VANCOUVER — Canada’s financial system and its response to the recession should serve as models for the rest of the world, Finance Minister Jim Flaherty said Sunday, offering a glowing assessment of his government’s handling of the global economic crisis.
Flaherty, in a speech delivered in Vancouver, acknowledged there is still work to be done to ensure Canada recovers from the recession and avoids slipping back into trouble.
But he said Canada’s response so far has shown it is a “world leader in sound financial regulation.”
“We put forward our system as an example for others to follow, while not ignoring the need to make certain improvements here at home,” Flaherty told a conference on fiscal policy.
“All countries must take a critical look at their own systems and do what it takes to prevent another financial meltdown. But the Canadian system clearly works, and works well.”
In a familiar refrain, Flaherty said that Canada’s banks have avoided the collapses and massive financial bailouts seen elsewhere, particularly in the United States, and have been able to build equity in spite of the recession.
He lauded the Conservative government’s stimulus program, including infrastructure spending and tax cuts, and endorsed Ontario and B.C.’s plans to harmonize their provincial sales taxes with the GST.
And he noted Canada’s participation in several international efforts on financial reform, such as the country’s role in co-chairing a G20 working group on financial regulation.
“Measures like this are necessary and useful responses to the global financial crisis and recession,” he said in the speech.
Earlier this month, Flaherty said the deficit for the current fiscal year will total $50.2 billion. The federal government plans on running deficits for at least the next four years.
But the finance minister may soon have reason to boast.
Gross domestic product data for June and the second quarter were set to be released on Monday, and economists have predicted they will show growth for the first time in 10 months — signalling the recession, at least technically, likely ended in June.
Still, Flaherty acknowledged the work isn’t finished yet, listing off several changes still to come that he suggested will strengthen Canada’s financial footing.
He said the Bank of Canada will be asked to look for ways to implement monetary policy to ensure financial stability, and he said his government continues to work towards a national securities regulator.
“This might be the part of the speech where I say, ’If it ain’t broke, don’t fix it,”’ said Flaherty’s speech.
“While we have led the way internationally, our system is not perfect.”