U.S. President George Bush delivered his final state of the union address Monday night, promising a US$150-billion aid package to boost a deeply troubled economy, and an international agreement to "slow, stop and eventually reverse the growth of greenhouse gases."
"As we meet tonight, our economy is undergoing a period of uncertainty," said Bush.
"America has added jobs for a record 52 straight months, but jobs are now growing at a slower pace. Wages are up, but so are prices for food and gas. Exports are rising, but the housing market has declined. And at kitchen tables across our country, there is concern about our economic future."
Economic problems in the U.S. have caused market turmoil in Canada. Last week, the Toronto stock market dropped more than 600 points, its largest single-day loss in seven years.
It quickly recovered much of that loss after the Bank of Canada and U.S. Federal Reserve took emergency measures to cut interest rates.
Canada will likely avoid a recession, Bank of Canada governor David Dodge suggested last week. But he said the country's gross domestic product is forecasted to only expand by 1.8 per cent -- the bank had previously predicted a growth of 2.3 per cent.
U.S. economic troubles were largely sparked by a fallout from the subprime mortgage crises, in which homeowners were hit hard by rising interest rates after signing no-questions-asked credit terms.
"We must trust Americans with the responsibility of homeownership and empower them to weather turbulent times in the housing market," said Bush.
As for the agreement to fight climate change, Bush said it will have to include developing nations. Canada's Conservative government has taken the same stance in international climate change talks, refusing to support deals that exclude major polluters like China.
"This agreement will be effective only if it includes commitments by every major economy and gives none a free ride," Bush said.
But the U.S. and Canada have backed away from their Kyoto targets.
Critics have said it would be unfair to expect developing nations to risk their economies in signing any major climate change deal, and that Canada and the U.S. must lead by example in reducing greenhouse gas emissions.
Bush also pledged US$2 billion over the next three years to fund technological initiatives for clean energy.
"Let us create a new international clean technology fund, which will help developing nations like India and China make greater use of clean energy sources," Bush said.
He also said the U.S. must reduce its use of fossil fuels.
"Our security, our prosperity, and our environment all require reducing our dependence on oil.," he said.
Rebuilding Afghanistan and Iraq
Bush defended the foreign policy of his government and military operations abroad over the past seven years, saying that "people, when given the chance, will choose a future of freedom and peace."
He promised to send 3,200 Marines to Afghanistan, where Canada has 2,500 military personnel serving at any one time, mostly in Kandahar.
But he said the Marines would "fight the terrorists and train the Afghan Army and police."
"Defeating the Taliban and al Qaeda is critical to our security, and I thank the Congress for supporting America's vital mission in Afghanistan," he said.
In Iraq, where nearly 4,000 U.S. soldiers have been killed since the war began, Bush remained defiantly optimistic about progress.
He said thousands of extremists, including "key al Qaeda operatives," had been captured or killed, and praised the success of a massive troop surge.
"Some may deny the surge is working, but among the terrorists there is no doubt. Al Qaeda is on the run in Iraq, and this enemy will be defeated," he said.
"When we met last year, our troop levels in Iraq were on the rise. Today, because of the progress just described, we are implementing a policy of 'return on success,' and the surge forces we sent to Iraq are beginning to come home."
