Feds not prepared to declare recession over: Flaherty

Canada’s economy may be showing signs of life, but federal Finance Minister Jim Flaherty isn’t yet ready to declare the recession over.

OTTAWA — Canada’s economy may be showing signs of life, but federal Finance Minister Jim Flaherty isn’t yet ready to declare the recession over.

There are signs that a recovery is taking a foothold, Flaherty told reporters Tuesday on his way into a Conservative caucus meeting, where the economy was high on the agenda.

But declaring the recession over might be premature, the minister said.

“No, I think we will have to look back as we always do and look at this quarter,” Flaherty said when asked flatly whether he agreed with the Bank of Canada’s most recent assessment of the economy.

“There are good signs that the economy has stabilized,” he said.

“There are the beginnings of a recovery, and I wouldn’t put it any stronger than that.”

The minister’s statement seemed to contradict the Bank of Canada, which effectively declared last week that the recession would end in the current quarter.

But much needs to be done to ensure that Canada’s economy doesn’t slide back into negative territory, said Flaherty.

“I think we have to be careful. We have to continue to implement the economic action plan,” he said.

“We have to continue with the stimulus to the economy to avoid the danger of some slowness reoccurring.”

Flaherty also warned that the number of Canadians receiving regular Employment Insurance benefits would likely rise in the months ahead.

Statistics Canada reported Tuesday that EI payouts hit their highest level in May since 1997.

Just over three quarters of a million Canadians, 778,700 people, received EI benefits in May, an increase of 65,600 or 9.2 per cent from the month earlier.