Government spending is fading fast, and it's now time for businesses to step up to create jobs and invest, says Finance Minister Jim Flaherty.
"We need now the engine to be the private sector," he told reporters in Toronto on Tuesday. "Corporations in Canada, generally speaking, are flush with cash. We need them to invest - invest in machinery and invest in hiring - to help the economy grow."
The minister spoke shortly after meeting with private-sector economists over whether he should change the government's forecasts. They agreed the forecast hasn't changed since their last discussion in March. Mr. Flaherty's budget - originally released in March and to be re-tabled June 6 - pegs Canada's economic growth at 2.9 per cent this year.
Recent investments in machinery and equipment are encouraging, and should continue, he said.
"This is the time when we really need the private sector to step up to the plate in Canada and invest and grow," he said. "Governments, as you know, are backing off our stimulus that we brought in over the course of the great recession, and so it's very important that as that stimulus is withdrawn, that it is replaced by the private-sector stimulus."
Consumer spending has slowed markedly this year, weighing on growth. Some evidence that consumers are starting to pay down debt is "desirable," Mr. Flaherty said, as Canadians shouldn't be taking on more debt than they can handle, especially as interest rates rise.
Chief risks facing the global and Canadian economy include European debt woes, the U.S. deficit and Canada's still-elevated jobless rate, he said.Report Typo/Error