By Nirmala Menon
OTTAWA--Canadian Finance Minister Jim Flaherty warned Wednesday that
the country can be thrown "off course" by headwinds from a global
economy that remains "stubbornly fragile."
Speaking with reporters ahead of his annual summer retreat with a
group of chief executives and academics, Mr. Flaherty said the global
economy is facing a period of slow growth amid the euro-zone debt
crisis and fiscal woes facing the U.S.
Still, he said the Canadian government is on track to balance the
federal budget within two years and the strong Canadian dollar partly
reflects the country's economic and fiscal fundamentals. The Canadian
dollar is trading above par with the U.S. dollar, and Mr. Flaherty
suggested he isn't too concerned. He said the currency hasn't seen the
"difficult, rapid" fluctuations that make it difficult for businesses
to plan. Although a strong currency hurts exporters, Mr. Flaherty said
it makes it cheaper for businesses to purchase machinery and equipment
to boost productivity.
Mr. Flaherty also said the Canadian housing market has seen some
moderation which he described as a "good thing."
He reiterated that Canada won't contribute to the International
Monetary Fund to help bail out euro-zone economies that are in crisis.
He said Europe has enough resources to deal with the problem. Mr.
Flaherty said European policymakers have taken "some steps" since the
G-20 Summit in Los Cabos, but that the steps weren't enough. He said
they have to take "overwhelming, concerted" action to take control of
the situation."
Write to Nirmala Menon at nirmala.menon@dowjones.com
(END) Dow Jones Newswires
August 15, 2012 11:34 ET (15:34 GMT)
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