Finance minister says Canada headed for rough times

Fri Oct 24, 2008 3:54pm EDT
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By Frank Pingue

NIAGARA FALLS, Ontario (Reuters) - Canadians are headed for tough economic times but the country is better able to withstand them than most others in the West, Finance Minister Jim Flaherty said on Friday.

"We're in for rough times. These are difficult times. Canadians should not underestimate what we're facing. We're not an island. We're a trading nation," the newly reelected Conservative minister told a news conference.

"The point is Canada's better positioned to endure the difficult times than other western industrialized countries."

He insisted that the government would be able to maintain a modest budget surplus for the fiscal year that ends next March 31. Ottawa ran a C$1.75 billion ($1.38 billion) deficit in August but still had a C$1.16 billion surplus for the April to August period.

Yet Flaherty appeared to leave the door open to possible deficits to stimulate the economy in the future, saying Canada had been paying down debt and reducing taxes.

"We have more tools available for us in terms of addressing the need for further economic measures if that's what's required," he said.

"You contrast that with some other countries that are running large deficits, and that in order to take further steps they have to add further burdens on taxpayers ultimately by increasing deficits."

Flaherty has promised to present the annual autumn fiscal and economic update by the end of November, in which he will make clearer his view for the 2009-10 fiscal year.   Continued...