UPDATE 1-Canada to boost investment regardless of currency, growth

Fri Apr 1, 2016 6:39am EDT
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(Adds material from Q&A)

By David Milliken and Ana Nicolaci da Costa

LONDON, April 1 (Reuters) - Canada plans to stick with major investment plans included in last week's budget, regardless of the level of the Canadian dollar or a pick-up in short-run growth, Finance Minister Bill Morneau said on Friday.

Morneau said he was "delighted" by stronger-than-expected January gross domestic product data released on Thursday, and added that a higher oil price would benefit both Canada and the global economy.

Canada has recently struggled with a drop in the price of oil, a major Canadian export, which also helped drive the currency to its weakest level in more than a decade in January.

Asked whether volatility in the exchange rate made setting long-term economic policy difficult, Morneau said:

"The long-term decisions that we are taking are decisions that (are) right for the economy irrespective of the dollar," he said at a Reuters Newsmaker event in London on Friday.

The Bank of Canada cut rates twice last year as plunging oil prices pushed the economy into a shallow recession, and the government last week proposed a stimulus budget to revive growth.

Morneau said many countries were facing the same sluggish growth as Canada and that his country was in a good position to use fiscal policy to help the economy, given its low level of debt to GDP.   Continued...