OTTAWA (Reuters) - Canada has no plans to rescue hard-pressed media organizations and sees dangers in governments taking equity stakes in banks such as Citigroup, Finance Minister Jim Flaherty said on Friday.
The minister was speaking in a series of television interviews in which he stressed the need for Parliament to quickly pass his stimulus package and said money could start flowing in April.
Speaking after the U.S. government said it would take a large stake in Citigroup, he told BNN television: ”It does have implications, certainly down the road, when we start looking at exit plans. We are going to recover from this. The world economy will recover, the Canadian economy will recover. We did in the early ‘80s and ‘90s.
“But we’ll be in a situation where some of the large banks in the world are going to be partially or wholly owned by governments, and that might give them a competitive advantage over some of our Canadian banks. That’s why we’ve taken some steps already to try to level that competitive disadvantage.”
As an example of Canadian help, he pointed to federal guarantees of Canadian banks’ wholesale lending, which he said had not yet been used, and noted that the government has also bought a lot of insured mortgages, providing banks with more capital.
“I‘m going to make sure we protect our financial institutions in a systemic sense in Canada,” he said.
Canada is also helping to bail out the auto industry, which is necessary to help preserve the Canadian share of this large industry, he said. But he said he did not plan to provide packages for other industries.
“We don’t plan to get into the business of subsidizing media,” Flaherty said when asked if the government might give more help to the publicly owned Canadian Broadcasting Corp or to hard-pressed private-sector media companies such as Canwest Global Communications Corp, the country’s biggest media firm.
Canwest has a C$3.7 billion ($2.9 billion) debt load and analysts have said it might have to file for bankruptcy protection.
Asked whether he might tide Canwest over, he told the CBC: “I haven’t heard from them. I’d certainly listen to them. But, no, we don’t have plans to create packages for various industries in Canada that are going to suffer during the recession.”
He told CTV Television that Monday’s release of Canadian gross domestic product data for the fourth quarter would show a sharp drop.
Reporting by Randall Palmer; Editing by Peter Galloway