What has been done

The credit crunch that ushered in the current global recession began in 2007 when the real-estate bubble that had been building in the United States finally burst.

While not even the top private sector economic forecasters foresaw the speed and severity of the eventual global downturn, those first rumblings in the U.S. economy did provide a warning to prudent leaders and policymakers that it was time for early action.

In 2007, Prime Minister Stephen Harper began warning Canadians of the coming challenges in the global economy.

The Prime Minister did more than just warn Canadians.  He also acted to ensure that Canada remained ahead of the curve and well positioned to deal with the economic challenges ahead.

Early Tax Cuts for Canadians

On October 30, 2007, the Harper Government introduced $65 billion in permanent tax reductions, specifically designed to bolster Canada's economy for uncertain times.

These tax reductions took effect just at the moment they were most needed, when the U.S. entered recession in early 2008.

In total, since coming to office, the Harper government has delivered or is delivering $220 billion in tax relief for Canadian individuals, families and businesses.

This includes the Harper Government's decision to cut the GST from 7% to 5%.

Cutting the GST helps sustain consumer spending and pumps billions of dollars into Canada's economy.  In fact the GST cut will allow Canadians to hold on to more than $75 billion worth of their own money between 2008-2009 and 2013-2014.

This groundbreaking economic stimulus approach has since been imitated elsewhere, including in the United Kingdom which cut its own national sales tax (the VAT) in order to stimulate its economy.

The Harper Government also strengthened Canada's business conditions by implementing long-term corporate tax reductions that will leave Canada with the lowest corporate-tax rate among G7 industrialized countries.

Prudently Paying Down Debt

The Harper Government also paid down billions in debt while the economy was strong.

Since 2005-2006 the Harper Government has reduced the federal debt by $37 billion.

By reducing the federal debt, the Government created additional flexibility to respond to the recession with job-creating investments by deliberately running a short-term deficit.

Today, Canada's debt-to-GDP ratio remains the lowest among all G7 nations.

Strengthening Canada's Financial System.

The Harper Government also acted early to strengthen Canada's financial system in advance of the global economic shock.

To strengthen Canada's regulatory environment, the Government moved forward on establishing common securities regulation across provinces.

The Harper Government also acted to fortify Canada's real-estate sector against a U.S.-style shock by lowering the maximum term of a mortgage from 40 to 35 years and requiring a minimum down payment of 5% for government-backed mortgages.

Working closely with the Bank of Canada, the Government also acted to improve access to financing for Canadian consumers, households and businesses.  This included supporting a new agreement to restructure non-bank asset-backed commercial paper.  It also included the decision to set aside up to $125 billion for the purchase of insured mortgages. The government is committed to maintaining the availability of the Insured Mortgage Purchase Program (IMPP) until the end of March 2010.