Finance Minister Flaherty Says Canada Has Recouped Recession Losses, Jobs

Canadian Finance Minister Jim Flaherty today said his government will cut the country’s net- debt ratio with a “clear-cut” exit strategy to return the budget back to balance.

The country will end its temporary stimulus in March, implement targeted measures to limit program spending and review government administration and overhead costs to identify possible savings, Flaherty said in a speech in Orillia, Ontario.

“This three-point plan will place our net-debt ratio on a clear downward track when the debt burdens of other nations are expected to escalate even higher,” he said.

Canada’s growth of 3.5 percent this year will lead the U.S., the euro zone and Japan on consumer and government spending, the Bank of Canada said July 22. The annual growth rate probably slowed to 3 percent in the second quarter from a decade-high pace of 6.1 percent in the January-March period, when low mortgage rates and temporary tax credits sparked spending, the bank said.

Flaherty also said his country has recovered the economic losses from last year’s recession.

“Canada has virtually recouped a recession’s worth of economic decline and, with more than 400,000 jobs created since July 2009, virtually all of the jobs lost during the downturn,” Flaherty said.

Employment fell by 9,300 jobs in July, the first decline this year, following a 93,200 increase in June, Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg predicted 12,500 new jobs, according to the median of 22 estimates.

The Canadian currency, nicknamed the loonie, declined as much as 0.9 percent, the most in three weeks, and was down 0.8 percent to C$1.0253 per U.S. dollar at 10:40 a.m. in Toronto, from C$1.0168 yesterday, when it touched C$1.0108, the strongest since May 4. One Canadian dollar purchases 97.53 U.S. cents.

Flaherty also said the government’s stimulus plan added almost 2 percentage points on average to growth in the last three quarters of 2009.

To contact the reporter on this story: Sean B. Pasternak in Orillia at spasternak@bloomberg.net; Alexandre Deslongchamps in Ottawa at adeslongcham@bloomberg.net.

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