January 8, 2009 / 11:07 AM / 9 years ago

Harper less gloomy on economic crisis

OTTAWA (Reuters) - Prime Minister Stephen Harper was less gloomy about the economy in an interview released on Thursday, saying Canada was in a strong economic position compared with others and should be able to exit the recession relatively quickly.

<p>Prime Minister Stephen Harper speaks to the media in Toronto, December 20, 2008. REUTERS/Mark Blinch</p>

The comments to Maclean’s magazine were noticeably more cheerful than those he made in an interview in mid-December, when he said he was very worried about the economy and speculated about the possibility of a depression.

Harper, who as recently as mid-October said he had a plan to avoid recession, now concedes there is no chance Canada can escape the global economic crisis. Ottawa has already made clear it will run budget deficits for the next few years.

The minority Conservative government will unveil a budget on January 27 and Harper has said it will include a stimulus plan that could be worth as much as $30 billion.

“The underlying reality is that Canada enters this recession in a pretty strong position compared to most western industrialized countries,” he told Maclean‘s.

“We’re entering the recession later. All the indications are that it will not be as deep here and we should be able to come out of it sooner,” he said.

Harper needs the support of at least one other political party to pass the budget. The official opposition Liberals -- angry at what they say is his mishandling of the crisis -- signed a deal with two other parties last month to bring down the government.

Harper escaped defeat by having Parliament suspended until late January and then promised the budget would include the type of major stimulus measures opposition parties were demanding.

The Liberals have since softened their attacks and few political observers think Harper will lose power over the budget. Harper -- who won a strengthened grip on power in an election last October -- said he did not want to go to the polls again.

“My strong preference is to govern and I think to go through several more months of election, of a new government being formed, all the things that that takes, all the delays, would serve no useful purpose to the economy right now,” he told Maclean‘s.

The government, which has run budget surpluses for more than a decade, is promising any stimulus measures will be as short-lived as possible.

Harper said he was very wary of launching initiatives that could lead to protracted budget deficits.

“Obviously the risk the government faces is that this becomes an excuse for permanent long-term spending that is in fact not simulative, it’s just simply big government that becomes a burden on the economy,” he said.

Reporting by David Ljunggren; Editing by Peter Cooney

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