Finance Minister Jim Flaherty said Wednesday his government will remain focused on eliminating its deficit by mid-decade amid increased risks to economic growth posed by U.S. and European debt woes.
"One of the strategic contributions we can make to bolster confidence and growth in Canada is to maintain our strong financial and fiscal position," he told reporters before an annual meeting with business leaders and policy experts to discuss the outlook.
He said the Conservative government would "stay on course and continue with the plan" to cut up to $4 billion a year in program spending to hit a surplus by fiscal 2014-15.
Further, he said his Group of Seven peers didn't discuss the need to introduce new fiscal stimulus measures to combat weakening economic and market conditions.
However, he added that continued market uncertainty about U.S. and European debt poses "obvious risks" for the Canadian economy.
Previously, Flaherty said he was confident the G-7 had lined up "appropriate actions" to provide financial stability. Among the measures include a G-7 pledge to take co-ordinated steps, if necessary, to provide liquidity to make sure markets operated properly; purchases of Italian and Spanish bonds by the European Central Bank to dampen rising bond yields in Europe; and a commitment from eurozone giants Germany and France to implement measures agreed to at a July 21 summit.
Flaherty is the longest-serving G-7 finance minister. Unlike most of his industrialized peers, the Canadian economy had posted relatively robust growth -- up until hitting a recent soft patch in the second quarter. Canada has also benefited from its abundant natural resources, sound banking system and relatively sterling public balance sheet.
He added that developed countries need to live up to the obligations made at last year's Group of 20 meeting in Toronto to reduce their deficit and debt loads.
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