The word on everyone's lips at this year's G20 summit is Syria, but Canada's prime minister, Stephen Harper, is signalling his intention to keep his focus on global economics.
Even before Russian President and host Vladimir Putin greeted leaders at the opulent Constantine Palace in St. Petersburg on Thursday, Harper had already thrown a challenge to other G20 nations.
His government is committing to a debt-to-GDP ratio of 25 per cent by 2021 and encouraging others to follow suit with their own targets — despite earlier G20 pledges this year to favour growth-oriented policies over austerity.
"It's important to have targets," Finance Minister Jim Flaherty told reporters in St. Petersburg. "It's important that people have goals and countries have goals at which to aim. I'm confident that we can accomplish this goal just as I'm confident we can balance the budget again in 2015."
The Canadian debt target seems to include some wiggle room. A year ago, the Finance Department forecast a ratio of 23.8 per cent by 2020-21 in a report on the aging population.
The finance minister acknowledged Thursday that the OECD's recent better-than-expected economic outlook for Canada, which forecast two per cent growth in 2013, could mean the government's new target may be achieved sooner than planned.
"We're going to aim at 25 (per cent). If we do a bit better, that's great," Flaherty said.
Fiscal prudence key
Flaherty framed the debt-to-GDP ratio target as a question of balance, rather than austerity.
Prime Minister Stephen Harper walks through the gardens of the Constantine Palace with Foreign Affairs Minister John Baird, left, and Minister of Finance Jim Flaherty on Thursday prior to the G20 Summit in St. Petersburg, Russia. (Adrian Wyld/Canadian Press) "We are spending money on job creation and on job training, very substantial long-term infrastructure projects, so that's one part of the balance," Flaherty told reporters.
"The other part of the balance is making sure you're back to balanced budgets and addressing the debt-to-GDP ratio in the medium term."
He said being fiscally prudent and setting targets like the debt-to-GDP ratio is an important part of protecting the country from "what might come from abroad," that is, events like the 2008 financial crisis.
He stressed that following that 2008 crisis, the leaders of the world's developed countries decided to make the G20 "the primary economic forum for world decision-making."
"We need to maintain that," Flaherty said. "This is a world economic forum. It's fundamental that these kinds of decisions and discussions on important policy issues take place at G20 meetings."
He did acknowledge, however, that not all G20 participants have the same approach to fiscal policy.
"There is some difference of opinion," he said. "Americans tend to emphasize creating more jobs and [are] less concerned about accumulation of public debt and printing more money, with which I've never agreed.
"The Germans tend to be more prudent and frugal like Canadians tend to be."
Growth vs. austerity
How countries find the balance between austerity and job creation, as some struggle with staggering unemployment rates, is one of the dilemmas facing the G20. When finance ministers and central bankers met in July, they agreed to bolster growth before turning their attention to lowering deficits and debt burdens.
But Harper has consistently staked his ground in the debt-reduction camp. He was a key driver behind a commitment made at the Toronto G20 summit in 2010 to reduce debt around the world and has made deficit reduction his top domestic priority leading up to the 2015 federal election.
Governments aren't the only players weighing in.
Farah Mohamed, president and CEO of the (G)irls 20 Summit and an official civil society representative at the G20, said slashing social programs to keep deficits down will catch up with a country.
"That's going to have to come from somewhere, and it's usually from the social profit side, the NGOs that are delivering services," said Mohamed, whose group advocates for the economic empowerment of women and girls.
"If you cut and cut and cut, at some point society will suffer for that, whether it's in education, health care, social benefits — there are a whole bunch of factors that have to be managed when you're trying to reduce your deficit."
Keep your commitments, Flaherty urges
Within the G20, Canada has been urging countries to commit to hard targets for debt reduction. At a meeting of G20 finance ministers and central bank governors last April, it found support from Germany and the United Kingdom, but not from other big players such as the United States and Japan.
"I think this is why these meetings are important; we try to remind people what their commitments are," Flaherty said in Russia Thursday. "We try to remind people of what has happened very recently in terms of serious recession and serious job losses in many countries in the world and to encourage people to keep their commitments."
Russia has also been a supporter of fiscal consolidation — the reining in of stimulus and reduction in spending as the global economic outlook improves.
Flaherty said he can't predict whether Canada and Russia would end up agreeing on at least economic issues during the summit. Foreign Affairs Minister John Baird just a day earlier criticized Russia for its "intractability" on the Syrian question.
Baird and other foreign ministers will conduct side meetings at the G20 to discuss the Syrian government's alleged use of chemical weapons against its own people two weeks ago.
U.S. President Barack Obama will be seeking support from other G20 leaders for a strike against Syria as a response to attack. Putin has said such action without United Nations sanction would go against international law
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