The Short-Lived "Toronto Consensus"

Stephen Harper's G20 triumph - a unanimous pact to slash budget deficits - only lasted five days.

Five days after the G20 countries cobbled together an agreement to cut their deficits in half by 2013, evidence of a slowing economic recovery in the U.S. rendered the agreement virtually meaningless.

The U.S. Bureau of Labour Statistics reported on July 2 that private sector job growth had slowed in June and that there was a large increase in people who had left the work force (i.e. not working and not looking for work).

That’s exactly the scenario – the possibility of a “double dip” recession in the U.S. – that Barack Obama seemed to have in mind when he initially resisted Canadian, British, and German calls for fiscal austerity. To the surprise of many, President Obama agreed to deficit reduction targets in Toronto, but the agreement was less than it appeared: the targets are voluntary, not obligatory.

In any event, the agreement – which the Globe and Mail grandly labelled the “Toronto Consensus” – is even less meaningful now that surprisingly bad employment numbers have appeared in the U.S., just five days after the G20 meeting concluded.

If the “Toronto Consensus” has already been overtaken by events, what were the tangible results of the G20 meeting? Very little. Read the 29-page summit declaration for yourself. Lots of verbiage, little substance: no agreement on financial regulatory reform (countries are free to introduce bank taxes, if they wish, or not) and lots of “reiterating” earlier commitments.

Yet the Globe and Mail’s day-after coverage trumpeted the meeting’s accomplishments and substance. John Ibbitson, for instance, poured praise on Mr. Harper for successfully shepherding the G20 leaders towards a consensus.

Now, let me be clear: The Prime Minister probably did the best job he could under circumstances that were not conducive to a meeting of minds on key issues including fiscal stimulus vs. restraint, and financial sector reform.

But the paper-thin outcomes of both the G20 and G8 summits should raise serious questions about the costs and benefits of these mega-meetings. When the G20 leaders meet once again in Seoul later this year, they should consider making future G20 summits coincide, say, with the annual meeting of the UN General Assembly in New York.

For Canada, the legacy of hosting the G8/G20 is unlikely to be a happy one. I don’t mean to pick on the Globe – although calling oneself “Canada’s national newspaper” does invite a bit of extra scrutiny – but it misjudged the news coming out of the summit weekend.

What made the summit extraordinary was not the contents of the summit declarations, which had either been announced earlier (in the case of the maternal and child health initiative) or were largely empty pledges (in the case of the “Toronto Consensus” on fiscal restraint). Rather, the big news was the behaviour of police on the streets of Toronto including the mass arrest of seemingly innocent people, the facts of which still need to be established.

On the day after the summits, there was one small article below the fold on the front page of the Globe, downplaying the significance of these arrests. Only when public dismay at police behaviour became clearer in the ensuing days did its coverage shift. (Today, a week after the summit, the G8/G20 page on the Globe’s website is dominated by the aftermath of the police action, not the outcome of the leaders’ meetings.)

With great regret, I expect that this will be the legacy of the summit weekend in this country. And to think we paid a billion dollars for it…

This article originally appeared on Roland Paris's blog, True North.