Oliver Says Canada Slowdown Won’t Undermine Surplus or Prompt QE

Canadian Finance Minister Joe Oliver said the recent economic slowdown won’t undermine his government’s plans to run a surplus, or force the Bank of Canada to adopt unconventional monetary policy.

The Canadian economy will generate positive growth this year even after a rough start to 2015, Oliver told reporters in Toronto on Tuesday. That means the federal government will be on track to balance the budget, he said.

“We’re very comfortable that we will achieve a budgetary surplus this year,” Oliver said. “We’ve looked at our numbers and we’re very comfortable that we will have a surplus this year.”

Asked whether Bank of Canada Governor Stephen Poloz should implement so-called quantitative easing to revive the economy, Oliver said such measures aren’t necessary. QE uses large scale debt purchases to lower market interest rates when a central bank’s rate is about zero.

“We don’t see any need for quantitative easing in this environment,” the finance minister said. “We’ve seen 95,000 new jobs created so far this year, and we’re looking forward to a positive year of growth, so quantitative easing isn’t on the table.”

The central bank has “a fair bit of room to maneuver” if more stimulus is needed, Poloz said last week after cutting interest rates for a second time this year.