Harper unveils new cabinet, focuses on economy

Thu Oct 30, 2008 2:42pm EDT
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By David Ljunggren and Randall Palmer

OTTAWA (Reuters) - Canadian Prime Minister Stephen Harper unveiled a new cabinet on Thursday and vowed to defend Canada against a global crisis that he said was making it harder to predict the nation's economic future.

Finance Minister Jim Flaherty, who has become the face of Canada's effort to fend off the growing financial turmoil, stayed in his post as expected. He is due to attend a series of international meetings in the next few weeks on the crisis that is striking Canada with increasing severity.

"The economy ... will be job Number One in every aspect of our government," Harper told a news conference.

Harper added several junior ministers to the cabinet, with almost a third of all the jobs going to women. He made the changes after the ruling Conservatives retained power in the October 14 election with a strengthened minority.

During the election campaign, both Harper and Flaherty promised not to run a deficit over the next four years, but they have since quickly changed their tune.

Harper said Ottawa was on track to record a small surplus this year but he declined to say what would happen after that, citing what he said was increased uncertainty in the Canadian and world economies.

"We will not be making any economic predictions in the near future ... We've put a high value on keeping the budget balanced but the truth of the matter is we're less certain about the future than we were even a few weeks ago," he said.

Some leading economists say the government will definitely go into the red next year, possibly as much as C$10 billion ($8.2 billion), as corporate tax revenues plunge.   Continued...

<p>Canada's Prime Minister Stephen Harper speaks during a news conference in the foyer of the House of Commons on Parliament Hill in Ottawa October 30, 2008. REUTERS/Blair Gable</p>