Canada will stay the course on stimulus: Flaherty

Fri Nov 20, 2009 3:26pm EST
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By Jennifer Kwan

TORONTO (Reuters) - Finance Minister Jim Flaherty on Friday vowed to resist big, new spending measures in his next budget, but said it was too early to pull stimulus away from a still shaky economy.

Flaherty used a speech in Toronto to lower any expectations that the Conservative government would either pump in new stimulus funds or, as others have suggested, shut off the tap before the scheduled deadline in March 2011.

"Today, there are some tentative signs of recovery. But even with some early positive signs, there is still little evidence of firm growth," Flaherty said.

He later told BNN television he believed the Canadian economy could not stand on its own without the help of government stimulus.

In the prepared text of the speech, Flaherty maintained the government's estimate of a record high budget deficit this year of C$56 billion ($52 billion) and a small deficit of C$5.2 billion by 2014-15.

Flaherty tried to head off the usual pre-budget demands from provincial and municipal governments as well as industry and lobby groups.

But the opposition Liberal Party, in a hint of the political battle to come, said the government lost its chance to invest in job-boosting green technologies and scientific innovation as well as to help students and the elderly by "squandering money on foolishness" before the crisis.

"We think Canada desperately needs, at this time of recession and economic fragility, investments to both create the jobs of tomorrow and allay the anxieties of many Canadians," said Liberal legislator John McCallum.   Continued...