Stimulus gamble How Ottawa saved the economy – and wasted billions

8/13/2019 Stimulus gamble How Ottawa saved the economy and wasted billions

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Stimulus gamble: How Ottawa saved the

economy and wasted billions

BILL CURRYANDBARRIE MCKENNA-Saturday, Feb. 08

2014

Jim Flaherty had heard enough. It was December, 2008, and the minister was on the

road, working his way through a heavy schedule o meetings with business

e!ecutives, local and "rovincial "oliticians, and other grou"s.

#verything was riding on a budget he was scheduled to deliver in less than si!

weeks. $he minority %onservative government had barely survived the autumn& it

"rorogued 'arliament to avoid deeat in the (ouse o %ommons. )eanwhile, the

global inancial crisis had been gathering s"eed or months. *ith each "assing

week, the economic outlook got worse.

For the Finance )inister, two days in +askatoon drove the message home. n Dec.

, "rovincial and territorial inance ministers lew in with grim re"orts rom across

the country. $he ne!t day, at the city/s Delta essborough hotel, )r. Flaherty met

with business leaders or several hours. 1ll had a similar message $heir businesses
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were eeling the "ain o a bad economy.

1 light went on in my head at about 2 o/clock in the aternoon $his is worse than I

thought,3 )r. Flaherty recalls. *hen the second day o meetings wra""ed u", he

"laced a call to 'rime )inister +te"hen (ar"er.

4ou know, we ho"ed we could run a deicit o iteen or twenty billion dollars and

manage the "roblem at that level. ut I don/t think so,/ 3 )r. Flaherty says he told

the 'rime )inister. 5 6It/s dee"er and darker and it/s at all levels o business./ 3

$hat/s how )r. Flaherty, a conservative who/d risen to "olitical "rominence in

ntario as a member o the cost-cutting )ike (arris government, ended u"

delivering one o the largest deicits in modern %anadian history. $he red ink or the

iscal year 2007-0 was nearly 9:-billion. *hen ad;usted or inlation, it was on "ar

with the ederal deicits o the early 770s, when %anada was considered a inancial

basket case.

1nd I/m glad we did,3 )r. Flaherty says.

Five years later, the "roducts o %anada/s massive stimulus "rogram are still visible.

%ities and towns across the country have new roads and u"dated hockey rinks.

)any homeowners en;oy inished basements and new decks because o a

tem"orary home renovation ta! credit. +ome o %anada/s native reserves now have


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new schools, meaning students no longer have to s"end hours o their day riding a

bus to a neighbouring town.

1nother lingering "art o the stimulus is debt.

*hen )r. Flaherty/s 2007 budget announced a ederal stimulus "ackage worth uebec closely to see whether their

debt can be managed. ntario ? where manuacturing took a heavy hit during the

recession ? saw its credit rating downgraded in 202. In ttawa, the government is

"utting its unions on notice that hard bargaining lies ahead in 20< over sensitive

issues like sick leave. 1 rare strike by ederal "ublic servants could be on the


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hori@on.

$he Auestion, now that the dust has settled ive years later, is was it all worth itB

$he "olitical backdro"

%onservatives now reali@e that +e"t. , 2008, was a terrible time to trigger a ederal

election. )odern cam"aigns are heavily-scri"ted, micromanaged aairs designed to

avoid im"rovisation at all cost. $he economy did not co-o"erate.

y week two o the cam"aign, *all +treet was in crisis. Cehman rothers (oldings

Inc. iled or bankru"tcy on +e"t. 9. $he ne!t day, *ashington ste""ed in to bail out

1merican International rou", the largest insurer in the world.

$he 1merican inancial system a""eared to be coming unglued. $he Dow Jones

industrial average recorded its biggest-ever one-day "oint dro" on +e"t. 27, with ;ust

over two weeks to go beore the ct. < %anadian election.

$he "re"ared cam"aign lines were Auickly tossed aside by Ciberal Ceader +tE"hane

Dion and D' Ceader Jack Cayton as they ;um"ed on the headlines, demanding a

government res"onse to the crisis. ut they insisted ? as did the %onservatives ?

that deicit s"ending was not reAuired. )r. (ar"er accused the other "arties o being

overly "essimistic about the state o the economy.

*hat the o""osition is demanding I do ? raise ta!es, increase s"ending, do a lot o


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direct intervention and bailouts ? these things would demonstrably ruin our iscal

credentials and undermine the strengths that we do have in our economy,3 he told

the %% on ct. , one week beore election day.

%onservative sources say it was clear the economy was worsening but the "arty did

not want to change its message in the middle o an election.

Days ater the election in which the $ories won


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u"date, released on ov. 2, 2008. $he document contained no stimulus "lans, and

argued that ttawa had already given the economy a boost by cutting the goods and

services ta! to 9 "er cent that year. It hinted o more s"ending in the 2007 budget,

but "resented a long-term orecast that showed no deicit. n to" o that, the u"date

contained a ma;or sur"rise $he %onservatives would be eliminating the 28-million

subsidy to "olitical "arties.

$he %onservatives backtracked two days later, but it was too late. $he Ciberals, D'

and loc >uEbEcois were dee" into negotiations over how to deeat the government.

In retros"ect, many economists say the ovember u"date would have been a better

time to launch a stimulus "ackage. ut at the time, those on whom )r. Flaherty

relied on or advice say the data were not clear enough to make strong

recommendations.

ank o ova +cotia/s chie economist *arren Jestin, who "rovided data and advice

to )r. Flaherty in the all o 2008, said his 5intuition3 at the time was that things

were getting much worse, but the economic numbers still weren/t that bad.

$he sad thing about being an economist is you/re dealing with lag data,3 he said.

)r. Flaherty had the same sense o unease. 5one o the economists in the "rivate

sector gave us advice that we/re into a recession,3 )r. Flaherty said. Inside the


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government, the thinking was that some modest stimulus s"ending in the 2007

budget would be enough.

I can look back now and say we were in recession the last Auarter o 2008,3 )r,

Flaherty said. 5+o it was a bit awkward to "resent what I "resented and then to

reali@e that things were getting increasingly worse.3

Jean %harest, >uebec/s "remier rom 200G to 202, said the (ar"er government did

not want to believe that %anada was being dragged into the global inancial crisis

and recession.

$he s"eed at which they turned 80 degrees was s"ectacular,3 )r. %harest said. 5I

don/t think anyone held it against them because we had ;ust seen the world

unravelling in ront o us. $here weren/t many o"tions. $hey did what they had to do,

Auite rankly.3

$he bailout

n )onday, ov. G, 2008, Dwight Duncan, then ntario/s Finance )inister, was

lying back rom an emergency meeting with %hrysler rou" CC% chie e!ecutive

oicer =obert ardelli and other to" oicials in 1uburn (ills, )ich.

$he ultimatum he had received rom the auto maker was blunt and alarming.

%hrysler was out o cash and wouldn/t be able to "ay its workers in December.


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*ithout hel" rom the .+. government, the com"any was dead. *ithout money rom

governments in %anada, %hrysler would "ull out o the country.

$wo vehicle assembly "lants in *indsor and ram"ton, nt., along with a "owertrain

"lant, would close or be moved to the nited +tates. early 0,000 actory and head

oice ;obs would be gone.

)r. Duncan stared out the air"lane window at the lights o +outhern ntario below.

$he orth 1merican auto industry was on the verge o colla"se and the global

inancial system was ailing. (e wondered what other "roblems might be lurking out

there.

I remember looking at those homes and thinking, 6$hose "eo"le have no idea

what/s coming,/ 3 )r. Duncan said, whose hometown o *indsor would bear the

brunt o the de"ression in auto sales. 5$his would have reverberated u" and down

the


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+o ar, :.2-billion has been re"aid, and the government still owns


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)r. +tanord said. 5$he bailout did not solve everything. ... It gave us some

breathing room or a ew years.3

Inrastructure versus ta! cuts

1mid the high-stakes "olitics o a minority government at a time o severe economic

distress, )r. Flaherty had an e!tremely tight window to "ut together a budget that

would allow the %onservatives to stay in "ower. $he o""osition "arties were

demanding stimulus and %anada had "romised the 20 it would do its "art. $he

discussion then turned to the si@e o the s"ending "ackage and what it would

include.

%onservative sources say some cabinet cabinet ministers still thought the stimulus

could be ke"t relatively small. +ome believed the s"ending o the "reviously

announced seven-year uilding %anada 'lan targeted at inrastructure could sim"ly

be moved u". ut the economic news worsened throughout December. +tatistics

%anada revealed the country shed ,000 ;obs in ovember, marking the biggest

monthly dro" since the 782 recession. $he comment "ages were illing u" with

e!"ert o"inions second-guessing ttawa/s wait-and-see a""roach.

For the Finance )inister, the reali@ation sunk in that the government would need to

run a very large deicit.


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It was basically go big or stay home. $here was no "oint in doing a hal-measure,3

)r. Flaherty said. 5$he uncertainty was enormous. *ith the 1mericans, with the

#uro"eans, I was talking to my colleagues all the time every day around the world

and nobody had a good read on what was going on. +o that was "articularly

rightening.3

Inrastructure s"ending had obvious a""eal, but many economists warned that these

ty"es o "ro;ects tend to be too slow to do much good. y the time money is s"ent,

the recession is usually over.

rock %arleton, the %# o the Federation o %anadian )unici"alities, continued to

"ush or a ma;or inrastructure "lan. (e had made his case directly to )r. (ar"er on

ov. 20 in the 'rime )inister/s %entre lock ice during a meeting that was

attended by )r. Flaherty and John aird, the minister in charge o trans"ortation and

inrastructure.

In the end, the combined ederal and "rovincial stimulus totalled nearly :


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bailout. nem"loyment beneits and ta! cuts largely accounted or the rest.

etting the money out the door

1ter the budget was tabled and the government avoided deeat, the "olitical

"ressure moved rom )r. Flaherty to )r. aird. Inrastructure s"ending would be

eective only i the money was s"ent Auickly. 1t the same time, no government

wants scandals rom money s"ent hastily ? and badly.

$o s"eed u" "ro;ects, )r. aird "ushed or a one-"age a""lication orm and

demanded that munici"alities submit only "ro;ects that could be com"leted by )arch

G, 20. Cong-standing rules were being sidelined, creating some concern and

resistance in the "ublic service, and ears about "olitical embarrassment. 5*e ;ust

didn/t want to be lam"ooned,3 )r. aird said in an interview in his 'arliament (ill

oice.

In the weeks ater the budget, ministers were rustrated at the slow "ace o action.

$hat tension between the "ublic service and cabinet built until June, when )r.

aird/s de"uty minister, $rans"ort %anada veteran Couis =anger, was re"laced by

4a"rak altacioglu. $he government ho"ed she would get things moving.

$here was a huge dynamic change when 4a"rak came in in terms o co-o"eration,3

said %hris Froggatt, who was )r. aird/s chie o sta at the time.


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In the end, the 1uditor-eneral tabled two re"orts on the %onservative government/s

#conomic 1ction 'lan ? as the stimulus was called ? and both were "ositive. 1 third

re"ort s"eciically on a 90-million 8 Cegacy Inrastructure Fund, which was "art o

the stimulus "lan, critici@ed the government because auditors could not ind

documents showing how "ro;ects were selected. 1uditors also discovered that 8

s"ending was "resented to 'arliament as border-related, when in act it had nothing

to do with border inrastructure.

$he act that the largesse was concentrated in the 'arry +ound-)uskoka riding o

then-Industry )inister $ony %lement ins"ired much o the criticism rom the

o""osition that )r. aird was ho"ing to avoid.

$he o""osition attacked the s"ending as a "artisan slush und, asking why it was

used to build ga@ebos and "arks in the riding that had no obvious connection to the

200 8 summit.

)r. aird argues that in the grand scheme o things, very ew stimulus "ro;ects were

controversial. 5'eo"le ;oke about the ga@ebo in )r. %lement/s ridingK ? I mean

there/s a ga@ebo right there,3 he said, "ointing out the window to one behind the

'arliament uildings. 5y and large, it was "retty good. *e did some incredibly

e!citing things.3


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)ayors across the country would certainly agree. +timulus s"ending meant new

cash or community centres and s"lash "arks, as well as less glamorous "ro;ects like

sewer and road work. ttawa/s determination to receive credit or the s"ending

remains a "oint o heated debate.

#!tensive rules ensured that large signs "romoted all s"ending big and small ?

including a new doorknob at an =%)' building in %harlottetown.

$he one thing I su""ose I/d like to see less o is less advertising and billboards,3

said ttawa )ayor Jim *atson., who was an ntario cabinet minister when the

stimulus was launched. 5It seemed a little overkill to have these signs "lunked u"

everywhere.3

)easuring results

ut did the government/s "lan achieve its number one goal ? to mitigate the worst

eects o a recession that drove the unem"loyment rate to 8. "er centB

$he 'arliamentary udget ice L'M ? then led by Hevin 'age ? tracked stimulus

s"ending by surveying grou"s on the receiving end o the government cash. Its 200

re"ort concluded that some "ro;ects, such as solid waste management "ro;ects,

were not very good at creating ;obs, while s"ending on "ublic transit was 5very

eective3 at creating em"loyment. +"ending on "orts and highways was also seen


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as a good way to create ;obs.

'edro 1ntunes, an economist at the %onerence oard o %anada, said %anada

invested in mostly "roductive inrastructure and got the money out the door relatively

ast. Cooking back, it/s now clear that "ublic investment inrastructure as a

"ercentage o D' shot u" noticeably in 2007 and 200, countering the eects o

the recession.

$he timing was okay. $he ty"e o s"ending was okay,3 he said. 5ver the longer

term, it/s not like we were overs"ending. *e needed the inrastructure.3

ood inrastructure beneits the country over the longer term, he "ointed out. #ven

hockey rinks in remote locations, he suggested, im"rove the Auality o lie in %anada.

ut once the short-term ;obs are gone, the lasting economic beneit o "lanters and

arenas and ga@ebos "ales ne!t to cutting-edge labs or ma;or new highways.

ttawa/s demand or shovel-ready "ro;ects created a bias or the Auick-and-easy

over higher-Auality "roductive inrastructure. $he reat =ecession was a missed

o""ortunity to build a better legacy.

+ome e!"erts also argue that much o the government stimulus came too late. It had

almost no im"act when it should have counted most ? as the economy "ulled out o

recession in 2007.


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1 200 re"ort by the Nancouver-based Fraser Institute, a conservative think tank,

ound a 5negligible3 beneit rom government s"ending and a 5small3 boost rom ta!

relie in the second hal o 2007, based on a review o D' data or the "eriod. $he

Fraser Institute economists argue instead that a rebound in e!"orts drove the

recovery. 5overnment stimulus s"ending did not have a material im"act on

%anada/s economic recovery,3 according to the study.

Finance %anada did not track how many ;obs were created by each "ro;ect. Instead,

it used a broad economic model that tried to calculate the em"loyment im"act. It

re"orted that the stimulus 5created or maintained3 2


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only "roduced a multi"lier o 0.2 "er cent. Finance stated that because o the

5considerable uncertainty surrounding the si@e o iscal multi"liers, "rudent estimates

have been used.3

)r. 'age said the ' attem"ted to create its own economic model to test the

eectiveness o having a stimulus "lan versus not having one, but the "ro;ect "roved

to be too diicult.

4ou ;ust can/t do it,3 he said. 5It/s almost im"ossible. 4ou/re in un"recedented

waters when banks are sei@ing u" and colla"sing.3

$he central argument against inrastructure s"ending as a way to lit a struggling

economy comes down to timing.

%anada/s economy had begun to recover by the s"ring o 2007, long beore there

could have been any im"act rom the stimulus-laden budgets o the ederal and

"rovincial governments, argued Finn 'oschmann, vice-"resident and research

director at the %.D. (owe Institute in $oronto. 5+igniicant deicit s"ending ater

2007-0 was certainly unnecessary rom an economic "ers"ective in %anada,3 he

said.

In a re"ort this week, the Fraser Institute aulted ttawa and the "rovinces or

kee"ing the stimulus ta" on and "iling on debt long ater the emergency was over.


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$he ederal government alone will amass nearly 0-billion in deicits between 20

and 209 ? all o it ater the recession was done.

+ome argue that the government/s stimulus "lan accom"lished a very im"ortant goal

that can/t be measured ? it calmed ears o an economic colla"se ater the bank

ailures in .+. and #uro"e.

*hen nobody/s certain o the downside, activity kind o ree@es,3 said =oyal ank

o %anada chie economist %raig *right. 5+o in some sense, iscal "olicy, not ;ust in

%anada but around the globe, kind o ste""ed in and to a degree underwrote the

worst-case scenario. It kind o drew a line under how bad things could get and I

think that had an indirect im"act on conidence.3

$hat view gets at the undamental "roblem in measuring the im"act o stimulus.

$hose who believe it had a "ositive eect "oint to actors ? like conidence ? that

can/t really be measured. #conomists like to evaluate a "olicy by considering what

they call the counteractual ? by trying to answer the Auestion, what would have

ha""ened i the "olicy had not been thereB

1s a relatively small economy with dee" international trade links, %anada "robably

could have avoided ma;or s"ending "rograms as long as other nations stimulated

their economies.


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#conomist Don Drummond argues such a 5ree rider3 a""roach would have made

%anada a "ariah among the 20. )r. Drummond was chie economist or $oronto-

Dominion ank at the time and is now )atthews ellow at >ueen/s niversity.

(e said there is no sim"le, easy answer to the Auestion o whether the billions s"ent

in ttawa and "rovincial ca"itals made a dierence.

4ou can/t answer whether that would be a good or a bad thing until you can answer

that counteractual Auestion *ould we be in a reeall and how would the %anadian

economy have been dierent i we didn/t have that stimulusB3 he said. 51nd I don/t

care i it/s the Fraser Institute or the government, no one can directly answer that

Auestion.3

#ven i there was some beneit, )r. Drummond argues that it was short-lived and

Auickly reversed by several years o austerity as governments cut s"ending to shrink

deicits. +ome o the s"ending on inrastructure was valuable, he said, but the

reAuirement that "ro;ects be 5shovel ready3 meant that "ro;ects that could have

"roduced greater long-term beneits were overlooked.

I think the best you can say is, i this e!ercise o massive stimulus had a "ositive

"ayo it was that it stabili@ed the economy. #nd o sentence,3 he said. 5It has not

achieved any long-run goal.3


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$he way ahead

Five years on, the legacy o the stimulus s"ending survives on university cam"uses,

in cultural centres and in thousands o kilometres o as"halt. ut it also lives on in

the orm o a worrying and "ersistent debt hangover.

In a normal recovery, much o that debt would be gone. +low growth has translated

into sluggish ta! revenues. ntario and >uebec look most vulnerable, with a return

to balanced books still a ew years o. 1bout 8< "er cent o all "rovincial and

territorial debt belongs to those two "rovinces and international rating agencies are

kee"ing a watchul eye.

>uebec is looking at "erha"s decades o "ain. 1 recent niversitE de +herbrooke

re"ort by "roessors Cuc odbout and 'ierre Fortin warned that even beore the

reat =ecession, >uebec/s s"ending and ta!ation "atterns were on "ace or chronic

deicits over the coming decades. $hey note that the "rovince/s demogra"hic and

inancial "roblems demand tough choices rom "olitical leaders.

Dwight Duncan, who was Finance )inister in Dalton )cuinty/s Ciberal government,

has no regrets. $he "rovince did what it had to do in a time o crisis, he believes, to

kee" an auto-de"endent "rovince rom tumbling into de"ression. ut the "rovince did

so largely with borrowed money, leaving a legacy o debt that could ham"er the


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"rovince/s ability to deliver basic services when interest rates inevitably rise.

$hat is a ticking time bomb, both or ntario and %anada, because o the debt we

incurred to do the things that we did,3 )r. Duncan said. 5It causes me more worry

now than it did at the time.3 $he "rovince/s debt service costs in 202-G consumed

0.G-billion, : "er cent more than in iscal 2008.

%olin (ansen, who was .%./s inance minister at the time and recalls the "eriod as

5those months rom hell,3 said stimulus must be considered a success sim"ly

because it avoided the worst.

I you look at how well %anada has ared coming through these last ive years, I

think that/s the real test,3 he said. 5$here/s "robably things that could have been

done dierently, but I think over all, the %anadian a""roach was successul.3

Few "eo"le watched the government/s s"ending "lans as closely as )r. 'age, who

was a thorn in )r. Flaherty/s side during his ive-year term as %anada/s irst

'arliamentary udget icer. ut on the sha"e o stimulus and the government/s

ability to get it out the door, he gives the %onservatives high "raise.

It did have an im"act,3 he said. 5$o me, the government/s stimulus "ackage is

"robably the high-water mark o this government since it/s been in "ower.

It was a time o crisis. 1nd yeah, they got caught com"letely unaware that this


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recession was coming. It didn/t look like they wanted to do it, but then the crisis

really hit and they res"onded a""ro"riately.3

)unici"alities say that now that ttawa is taking a longer-term a""roach to

inrastructure s"ending, cities should have more detailed "lans in "lace should there

ever be a need to move u" construction schedules to give the economy a boost.

Federal %onservatives aren/t so sure recent lessons will a""ly to more ty"ical

recessions.

$his was obviously a one-time thing and it was under e!traordinary circumstances,3

)r. aird said.

*hen )r. Flaherty tables his 20< budget on $uesday, it will show ttawa/s years o

deicit s"ending are nearly over. (e has "romised a signiicant sur"lus by 209-:

and some economists say ttawa might even climb out o the red this year, when

the inal numbers are in.

$uesday/s budget sets the stage or a new era o sur"luses and a 209 ederal

election over whether that money should go toward reducing debt, new s"ending or

reducing ta!es.

)r. Flaherty has low-balled e!"ectations or budget day by scheduling it during the

+ochi lym"ics. ""osition "arties are already dismissing this as a 5do nothing3


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budget. ut in many ways, )r. Flaherty is releasing the inal cha"ter o a ma;or

budget he tabled ive years ago.

$he 2007 budget was most deinitely not a do-nothing budget. *hether 2007 would

have been the right time to do nothing is still hotly debated.

$he decisions made ive years ago will be re-e!amined again when uture

governments ace the ne!t big economic downturn. $o those uture leaders, )r.

Flaherty oers some advice.

1s much as we all have "olitical "rinci"les and things we believe in, you cannot be

ideological as a inance minister,3 he said. 54ou have to be "re"ared to do what

needs to be done to "reserve ;obs and the economy ... certainly in my view it was

necessary to do what we did, and that was run a big deicit.

1nd it/s necessary to do what we/re doing ? that is, drive it back to balance.3

-------------------------------------------------------------------

+ 1D DC#

Nale Civing *ith Cakes %entre

Caurentian niversity/s Nale Civing *ith Cakes %entre was the "erect candidate or

ederal inrastructure money.

Fisheries biologist John unn had been toiling or < years to ind a home or the


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university/s various water ecology labs and activities. y 2008, he had commitments

or :-million rom the university, nickel giant Nale +1 and various levels o

government. (e had architectural drawings and a "rominent site on =amsey Cake

near the cam"us entrance.

ut it wasn/t enough. $he centre was 9-million short, and the economy was headed

south.

#nter the 2-billion Hnowledge Inrastructure 'rogram LHI'M, "art o ttawa/s

#conomic 1ction 'lan, announced in early 2007.

*e had already "itched it so many times that our numbers were very accurate,3

e!"lained 'ro. unn, director o the centre. 5*e had costed out everything and it

was ready to go.3

$he ederal HI' money leveraged a total o more than 9-billion in "ro;ects across

the country.

ecause most schools already had wish-list "ro;ects, the rollout was 5remarkably

Auick,3 according to 'aul Davidson, "resident o the 1ssociation o niversities and

%olleges o %anada. 'ro;ects were a""roved between January and June o 2007,

with cranes "o""ing u" at universities by the summer. )ost o the structures were

com"leted by 20.


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$his was smart inrastructure,3 )r. Davidson argued. 5It has created a really

im"ortant legacy on %anadian cam"uses.3

1t Caurentian, the 20-million centre and its cutting-edge labs have become a

magnet or talent it never could have attracted, including a ational =esearch %hair

in environmental microbiology, along with do@ens o researchers and 'hD students.

irch arrows school

$he irst reserve community to receive a new school through the stimulus was irch

arrows, a remote First ation in northwestern +askatchewan.

'rior to the stimulus, there was no school on the reserve or rade 0 and u". Hids

in those grades had to take a bus or more than an hour each way to attend an o-

reserve school in Ca Coche. nly about one or two kids rom the community were

graduating high school each year.

ow with the new 29-million school, the community had : new high-school

graduates this year and


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$he luenose II

$he luenose is a symbol o "ride or ova +cotia and all o %anada, but the

luenose II "ro;ect announced in the early months o stimulus s"ending is now

o"enly described as a boondoggle.

In 1"ri,l 2007, %onservative minister 'eter )acHay and the then $ory 'remier

=odney )acDonald announced


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returned to the water in Cunenburg in +e"tember ater three years in dry dock or

re"airs, but has not yet been cleared by regulators. $he new Ciberal 'remier,

+te"hen )ceil, recently called the "ro;ect a 5boondoggle3 that should be

investigated by the 1uditor-eneral.

#mbarrassing, in a word,3 said ova +cotia +enator *ilred )oore, who re"resents

the region and was a volunteer undraiser or maintenance o the luenose II "rior to

the stimulus announcement.

1round Cunenburg, they/re embarrassed about it,3 he said, listing the rising cost,

delays and mistakes that needed to be i!ed. 54ou/ve got a "retty "roud community.

$hey/re used to building boats and doing well, so it/s not sitting very well. $his is too

bad.3

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Stimulus gamble How Ottawa saved the economy – and wasted billions

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