Financial Update

Harper eyes stimulus worth $30-billion “We're going to do whatever it takes to get our economy through this recession and on to a long-term recovery”

But even as he put a price tag on the planned aid, Mr. Harper said he's prepared to go further if necessary. “It will be scalable. We will be able to move it up if we need to move it up,” he said.

· TSX -298.76pts(Reuters) led by a drop in energy and gold stocks as the price of oil continued to drop despite a massive production cut by OPEC and economic worries sent bank stocks lower.
· DOW -219.35pts paced by slumping energy-related shares, after the price of crude fell to 4 year lows and 2 of the nation's Big Three automakers said they would halt production
· Dollar -.93c to $82.93US.
· Oil -$3.54 to $40.06US per barrel. oil prices fell despite a cut in production by OPEC
· Gold -$7.90 to $860.60US per ounce
www.bankofcanada.ca/en/rates/bond-look.html Canadian bond prices

Flaherty picks team to help shape budget

RICHARD BLACKWELL From Friday's Globe and Mail

Finance Minister Jim Flaherty has reached out beyond his usual coterie of advisers to get help in crafting the crucial January budget that will spell out how Ottawa plans to get the economy back on track.

On Thursday, he announced a special 11-member advisory committee that will consult with him and suggest measures to be included in the budget. But the Economic Advisory Council will live beyond the budget and continue to provide advice in the future.

The group is devoid of bank economists or central bankers. In that sense it contrasts with U.S. president-elect Barack Obama's Economic Recovery Advisory Board, which is headed by a former chairman of the Federal Reserve Board and includes economists in addition to business leaders, labour officials and academics.

Mr. Flaherty's panel is also non-partisan. It will be chaired by Carole Taylor, the former minister of finance in British Columbia's Liberal government. And Power Corp. of Canada chairman Paul Desmarais Jr., a long-time Liberal supporter, will also be at the table.

Business luminaries on the committee include Vancouver entrepreneur Jimmy Pattison, James D. Irving, president of the forest products arm of the Irving family empire, Research In Motion Ltd. president Mike Lazaridis, and Geoff Beattie, president of the Thomson family holding company Woodbridge Co. Ltd.

Mr. Flaherty told reporters in Saskatoon Thursday he talked individually to each member and asked them to participate. “I called them all personally and said: ‘Your advice is needed for your country,' and all of them said: ‘Yes.'”

The group will meet for the first time in Toronto on Tuesday, then reconvene after Christmas.
Ms. Taylor said in an interview Thursday that Mr. Flaherty is attempting to “reach out” and gather views on what action to take. The new council's mandate “is to put together some sort of structure around private sector advice, ideas and opinions,” she said.

It's important to get broad input from experienced business people who are “on the ground,” she said, “because there is no solution we can pull off the shelf here that will deal with this.”

Ms. Taylor, who was dropped from the B.C. cabinet last summer after she announced she would not run again for the provincial legislature, said she is very happy to be back in a key role on a crucial public policy issue. “This is such an important moment in history that I was anxious to participate in some way.”

Another member of the committee is University of Calgary professor Jack Mintz, who has advised the government on tax issues in the past.

Mr. Mintz said it is too early to say how the committee will be organized, or in what form it will provide advice to the government. The group might want to warn Ottawa off some possible measures that could cause more harm than good, he said, in addition to recommending others.
In a recent commentary in The Globe and Mail, Mr. Mintz cautioned against bailing out weak companies. Retraining displaced workers is more effective than “keeping inefficient businesses operating,” he wrote.

Infrastructure spending can help, he added, but only if it is in support of projects that are ready to proceed. And a cut in income taxes is preferable to trimming the GST, he wrote.

Another committee member, Ajit Someshwar, who owns a number of small companies including information technology advisory firm CSI Consulting Inc., said it is a wise move to consult people with different skills when “we are sailing in uncharted waters.”

Mr. Pattison, who will bring another West Coast perspective to the committee along with Ms. Taylor, would not say what he will recommend to Mr. Flaherty. But he noted that “the U.S. is definitely worse off than we are,” and that, at the moment, “things are pretty good out here in B.C.”