Canada vows to support U.S. after attack, cuts rates
By Randall Palmer
OTTAWA, Sept 17 (Reuters) - Canada started to push its financial and political levers into gear on Monday, cutting interest rates, which helped spark a stock market rally, and vowing to do everything it can to aid Washington respond to Tuesday's attacks.
Like the United States, the Canadian government faced the multiple task of figuring out how to strike back at those responsible for the attacks, tighten its security at home and deal with economic ramifications.
The central bank, the Bank of Canada, matched the U.S. Federal Reserve's interest rate cut of one-half a percentage point to try to assuage investor concerns before markets opened on Monday morning.
The Toronto Stock Exchange's key TSE 300 index responded by rallying by as as many as 74 points in mid morning despite a big drop on New York's Dow Jones average as trade reopened there for the first time since Tuesday.
The airline industry, however, was suffering and Air Canada
(Toronto:AC.TO - news), the dominant carrier, said it would turn in a loss in the third quarter and would have to reduce its flights to the United States by 20 percent.
On military matters, Defense Minister Art Eggleton told CTV television: ``We do have capabilities that can be of considerable assistance and we will be providing what capabilities we have in this campaign against terrorism.''
And Foreign Minister John Manley said in an interview in Monday's National Post that Canada would ``unambiguously'' join U.S. military action.
``Canada is at war against terrorism,'' he said.
Nonetheless the office of Prime Minister Jean Chretien, who has consistently displayed a more cautious tone since the attacks on New York and Washington, was more tentative.
``We need to utilize the wisdom of patience,'' Chretien spokeswoman Thoren Hudyma said late on Sunday ahead of a parliamentary debate which was beginning on Monday morning.
The House of Commons, Parliament's elected chamber, was debating a resolution from Chretien expressing ``its sorrow and horror at the senseless and vicious attack on the United States of America'' and expressing ``heartfelt condolences.''
The resolution also reaffirmed the House's ``determination to bring to justice the perpetrators of this attack and to defend civilization from any future attacks.''
The United States government and opposition critics within Canada have in the past slammed Chretien's Liberal government for cutting defense spending to the bone in its battle against the deficit in the mid-1990s.
Sensitive to such criticism, Eggleton pointed out that Canada was in the front line in the war with Yugoslavia over Kosovo and also was active in Macedonia.
"We certainly will do everything we can, and we'll provide whatever resources we can.
``At the moment, we certainly are helping the United States in our NORAD (North American Aerospace Defense Command) obligations in protecting the airspace in North America. We have more of our CF-18 fighters on alert. We're helping them in intelligence information gathering,'' he added.
``But there'll be more to all of this effort and we'll be there working with the Americans and working with our allies.''
Former prime minister Joe Clark, leader of the minority Conservative Party, told reporters on Sunday evening: ``We don't need more pieties from the prime minister of Canada.''
``We have to recognize that we are operating on a set of assumptions Monday night that were proven fatally wrong on Tuesday morning. And we should be prepared to look where we have to look in order to determine our response,'' he said. |
