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By David Milliken and Ana Nicolaci da Costa
LONDON, April 1 (Reuters) - Canada plans to stick with major investment plans included in last week’s budget, regardless of the level of the Canadian dollar or a pick-up in short-run growth, Finance Minister Bill Morneau said on Friday.
Morneau said he was “delighted” by stronger-than-expected January gross domestic product data released on Thursday, and added that a higher oil price would benefit both Canada and the global economy.
Canada has recently struggled with a drop in the price of oil, a major Canadian export, which also helped drive the currency to its weakest level in more than a decade in January.
Asked whether volatility in the exchange rate made setting long-term economic policy difficult, Morneau said:
“The long-term decisions that we are taking are decisions that (are) right for the economy irrespective of the dollar,” he said at a Reuters Newsmaker event in London on Friday.
The Bank of Canada cut rates twice last year as plunging oil prices pushed the economy into a shallow recession, and the government last week proposed a stimulus budget to revive growth.
Morneau said many countries were facing the same sluggish growth as Canada and that his country was in a good position to use fiscal policy to help the economy, given its low level of debt to GDP.
Other countries varied in their ability to use fiscal policy for the same purpose, at a time when interest rates were already so low that monetary policy was reaching its limits.
“I think there is a consistent theme that we are all facing the same challenge of growth,” he said.
Asked whether he would stick to the same plans should growth continue to strengthen as it had in January, he said he would remain focused in the current plans.
Morneau declined to be drawn on whether Canada would prefer to see Britain vote to remain in the European Union or leave in a referendum on June 23, adding that Canada had always had strong relations with Britain.
Canada has spent more than six years negotiating a trade deal with the EU, which some supporters of Britain leaving the EU say could be a model for Britain. (Editing by Larry King)