Government will take all measures to combat crisis: PM

Thu Nov 20, 2008 11:40am EST
 
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OTTAWA (Reuters) - The Canadian government will take whatever fiscal and monetary measures are needed to combat the global financial crisis, Prime Minister Stephen Harper told Parliament on Thursday.

Harper, predicting that Canada would suffer further from the U.S. slowdown, also said Ottawa would not balance the budget by raising taxes or cutting essential services in a time of upheaval.

"World governments have resolved that they will undertake whatever financial, monetary and budgetary measures are necessary to cope with the crisis, and let me be clear -- this is also the position of the government of Canada," he said in a speech to Parliament.

The government has made it increasingly clear in recent weeks that it is likely to run a budget deficit in the 2009-10 fiscal year, which begins April 1, and quite possibly beyond that.

"Balancing the budget by raising taxes, by cutting essential government activity or by refusing necessary intervention in the midst of a global economic crisis would be a cure worse than the disease," said Harper.

He also repeated pledges to give more targeted aid to the mining, forestry and agriculture sectors.

(Reporting by David Ljunggren; editing by Rob Wilson)