Harper says Canada ready to take more steps to help markets

Fri Oct 10, 2008 1:42pm EDT
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By David Ljunggren

BRANTFORD, Ontario (Reuters) - Prime Minister Stephen Harper, who opponents say is botching efforts to deal with the global financial crisis ahead of Canada's October 14 election, announced on Friday measures to loosen credit and said Ottawa would take more steps to aid markets.

The government plans to buy up to C$25 billion ($21 billion) of mortgage securities to help loosen credit conditions during a meltdown that Harper said was unfolding beyond Canada's control.

Harper -- who has repeatedly insisted the Canadian economy's fundamentals are sound -- said the move is not a bank bailout like Washington's plan to buy $700 billion in toxic assets.

"This is a market transaction that will cost the government nothing ... we are simply exchanging assets that we already hold the insurance on and the reason we are doing this is to get out in front," he told reporters in Brantford, Ontario.

"We have a range of measures that we can take, that we have been taking, and we will continue to take," he said, declining to give further details.

Polls show Harper's Conservatives are likely to retain power but may not be able to turn their parliamentary minority into a majority.

Stephane Dion, leader of the official opposition Liberal Party, said the mortgage plan was deeply cynical.

"Many Canadians will believe that the Conservatives are playing partisan politics with their mortgages and savings in the dying days of a federal election," he said.   Continued...

<p>Conservative leader and Canada's Prime Minister Stephen Harper delivers a statement to journalists in Winnipeg, Manitoba October 9, 2008. Canadians will head to the polls in a federal election October 14. REUTERS/Chris Wattie</p>