This Week sat down with incumbent Whitby-Oshawa MP Jim Flaherty three weeks before election day, to discuss his plans to address relevant issues in the riding and in Canada as a whole.

Opening:

We as the Conservative Party of Canada and Prime Minister (Stephen) Harper are running on our record, we have the advantage now. I think it is an advantage of a 2 1/2-year track record that people can look at and decide whether it's something they favour or not. It helps deal with what the other parties will inevitably try to say and that is that somehow there's a hidden agenda or that the Prime Minister is mean or these kinds of ad hominem attacks. I expect we'll see more of them in the next three weeks because substantively the opposition parties, particularly the Liberal party, are not doing well. When that happens, I've been in politics long enough to see the reality that it becomes personal. They can't say Stephen Harper is stupid because he's obviously quite smart so they'll say he's mean. I think that this time, though, we have the advantage of the track record and our party is concentrated on economic issues of the past 2 1/2 years, crime issues and family support issues, as well as restoring the military, which had been neglected for a long time. Our track record on the economic issues are strong. I've done three budgets, two economic statements, five budget bills -- all of which have become law despite the fact that we're only 127 members out of 308; we're a small minority in the House.

. . . What Mr. Dion is proposing is actually a huge risk for Canada. The kind of spending he's proposing, $70 or 80 billion in new spending would clearly require a huge new tax which he has in his Green Shift but it would also mean a deficit for Canada.

. . . We are good for this year, I see the numbers obviously and we will run a surplus this year, there's no question. In the future, we want to follow our economic plan, Advantage Canada. We want to continue to reduce taxes, reduce the public debt, use the interest saved on that to continue to reduce personal taxes. On the business tax side, we have the support of most of the provinces -- not Ontario yet -- to get to 25 per cent overall by 2012 to brand Canada as a low corporate tax jurisdiction. And to continue to invest in the universities and colleges because we know that's our challenge going forward in terms of a well educated, highly-skilled workforce.

Questions:

1. What would your party do to reverse or compensate for manufacturing job losses?

We have our $1 billion community trust fund, of which Ontario gets well over $300 million, which can be used for communities that are hard hit with manufacturing job losses, and we expect Premier (Dalton) McGuinty and his government to use that in areas like Oshawa and Windsor that have particularly been hit in the auto sector. There are also some municipalities in Ontario that get hard hit on the forestry side. Looking ahead, we have the auto innovation fund, which is resulting in investments in Ford in Oakville and through the Beacon Project, investment in a hybrid vehicle here in Oshawa and the car plant.

2. What's your analysis of what's happening with General Motors?

We are producing some of the least desirable, least marketable vehicles in North America here in Canada. More trucks, more large vehicles, more gas guzzlers here. And that has something to do with choices that have been made several years ago by the auto sector, so that disadvantages Canada. The real problem is that market share is slipping for the Big 3 and it's up to the management, in co-operation with the union, to make sure they're producing vehicles that people want to buy. And that's the long-term solution and why it's great to get a hybrid car into Oshawa, because that actually creates sustainable jobs over time. So I can be critical of management, about some of the decisions, no question about it. They need to have the co-operation of the CAW also in order to maintain a sustainable industry.

3. Does your party have a contingency plan should Canada fall into a recession?

We've already put in place our plan for this year and the tax plans that we have out to 2012. Our tax changes in Canada in terms of personal income tax, GST and business taxes, are not like the Americans did this year: one-time temporary cheques to everybody. They're permanent changes in our tax system so every year going forward there will be that stimulus in the Canadian economy. I'm actually optimistic about the Canadian economy because the corporate profits this year are good. Businesses are making money in Canada -- not in every sector, obviously -- but overall and employment numbers are good. And what I'm not hearing knocking on doors, is 'I'm losing my job' or 'My brother-in-law is losing his job.' I am hearing 'I have five years left at GM and I hope I can work out my five years.' The way to do it is to make sure that we have product that sells and the government is prepared to help on the innovation side to accomplish that.

4. What do you believe Canada's policy is in Afghanistan and is it working?

The why is that this is a United Nation-, NATO-sanctioned effort, so our allies are there and if we're going to be a good ally, we should be there as well. We are standing up for democracy, freedom and the rule of law and for people who are among the poorest, most savaged in the world. I was there about three weeks ago with Peter MacKay, minister of national defence, because he wanted me to see directly what was happening there. As an aside, I've never been more impressed with a group of young Canadians in my life. These are spectacular young people, including some from Whitby and Oshawa who are there now and coming back soon. Clear-eyed, great physical shape, know why they're there, volunteers all of them and are just a very impressive group of women and men. And we don't have that many there relative to what the Americans are doing. We did end up in the most dangerous province in Afghanistan and I think it's fair for people to say over time, is it fair for Canada to bear that much of the danger burden, which we are. The prime minister quite rightly has said we're not going to bear that burden indefinitely and we have a deadline of 2011, and I voted for that in the House of Commons.

5. Can you provide elements of your party platform that will directly benefit the environment?â?¨The most important thing is the reduction of greenhouse gas emissions by 20 per cent by 2020. I participated in the development in this plan because it has economic consequences. This is the first time in Canadian history that all industries will be regulated with respect to greenhouse gas emissions. Lots of folks in the industry think this will be too onerous. We're satisfied that it can be done in a way that it will have economic consequences but they're manageable. The last thing we need is the Canadian people actually turning against a green plan because of job losses, and not being able to pay their mortgages and their car loans so we have to keep economic life going in Canada, Secondly, we're going to regulate air pollution and we're looking for a 50 per cent reduction by 2015.

6. What issues and concerns are people bringing up as you go door-to-door?

Economic issues, primarily related to GM. (There's) just a sense of uneasiness about are we going to be OK with this large employer here. On the other hand, some positive comments about the fact that Darlington will be expanding and that's major long-term construction work for Durham Region, so people recognize that as well. It's not all uneasiness. Infrastructure and when's the 407 coming: I'm able to tell them 2013 and that's in writing and it's signed. So economy, infrastructure and I also hear about crime . . . a lot of people have moved here from Scarborough or different areas in the city that have seen some decay and what they say to me is 'Jim, don't let this place become like those places.'

7. Would your government consider increasing the maximum allowable Employment Insurance rate so those laid off have a bit more money to survive on?

It's not something that we've looked at in the past but circumstances change and the facts change and it's something we could look at when preparing the budget for next year. We do have a program specifically in place for older workers, 55 and older, but that probably doesn't do much for General Motors workers because they would retire by that time. It's designed more for people in the forestry sector, so we could look at that.

8. Is there anything you want voters to know about the issue of income trust tax, especially with your Liberal opponent so openly targeting the decision?

My opponent, I gather, casts himself as a knight on a white horse for people to invest in income trusts. Actually, he's one of the people who's made a lot of money selling income trusts to people. The fees on income trusts in the last year that they were vibrant was about $5 billion -- not million, billion -- and a lot of these brokers made a tonne of money taking good operating Canadian companies and converting them via an (initial public offering) to an income trust, which created no net gain for the companies but made a lot of fees for people . . . It is a concern and I won't shirk the issue. Our government, when we were running for office, indicated that we would not do what we did with income trusts. It's probably the most difficult thing I've done as finance minister and that was going to the prime minister in the late summer of 2006 and saying to him, 'The facts have changed dramatically and we need to look at this issue again. I'm recommending to you that we level the playing field.' . . . If we were wimps, if we weren't watching out for the best economic interests of the country, we would have done nothing. That's the easy course, but this was important to do.

. . . I regret that some people lost money and some people did lose money. There were people who sold quickly after the announcement. The whole idea is to have a level playing field. Income trusts were being created for the wrong reason; they were being created because there was a tax loophole and not because it was the best thing to do for the business. And now we will have (by) 2011, everyone playing by the same rules so a business that's in a corporate form or in an income trust form will pay the same level of taxation in Canada. There's a lot reasons but that's why we did what we did.

9. Can you explain why the decision was made to cut funding for the arts?

We eliminated some programs but we have other programs -- some of which will accomplish the goal of sending artists abroad. This is part of the expenditure management system that we brought in to the Government of Canada to control spending. There was not such a system there, which is hard to believe. The largest enterprise in the country is the Government of Canada, more than 400,000 employees. Programs get started every time, there's a view I think among some that programs should never end, that programs just go on forever. . . . We have a system now where government departments come to Treasury Board and explain what their least important five per cent of spending is. It's quite a good discipline in an organization because it makes people go through what they're doing in their departments or in their programs and then come to Treasury Board and say this is most important or this is least important. It's a lot of work, it's a lot of paper, but it's necessary. That's where those program eliminations came from as part of the bigger picture. Overall, our spending on the arts is higher than the previous government.

Last word:

There is a sense among middle-class people that they're stretched, even with our tax reductions that are significant that they're still paying too much tax and the burden is too high. Some of that relates to municipal property taxes and I sure hear that in Oshawa and to a lesser extent in Whitby, but I still hear it in Whitby . . . and then with the price of gas fluctuating and going as high as it has and again, people need gas for their cars to function in their day-to-day lives and I think that makes people feel put upon. The result of all of that is a demand for further tax reductions and stability in government. What I think people want is some assurance that things are going to be OK in the immediate and long-term.