Flaherty sees 6-12 months for stimulus effect

Wed Jan 28, 2009 1:07am EST
 
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TORONTO (Reuters) - A C$40 billion ($32 billion) economic stimulus plan from the Conservative Party should start having an impact in a year or less, Finance Minister Jim Flaherty said on television hours after presenting his government's controversial budget on Tuesday.

Flaherty said on CBC's broadcast The National that he expected to see signs in six months to one year on how the government plan was working.

However, he said another budget would not be needed if the economy did not start to recover in six months. But Flaherty reiterated that the government would do whatever is necessary to protect Canadians from global recession.

"If we have to do more later we will," he told CBC.

Budget deficits -- almost a taboo in Canada -- will total C$85 billion over five years, the government estimated.

Canada has not run a deficit in more than a decade. The government predicts the plan will boost the economy by 1.4 percent this year and create 190,000 jobs by 2011.

Prime Minister Stephen Harper's minority Conservative government will need the support of at least one of the three opposition parties to remain in power.

Two parties, the New Democrats and the Bloc Quebecois, immediately rejected the plan, but the more influential Liberals were widely expected to approve it on Wednesday.

($1=$1.23 Canadian)

(Reporting by Alden Bentley; Editing by Kim Coghill)

 
<p>Finance Minister Jim Flaherty delivers his budget in the House of Commons on Parliament Hill in Ottawa January 27, 2009. REUTERS/Chris Wattie</p>