 Prime Minister Harper, it's my great pleasure to welcome you back to Davos for your second participation here. You visit today comes just eight months after your resounding victory in national elections. Indeed, I think much to the envy of many leaders here in the audience and elsewhere, you managed actually to increase your standing in parliament passing from a minority to a majority government for the next several years. Canada has recognized for having navigated the waters of the international financial crisis in a very impressive manner. Your own personal leadership in this regard, together with the sound regulatory and business context for which Canada is so well known, have served the country very well. Prime Minister, we look forward to hearing your impressions of the current state of the global economy, and in particular the role and contribution that what many people call the Canadian model can make to improve the current economic challenges facing much of the industrialized world. Ladies and gentlemen, please welcome Prime Minister Harper of Canada. Merci beaucoup. Thank you, Professor Schwab, for that kind introduction. I also want to thank you particularly for the invitation to speak here that you extended to me earlier this year. But more than that, Professor, you have made the world economic forum an indispensable part of the global conversation among leaders in politics, business, and civil society. And in the face of continuing global economic instability, the opportunity that this gathering provides is now more valuable than ever. So I know everyone here joins me in thanking you for, in the service really of the common good, your leadership and your vision. My greetings to Ambassador Santee, to the Governor of the Bank of Canada and on internationally as chair of the Financial Stability Board, Mark Carney, to our hardworking minister of international trade, Ed Fast, and to the best finance minister on the planet, Jim Flaherty. That's an official title, he tells me. And let me just say that I'm especially proud to see so many outstanding Canadian business leaders making their presence felt here in Davos. Ladies and gentlemen, I will use my time today to highlight Canada's economic strengths and to frame the choices we face as we work to secure long-term prosperity for our citizens in a difficult global environment, and I should say instability that in a difficult global environment is likely to remain with us. As you know, Canada has gained a superior economic performance at most of the developed countries during these last few years, and it is difficult for the world economy. Forbes magazine ranks Canada as the best place on the planet for businesses to grow and create jobs. The OECD and the IMF predict our economy will again be among the leaders of the industrialized world over the next two years, and one more cherished accolade of course is that for the fourth year in a row, this body, the World Economic Forum, says our banks are the soundest in the world. These evaluations are the result of sound fundamentals. Among G7 countries, Canada has the lowest overall tax rate on new business investment. Our net debt-to-GDP ratio remains the lowest in the G7 and by far, and while we remain concerned about the number of Canadians who are still out of work, Canada is one of only two G7 countries to have recouped all of the jobs lost during the global recession. Indeed, more Canadians are now working than before the downturn. How was this achieved? Confronté à la pierre Crése économique mondiale depuis des années 30, notre gouvernement a mise en œuvre à des mesures de circulation économique parmi les plus important et les plus ciblés du G7. We made historic investments in infrastructure, we encouraged businesses to invest and help them avoid layoffs, we put substantial funding into skills training, and we extended support for workers who lost their jobs. These things we did on a timely, targeted, and temporary basis. We did not create permanent new programs or government bureaucracy. As a consequence, our deficit is now falling, our debt-GDP ratio has already peaked, and we do not need to raise taxes going forward. I should add, we also did not reduce immigration or give in to protectionism. Instead, we have maintained the high levels of immigration that our aging labour force of the future will require. We have continued as well to pursue new trade agreements, and we have taken action to make Canada among the G20 countries the first terra-free zone for manufacturers. We have established these policies because our number one priority is prosperity, namely economic growth and the creation of jobs. We have pursued these policies, ladies and gentlemen, once again, because our number one priority as a government is prosperity, that is economic growth and job creation. Now that may sound obvious, almost cliched, but is it really? As I look around the world, as I look particularly at developed countries, I worry, I wonder, and I ask whether the creation of economic growth and their four jobs really is the number one policy priority everywhere. Or is it the case that in the developed world, too many of us have in fact become complacent about our prosperity, taking our wealth as a given, assuming it is somehow the natural order of things, leaving us instead to focus primarily on our services and entitlements? Is it a coincidence that as the veil falls on the financial crisis, it reveals beneath it not just too much bank debt but too much sovereign debt, too much general willingness to have standards and benefits beyond our ability or even our willingness to pay for them? Now, I don't know, but what I do know is this. Firstly, the wealth of the Western economies is no more inevitable than the poverty of emerging ones. And that the wealth we enjoy today has been based on and only on good growth-oriented policies, the right-often tough choices, and the hard work done in the past. And second, that regardless of what direction other Western nations may choose, under our government, Canada will make the transformations necessary to sustain economic growth, job creation and prosperity now and for the next generation. That further means two things, making better choices, better economic choices now, and preparing ourselves for the democratic pressures that the Canadian economy faces. And what we must do now, first we will, of course, continue to keep taxes, tax rates down. That is central to our government's economic vision. But we will do more, much more. In the months to come, our government will undertake major transformations to position Canada for growth over the next generation. For example, we will continue to make key investments in science and technology necessary to sustain a modern competitive economy. But we believe that Canada's less than optimal results for those investments is a significant problem for our country. We've recently received a report on this, the Jenkins Report, and we will soon act on the problems the report identifies. We will continue to advance our trade linkages. We will pass agreement signed, particularly in our own hemisphere. And we will work to conclude major deals beyond it. Comme vous le savez, nous nous attendons à compléter les négociations d'un accord de libre échange avec l'Europe cette année. We expect to complete negotiations on a Canada-EU free trade agreement this year. We will work to complete negotiations on a free trade agreement with India in 2013. And we will begin entry talks with the Trans-Pacific Partnership, while also pursuing other avenues to advance our trade in Asia. I will, of course, for example, be making another official visit to China very shortly. We will also continue working with the Obama Administration to implement our Joint Beyond the Border Initiative. This is our plan to deepen our economic and security links to our most important partner. However, at the same time, we will make it a national priority to ensure we have the capacity to export our energy products beyond the United States and specifically to Asia. In this regard, we will soon take action to ensure that major energy and mining projects are not subject to unnecessary regulatory delays, that is delay merely for the sake of delay. This complements work we're already doing and that we will move forward on with the Canadian Federation of Independent Business to cut the burden of red tape for entrepreneurs. We will also undertake significant reform of our immigration system. We will ensure that while we respect our humanitarian obligations and our family reunification objectives, we will make our economic and labor force needs the central goal of our immigration efforts in the future. As I said earlier, one of the backdrops for my concerns is Canada's aging population. If not addressed promptly, this has the capacity to undermine Canada's economic position and for that matter, that of all Western nations, well beyond the current economic crisis. Immigration does help us address that and will even more so in the future. Our demographic situation also represents a threat to social programs and services that Canadians and Canadians agree to. This is why we will take important measures in the future. Our demographics also constitute a threat to the social programs and services that Canadians cherish. For this reason, we will be taking measures in the coming months, not just to return to a balanced budget over the medium term, but also to ensure the sustainability of our social programs and our fiscal position over the next generation. We've already taken steps to limit the growth of our health care spending over that period. We must do the same for our retirement income system. Fortunately, the centerpiece of that system, the Canada Pension Plan, is fully funded actually sound and does not need to be changed. For those elements of the system that are not funded, we will make the changes necessary to ensure sustainability for the next generation will not affect the current recipients. Now let me summarize, ladies and gentlemen, by saying this, that notwithstanding Canada's many advantages, we remain very concerned about the continuing instability of the global economy of which we are very much apart. The problems afflicting Europe, and for that matter the United States, are not only challenging today, but in my judgment, threaten even greater problems in the future. I mean said that each nation has a choice to make. Western nations in particular face a choice of whether to create the conditions for growth and prosperity or to risk long-term economic decline. In every decision or failure to decide, we are choosing our future right now. And as we all know, both from the global crises of the past few years and from past experience in our own countries, easy choices now mean fewer choices later. Le choix du Canada sera de façon claire et sans détour de prendre en main et de maîtriser notre avenir, d'être un modèle de confiance, de croissance et de prospérité pour le 21e siècle. Canada's choice will be with clarity and urgency to seize and to master our future to be a model of confidence, growth and prosperity in the 21st century economy. Merci beaucoup. Thank you, ladies and gentlemen, for your kind attention. Prime Minister, you have talked about all your reforms in Canada, and maybe I will come back. But if I take the context, which is so important, and as a G20 country, what, and having listened to President Calderon, quelles sont les grands objectifs que vous prévoyez pour la Réviance cette année sous la présidence du Mexique, quelles sont vos désirs au sourire? Merci. C'est toujours une bonne question. Thank you. That's always a good question. As you know very well, the G20, despite having certain constraints, it's really the only genuine forum for international governance of this global economy. I would hope the two things, firstly, that we will not at that point still be discussing the crisis in Europe, and I would have found a solution by then, and I really hope that it will be oriented towards a real economic objective, real issues I hope that the subject will be too numerous, that the approach will be focused, and that the work will coordinate the international response to the crisis, and that we will continue to implement the campaign of action, which is an important step forward. When you were last here, you proposed, and I was very impressed, a fresh approach to international relations based on the notion of enlightened sovereignty. I like very much this definition, and you defined it as a natural extension of enlightened self-interest, and which is, I quote, less about lofty promises and real results, less about narrow self-interest in sovereignty's name, than an expanded view of mutual interest in which there is no room for all to, there is room, only room, for all to grow and prosper. If you look back, is the world moving into this direction? I think that through the G20 process it is, it's slow and imperfect, but I do think broadly speaking there's a realization that we're all in this boat together. I go back to the great crisis of late 2008, early 2009, when we had this torrent of this avalanche of flood of bad news and crisis, and we very quickly found it was affecting all of us, and therefore the solutions have to engage all of us. I'm not suggesting for a second that countries won't and don't and shouldn't pursue self-interest, but I think we should always ask ourselves, and this is obviously most important to bigger the country and the more influential, are the choices we are making and the approaches we are taking, are they compatible with everyone else doing the same or similar things? Because I think if any one of us, and in particular big players, take a course of action that can only work for them, then that renders the entire system that we're all a part of, unstable and uncertain. And I do see some signs incrementally at all of these various G20 conferences that we are moving to that understanding, to actions based on them, but I don't want to exaggerate. The new world isn't completely at our doorstep. Prime Minister, when we listened to President Calderon just half an hour ago, I think many people were impressed, including myself, about the high number of people who are turned out by the universities, particularly also in those areas which are related to innovation. What is your, you spoke about innovation rapidly, but how do you want to enact really innovation? Well, there's two things. In Canada, since we came to office, we have tried to affect a bit of a shift. The reality in Canada is this, that we have actually very high level of spending of the Canadian public sector on science and technology, research and innovation. One of the matter is we don't have the private level of spending that would match that, and we haven't seen the kind of private sector results and results in commercialization that we've been seeking. So one of the first things we did when we announced our first science and technology policy was putting a substantial new emphasis on commercialization and the encouragement of partnerships between researchers and the private sector. And that, to be frank, that initially caused some pushback in the academic community, but our experience has been that Canadian academic community adapted very quickly to that, and we saw the changes we want there. We haven't seen the changes we really want to see on the private sector side. Now this is, of course, a great generalization because there's, of course, Canadian companies that are cutting edge innovators, but broadly speaking, the Canadian business side of the economy is not as innovative as it needs to be. We've done a report on that. That report has looked at a range of our expenditure and tax policies and government structures, given us some pretty sweeping recommendations. And while we don't necessarily subscribe to all the recommendations, we certainly subscribe to the diagnosis of the problem and to the nature of the kind of changes that have to be made, and we will be making those. I would say this, though, we're not under any illusion. This is a longer-term culture shift that has to happen in many segments of the Canadian economy, but we're certainly prepared to work with business to see that happen because I agree with you. It isn't just necessary for advanced economies in the future to continue to work hard and invest well and make good decisions. And the nature of our economy is we have to be innovative. We have to be at the high end of the value chain, and the innovation is going to be critical. Can you export? If I call it Canadian model, and I should tell you, Prime Minister, you know in our competitiveness report, which we publish every year, the Canadian banks rank usually as the soundest banking system, and we have seldom so many references to a statement which we are making compared with this one. Now, you have a kind of model. Can it be exported to us countries? I think some aspects are more easily exported than others. Let me give you a couple of examples. The one you asked about the banking system, you know, through the G20, through Basel III, through the work we've been co-chairing with India on international financial regulatory reform and the work, obviously, that Mark is doing through the Financial Stability Board, we are trying to encourage international practices and international forms of regulation that look very Canadian that are, I think, strong, prudential, comprehensive, but at the same time not excessive or punitive or that attempt to micromanage financial institutions. That's what we're trying to do. I think we're having some success. The part of the model that it's more difficult to export is the fact that the Canadian financial sector has a particular structure where the banking side and the insurance side are dominated by a relatively small number of large players and that enables a really comprehensive interaction of independent government regulators with the people that they are regulating and keeping that independence but also that interaction and flow of information and understanding of the real world is something that would be difficult to replicate in Europe at large or in the United States. So there are some limits but I think, broadly speaking, we can do that. Another aspect I think of the Canadian model is that, you know, I do think among certainly developed countries, we really have been for a very long time, on the cutting edge of incorporating, accepting and incorporating and benefiting from great cultural diversity. Now, I'm not sure that we have made the full use of that in terms of international trade that we really should be making of it but we certainly have, for the most part, created a society where cultural diversity has led to greater mutual understanding among people rather than to stark divisions and ghettoization of the population. That's obviously a model that it's developed because of Canada's unique history and practices over a long period of time and, well, I think it's essential in all parts of the world, especially developed economies, it's obviously not something that is easily learned or exported overnight. Prime Minister, you have here in the room some of the most prominent Canadian business leaders. If you had one wish, it's a good opportunity outside Canada to have a wish towards your business leaders. What would it be? A wish for my business leaders. For your business leaders. Well, of course, we always call them to support the government. And look, actually, Canadian business community been very good about supporting government initiatives that are helpful to the economy. Look, as they say, our biggest wish with Canadian business is just a sector that is more innovative, that is looking broader at opportunities beyond merely our own market and that of the United States. But I think in fairness, Professor, the business leaders who are represented here are probably already in that category. So our work is really with the broader business community. So you can be proud of your business community. We're very proud of them, especially when they're right in front of me. And I hope they are proud. And I hope they are proud of Prime Minister. Thank you very much, Prime Minister. Thank you. Appreciate the time. Thank you.