March 10, 2009 / 4:39 PM / 8 years ago

Canada says will spend bulk of stimulus fast

4 Min Read

<p>Prime Minister Stephen Harper speaks during Question Period in the House of Commons on Parliament Hill in Ottawa March 3, 2009.Chris Wattie</p>

OTTAWA (Reuters) - Canada will start pouring C$20 billion ($16 billion) of stimulus spending into the economy on April 1 as part of its plan to fight off the global financial crisis, Prime Minister Stephen Harper said in an upbeat speech on Tuesday.

Harper, whose minority Conservative government plans to spend C$40 billion in stimulus over the next two fiscal years, said his officials have slashed red tape to ensure the money can be spent quickly.

"As a result, by April 1, the government will be able to start pumping C$20 billion directly into the economy, representing close to 90 percent of the stimulus for this fiscal year," he said in a speech in Brampton, Ontario.

Harper said the government would make most of the stimulus funding available on April 1, and said the rest would be available within five months.

The spending will rack up C$64 billion in federal government budget deficits over the next two fiscal years. Harper repeated his line that the deficits would be temporary.

The prime minister, criticized for mishandling the economic downturn, said the government's actions would ensure that Canada emerges from the crisis in the best position of any advanced nation.

"We will not turn the corner on this global recession until the American financial sector is fixed," he said.

"Canada was the last advanced country to fall into this recession. We will make sure its effects here are the least severe and we will come out of this faster than anyone and stronger than ever."

Michael Ignatieff, leader of the official opposition Liberal Party, said Harper has consistently underestimated the gravity of the crisis and was not telling the full truth about how serious the situation is.

"He was on a certain Conservative planet ... I don't want him to tell stories to Canadians. They are in trouble and they have the right to the truth about the situation, even if it is cruel," he told reporters.

Harper highlighted what he said were Canada's strengths -- a stable financial system, healthy banks, an educated work force and commodity reserves -- and said the nation "should avoid both significant deflation and renewed inflation".

He said that, despite the deficit spending, Canada would stick to its longer-term economic objectives, which include continuing to cut taxes.

"We are also committed to principles-based, prudent regulation of the private financial sector ... In the best Canadian tradition, we are committed to avoiding extremes in this area," he said.

Harper also warned opposition parties not to impede the passage of the budget bill, which was unveiled in late January and is now moving through the Liberal-dominated Senate.

The minority Conservative government needs the support of opposition parties in both chambers of Parliament to pass the measures.

"We cannot have the opposition in Parliament replacing bureaucratic red tape with political red tape. I must admit I have been very frustrated with the opposition since the election," he said.

Ignatieff dismissed the charges, saying the Liberals have no intention of blocking the budget.

($1=$1.28 Canadian)

Reporting by David Ljunggren; Editing by Peter Galloway

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