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 Finance Minister Jim Flaherty speaks during Question Period in the House of Commons on Oct. 24, 2012. Earlier this year, Canada's refused to contribute to the $450-billion (U.S.) request to bolster the IMF’s reserves to deal with a worst-case scenario of a series of sovereign defaults over the next couple of years.

Chris Wattie/Reuters

This is more for the history books, but, well, that's something – especially when the existing narrative isn't quite right.

Remember the kerfuffle over International Monetary Fund boss Christine Lagarde's cash call earlier this year? She raised more than $450-billion (U.S.) to bolster the fund's reserves to deal with a worst-case scenario of a series of sovereign defaults over the next couple of years.

Most of the world's major economies pledged funds, save two: Canada and the United States.

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U.S. resistance was understood in Washington to be related to election-year politics. But Canada's vocal opposition caught many off guard. Ms. Lagarde was among them.

"It did surprise me in the first place because I think that Canada has a tradition of multilateralism of being very much a partner to the rest of the world and a very solid partner of the IMF," Ms. Lagarde, in Toronto Thursday to accept the Canadian International Council's 2012 "Globalist of the Year" honour, said in an interview with Report on Business editor Derek Decloet.

The comments represent Ms. Lagarde's first direct response to Finance Minister Jim Flaherty's leading role in a spat that dominated Group of 20 discussions from the end of 2011 through this year's G20 Summit in Mexico in June.

Mr. Flaherty characterized Ms. Lagarde's effort as a back door bailout of rich European countries. Former Prime Minister Paul Martin called the finance minister's positions a black mark on Canada's international reputation. Ms. Lagarde wasn't willing to go that far.

"Yes I was surprised to begin with, but I had long discussions with my friend Jim and I can understand where he's coming from," Ms. Lagarde said. "I can understand in particular the fact that he believes that the Europeans must address their issues, which is taking place."

Turns out she thinks Canada will be there with financial aid if things really go off the rails.

"The second point that he made very clearly to me was that if and when there was a need, Canada would be on board to support members of the institution but that he did not see a need for it to be ex-ante, if you will, particularly if there was a risk that that contribution would be associated directly with the rescue of the European members," Ms. Lagarde said. "I was reassured that if things go really wrong, Canada will be, as a traditional solid partner of the IMF, will be with us."

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So Mr. Martin can rest easier – Canada isn't the international pariah that some might have thought – at least according to the ever diplomatic Christine Lagarde.

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About the Author
Senior fellow at the Centre for International Governance Innovation

Kevin Carmichael is a senior fellow at the Centre for International Governance Innovation, based in Mumbai.Previously, he was Report on Business's correspondent in Washington. He has covered finance and economics for a decade, mostly as a reporter with Bloomberg News in Ottawa and Washington. A native of New Brunswick's Upper St. More

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