that the G-7 should meet here, that the IMF and World Bank should convene here. All three are bodies that have effects felt around the world and are, themselves, affected by it.

And that is why I am so pleased to be here. Because we matter to one another. Our two nations, our two peoples, the commercial relationships and the friendships I see in this room today—they matter and they are deserving of our respect and our support.

Now, as I close, let me entertain you once more with my Arabic. "Shoo kran." That, I hope, was "thank you." And in case it wasn’t, let me try it two more ways. Thank you very much. Merci beaucoup.