Finance Minister Jim Flaherty speaks to journalists on Parliament Hill after a Conservative caucus meeting on July 28, 2009.CHRIS WATTIE/Reuters
Finance Minister Jim Flaherty has pledged to press ahead with his economic stimulus program in order to nurture a recovery that is in its earliest stages.
"We have to be careful. We have to continue to implement the economic action plan," Mr. Flaherty told reporters Tuesday in Ottawa. "We have to continue with the stimulus to the economy to avoid the danger of some slowness recurring."
The Finance Minister's comments reflect the resolve within the world's major economic powers to flood the world economy with government spending until a rebound from the deepest global recession since the Second World War takes firm hold.
Mr. Flaherty's comments echo those of U.S. Federal Reserve Chairman Ben Bernanke and Bank of Canada Governor Mark Carney, both of whom warned last week that the economy remains too fragile to begin to unwind the unprecedented stimulus programs enacted to avoid a repeat of the Great Depression.
Policy makers are standing resolute in order to push back against pressure in financial markets and legislatures, where some worry that the trillions spent fighting the financial crisis are bound to spark inflation and cripple governments with debt. The counterargument from people such as Mr. Flaherty and Mr. Bernanke is that they will not repeat the mistake of Japan in the 1990s, when it's generally agreed the country exacerbated a recession by withdrawing stimulus programs too soon.
Mr. Flaherty repeated that unemployment would rise even as the economy begins to grow because companies are typically slow to hire after a recession. The Finance Minister also refused to call an end to the recession, even though the Bank of Canada predicted last week that Canada's gross domestic product would expand this quarter.
"When we see the numbers for this quarter, I hope they will be positive," Mr. Flaherty said. "I think the direction is important. There are good sings that the economy has stabilized and that there the beginnings of a recovery. I wouldn't put it any stronger than that."