Finance Minister Jim Flaherty maintains the Conservative government isn't considering any drastic new measures to insulate the Canadian economy from global turmoil and will only alter its fiscal plan if the world slips back into recession.
North American markets tumbled on Tuesday -- with the Canadian dollar and the Toronto Stock Exchange's benchmark index both retreating sharply -- amid fears of a Greek debt default and a broader eurozone financial crisis.
The minister said Canada will stay the course on an economic strategy that includes modest fiscal measures, such as tax credits to spur the economy, rather than initiate billions of dollars in new stimulus spending called for by opposition parties.
It would take another global recession for the Conservative government to dramatically overhaul its economic strategy and adjust its current target for eliminating the deficit by 2014-15, he said.
"If we had some sort of world recession, obviously, then that would change the picture dramatically."
However, Flaherty said he's confident in private-sector projections that Canada will experience modest economic growth over the next few years.
But he again called on European countries to get their fiscal houses in order and also said he's concerned about provinces that are facing mounting deficits and debt. The euro-zone situation has shown that ratcheting up spending and running deficits will hurt, not help, the Canadian economy, he argued.
Although markets recoiled Tuesday, Flaherty said the G20 is not preparing emergency measures to stabilize markets and economies.
But opposition parties insist the government is flat-footed in reacting to the changing economic times. The tax measures being adopted by the government in its new legislation were announced long before the eurozone debt crisis threatened to cripple the global economy.
The Harper government introduced omnibus legislation Tuesday that provides small businesses with a temporary tax credit, among other measures.
Under the one-year initiative, the government will cover some of the costs of small companies' EI premiums for workers.
To defray the cost of hiring, a small business will be given a one-time credit of up to $1,000 against the employer's increase in its 2011 premiums over those paid in 2010.
The initiative is designed to encourage businesses to hire new employees. The Tories said the new tax credit would be available to about 525,000 small employers -- those with fewer than 25 employees -- whose EI premiums were at or below $10,000 in 2010.
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