"We are living in extraordinary times. We also know that panicking and making the wrong choices would be devastating for the Canadian economy and that responding to this type of global economic turbulence requires steadiness and stability and consultation. This is not a sprint." Finance Minister Jim Flaherty, Dec. 12, 2008, to business audience in Saint JohnCHRIS WATTIE
Canada's economic growth rate should be a little rosier in the remainder of this year and in 2010 after a tepid performance in the third quarter, Finance Minister Jim Flaherty said Tuesday.
Mr. Flaherty played down potential threats to the recovery, such as the Dubai debt problems and the strong Canadian dollar .
"We hope that we'll have a continuation of growth at a greater pace in [the fourth quarter] We are certainly more optimistic about economic growth in 2010," he told reporters.
Canada crawled out of recession in the third quarter after three quarters of contraction. But the 0.4-per-cent annualized growth rate fell short of market expectations for 0.7-per-cent growth and the Bank of Canada's earlier 2-per-cent forecast.
The strong Canadian dollar, which rose again Tuesday morning against the greenback, does not warrant special measures like those taken by the Japanese central bank Monday, Mr. Flaherty said.
"There are options that we have, if we chose to use them but there is no indication that we would do anything like that now," he said.
"The pressure is downward on the U.S. dollar and that has an effect on all the market currencies, like the Canadian dollar."
Amid concern Japan could slip back into recession and an economic outlook clouded by the surging yen, the Bank of Japan announced an emergency measure to pump more cash into the banking system.
The Canadian dollar has also appreciated sharply against the U.S. currency for much of this year, prompting Bank of Canada Governor Mark Carney to warn last month that the currency's rise could delay recovery and possibly warrant additional central bank steps.
The Canadian dollar lost ground following news of Dubai World's debt problems but resumed its upward climb again this week.
Canadian markets also began to breathe easier along with global markets as fears of Dubai World defaults waned. Mr. Flaherty said some Canadian banks had modest exposure to the emirate.
"Some Canadian institutions have some involvement there and some exposure there, but it appears that it is relatively modest," he said.
Mr. Flaherty will present the fourth update on the federal government's stimulus package in Winnipeg on Wednesday.
A federal source told The Canadian Press he'll show that 12,000 stimulus projects have been announced to date, and 8,000 of them are under way.
Under an agreement negotiated with the Liberals last spring, Mr. Flaherty is obliged to submit quarterly updates on how the stimulus program is working.
But the parliamentary budget officer has complained that the updates released so far are so lacking in detail and inconsistent in their format that they are not very useful.
In his last update, Mr. Flaherty said 90 per cent of the government's stimulus plan had been rolled out - a claim refuted by the Liberals.
The government expects its stimulus package to create or maintain 190,000 jobs by the end of 2010, but employment statistics to date suggest the plan is far behind schedule.
With a file from The Canadian Press