TORONTO (Reuters) - Canadian Finance Minister Jim Flaherty said on Sunday a sharp slowdown in the economy since the start of the year doesn’t threaten the government’s deficit plans.
“We’re seeing the growth we thought we would see overall this year. We’re on track,” he said in an interview on CTV’s Question Period. “We had very strong growth in the last quarter of last year and the first quarter of this year, more moderate growth, since then.”
Canada’s economic growth rate faltered more sharply than expected in the second quarter due to a slowdown in consumer spending and a weaker trade performance.
Flaherty said the recovery is fragile and he is particularly concerned about the weak U.S. economy, the destination for most of Canada’s exports. But he said Canada’s economic and fiscal fundamentals are in relatively better shape.
“We don’t have a situation where we can’t get to surplus. We can in the intermediate term. So I want to stay on track, make sure we stay on that track,” he said.
Canada will release an update on Monday of the government’s two-year, C$47 billion ($45.6 billion) stimulus plan. Flaherty said about 97 percent of the projects being funded by the plan are underway. But he repeated the government does not plan to extend funding for projects that run past deadline.
“The economic action plan is for a period of time. It’s public stimulus, it’s taxpayers’ money being used to create jobs and protect our economy, but it doesn’t go on forever,” he said.
Reporting by Jeffrey Hodgson; editing by Philip Barbara