At what resembled old-fashion pep rally, Microsoft Canada president Frank Clegg told a packed audience of Canadian business leaders that, although there is much work to be done, the economic direction of Canada is on the right track.

“I believe that Canada’s fundamentals have never been stronger and that we have broken the back of the recession,” he told the Canadian Club of Toronto audience yesterday.

His view of a brighter future is based on what he called landmark improvements in three key areas: fiscal, economic and the strength of the Canadian workforce. He cited a reduction in the federal tax burden, reduction of foreign debt and the fact that Canada is the only G-7 nation not likely to have a deficit this year as positive economic indicators.

Canadians tend to see themselves as economically inferior to their southern brethren. But Clegg repeatedly pitted Canadian statistics against those of the U.S. to show that Canadians not only are equals but, in many cases, surpass the Americans.

“After lagging the U.S. in software and hardware spending through the economic boom of 1993 to 2000, software development in Canada is up 15 per cent year over year, while in the U.S. it has risen by just one per cent,” he said.

He also cited statistics, which show Canadian 15 year-old students to be superior in both math and reading skills to their American counterparts.

But the sense Canada lags behind the Americans is held by the group with the most influence, he said.

“Oddly enough, it isn’t the so-called uninformed public who hold this view, it is people like us in this very room,” he said. A recent Compas poll found that only 29 per cent of top-echelon, Canadian business executives thought the economy was in good shape versus 64 per cent the year before.

While he called on the business leaders to “create a culture of innovation” and to not fear failure, others were not sure the tasks will be easy as a motivational pep talk.

Michael O’Neil, IDC Canada’s country manager and U.S. emigrant, said at first he could not understand why Canada was not the wealthiest country in the world. Given its physical and intellectual, he said Canada should be at the top, but then he realized, “the level of political leadership in this country is abysmal.” He then went on to cite the triumvirate of Prime Minister Jean Chretien, Ontario Premier Mike Harris and Toronto Mayor Mel Lastman as examples of this lack of leadership.

Canada’s business leaders are not that much better, he added.

Microsoft Canada Co. in Mississauga, Ont., is at