G20 agrees to deficit reduction targets

G20 agrees to deficit reduction targets
No bank tax in Toronto summit communiqué

Canadian Prime Minister Stephen Harper, front row, sixth from left, and leaders of the international community take part in the family photo at the G20 summit in Toronto on Sunday. (Adrian Wyld/Canadian Press)

Last Updated: Sunday, June 27, 2010 | 3:17 PM ET CBC News : The Canadian government has won a significant victory in securing specific deficit reduction targets in the G20's final statement at the Toronto summit, CBC News has learned.

A draft of the final communiqué from Sunday's G20 meeting in Toronto obtained by the CBC's senior business correspondent, Amanda Lang, includes an agreement by G20 leaders on a Canadian-led plan for advanced countries to reduce their deficits in half by 2013 and stabilize debt loads by 2016.

Lang reported sources as saying the document contains "99 per cent" of the final statement.

However, the document recognizes that not all countries are in the same position, which means the policies could be "tailored" to each country's varying circumstances.

As anticipated, a proposed bank tax — a measure vehemently opposed by Prime Minister Stephen Harper and his government — will not be included in the final communiqué.

Instead, the G20 statement leaves it up to individual countries to decide whether to pursue a financial levy to ensure that taxpayers are not required to foot the bill when banks fail, or "pursue other options."

'A clear message'

U.S. President Barack Obama, left, talks with Prime Minister Stephen Harper during the opening plenary session of the G20 summit in Toronto on Sunday. (Jason Reed/Associated Press)

Harper, the summit's host, used his opening address at Sunday's working sessions to try to convince fellow leaders that the fate of millions of people could suffer if they don't agree to cut deficits.

The prime minister said the G20 needs to take decisive, co-ordinated and balanced action as the world economy struggles to return to growth.

"We need to send a clear message that as our stimulus plans expire we will focus on getting our fiscal houses in order," Harper said.

Some European countries, including Britain, are more concerned with avoiding a financial crisis brought on by too much government spending. Those countries cited the trouble facing Greece earlier this year, when it had to be bailed out because it was close to running out of money.

U.S. President Barack Obama has argued that he would like to see more job creation before agreeing to a deficit reduction timetable, saying such a move could hurt the fragile global economic recovery from last year's financial meltdown.

The G-20 includes the world's major industrial countries — Canada, the United States, Japan, Germany, France, Britain, Canada, Italy and Russia — plus major developing nations such as China, India, Brazil. and South Korea.

With files from The Canadian Press