Harper cautious on growth, says basics strong

Fri Jan 25, 2008 5:01pm EST
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OTTAWA (Reuters) - Canadians should not be complacent about economic growth, particularly as financial market volatility may last for some time, Prime Minister Stephen Harper said on Friday.

Harper said the economy's fundamentals are strong, with unemployment at its lowest in three decades, federal taxes heading to their lowest level in four decades, debt falling, interest and inflation rates low, and household income rising strongly.

"But we cannot be complacent about the continued growth of our economy. Recent volatility in financial markets, mostly emanating from the United States, may be with us for some time to come," he said in a speech in Ottawa, marking a little more than two years since the minority Conservative government was elected.

"Good jobs are threatened in some of our traditional industries. And cost pressures in some parts of the country are straining the budgets of working families. We're aware of these challenges," the prepared text of his speech said.

The prime minister said the government had acted and would continue to act to help regions and sectors in trouble, such as manufacturing, forestry, fishing and tourism. He said the government would also continue to strengthen agriculture.

Harper said the opposition would like to make Canadians think they can spend their way out of any slowdown, but what was needed in times of economic uncertainty was "strong, certain, steady leadership."

"My friends, their reckless spending would, in one budget, push the country back into deficit, adding to the federal debt and putting upward pressure on interest rates."

(Reporting by Randall Palmer; Editing by Peter Galloway)

<p>Canada's Prime Minister Stephen Harper pauses while delivering a speech during an event marking the second anniversary of Harper's minority Conservative government, in Ottawa January 25, 2008. REUTERS/Chris Wattie</p>