TORONTO, Nov 23 (Reuters) - Finance Minister Jim Flaherty
said on Sunday that the global financial crisis may have pushed
Canada's economy into recession, the first time the
Conservative government has conceded that possibility.
"We may well be in a technical recession in the last
quarter of this year and the first quarter of next year,"
Flaherty said in an interview with CTV television.
"It's quite possible that Canada will be below the line
slightly in both of those quarters, which technically would be
a recession," he said.
Flaherty's remarks followed a speech by Bank of Canada Gov.
Mark Carney last week in which he said the risk of recession
was growing. Economists define recession as two consecutive
quarters of contraction.
The central bank is likely to cut interest rates again to
keep Canada's export-reliant economy afloat in the face of a
global recession and flagging consumer demand in the United
States, Canada's main trading partner, Carney said.
Flaherty is due to present updated fiscal and economic
projections on Thursday.
In the CTV interview, the minister said the budget would
stay balanced in the current fiscal year ending in March but a
deficit was not out of the question beyond that.
"We're planning, and I'm certainly trying, to make sure
that we can plan toward an operational surplus next year and
the year after that. The challenge will be, of course, that we
have to stimulate the economy further."
Flaherty also repeated any fresh economic stimulus would
not come in his budget update on Thursday, saying he would
consider such a package for next year's budget plan.
"We're not going to artificially balance the budget to
avoid having additional stimulus," Flaherty said. "This is an
economic problem that is global and it is serious and we all
need to take the actions in our own countries to help the world
economy recover."
(Editing by Cynthia Osterman)
(Reporting by Frank McGurty; Editing by Cynthia Osterman)
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