Canada’s chief envoy to the United States said Thursday that his government supports a global oversight mechanism to identify problems in individual countries’ banking systems before they infect the broader financial system.
Ambassador Michael Wilson said Ottawa hopes to begin outlining such a mechanism at next week’s summit in London of the Group of 20 major economies. “We’ve always been supportive of the individual countries’ regulatory programs,” Mr. Wilson told editors and reporters at The Washington Times. “But at the same time, there should be a systemic overview within that country, and then a broad oversight and comparing of data and information at the international level … so that we can identify where there are systemic problems that are creeping outside the borders of individual countries and causing problems in a broader sense.”
Although he did not elaborate on proposals being discussed by G-20 finance ministers, Mr. Wilson said he hoped that “the outcome on regulation is going to be acceptable” to all participants in the London meeting, which President Obama is set to attend.
Canada has not been hit by the economic crisis as hard as the United States, though it has been in a recession since late last year, he said.
Canadian housing policies, including the requirement of larger down payments and the inability to deduct mortgage interest on tax returns, helped prevent a housing bubble from developing there, he said - in contrast to the $1.2 trillion in subprime mortgages issued in the United States.
He added that Canada’s regulations prevented its banks from taking excessive risks by overleveraging their capital base, which occurred in the United States and some European countries.
Nevertheless, with 40 percent of its economy based on trade, Canada was still unable to isolate itself from the global crisis, Mr. Wilson said.
Much of Canada’s trade involves energy exports to the United States. Canada is the biggest foreign supplier of oil, natural gas, electricity and uranium to the United States, he said.
On the renewable-energy front, while some in Congress are pushing solar, wind and biomass, Canada is seeking “a level playing field” for its 25 megawatts of hydroelectric potential. “This is excellent energy for you. It is renewable, clean and it has a benign environmental impact,” he said.
Mr. Wilson, a longtime conservative politician and former finance minister who has been in his current post since 2006, rejected accusations leveled at him in Canada that he cannot be an effective ambassador with a Democratic administration in Washington because of his prior close ties to the George W. Bush administration.
“Most of these issues we deal with are of a nonpartisan nature,” he said.
He also criticized the Bush administration’s policies along the U.S.-Canada border, particularly an “agricultural fee” the U.S. government collects from people and goods coming in from Canada. He dismissed Washington’s food-safety argument, saying the two countries’ systems in that field are “equivalent.”
“We feel that we suffer from our proximity [to the U.S.] in that we pay a fee on every truckload of cars, as opposed to the shipload that comes in through Seattle,” he said. “If a shipload of cars comes in from Japan or [South] Korea, they don’t have to pay that fee.”
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