Canada sees big job losses, need for more credit

Fri Jan 9, 2009 11:26am EST
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By Scott Anderson

TORONTO (Reuters) - Finance Minister Jim Flaherty warned on Friday of significant Canadian job losses in 2009 and said he was not ruling anything out as he prepares a stimulus package for a budget that he said would run a large deficit.

"We're in for a very difficult year," the Conservative government minister said. "We are going to have substantial job losses. We need to respond to the needs of people who will lose their jobs this year."

In addition to preparing his January 27 budget, Flaherty is also trying to help get credit moving again and said a working group of government agencies was meeting with Canada's big banks on Friday to improve credit access, particularly where there are gaps.

"We hope that the private sector will work well with us to fill those credit gaps in Canada this year," he said.

"We're prepared to work with the banks to do whatever we have to do to increase the availability of credit in Canada, including car credit."

The agencies in the working group include Export Development Canada, the Business Development Bank, Farm Credit Canada and Canada Mortgage and Housing Corp.

"There is a recognition that we have a synchronized global recession," Flaherty. "We are in uncharted waters. There's a high degree of uncertainty. Fortunately in Canada we have one of the strongest financial systems, if not the strongest, in the world."

Flaherty reiterated that his budget would run a substantial deficit, ending 12 years of surpluses.   Continued...

<p>Canadian Finance Minister Jim Flaherty gestures as he speaks with the media in Montreal, January 6, 2009. REUTERS/Christinne Muschi</p>