Canada mulls stimulus 'exit strategy'

September 23, 2009 09:27:47 AM

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G20 nations must maintain stimulus measures until a private sector recovery firms, but leaders should also start discussing an "exit strategy" at upcoming talks, Canadian officials said Monday.

"Although the global economy is showing some signs of recovery, this recovery remains fragile," Dimitri Soudas, the Canadian prime minister's spokesman, told a briefing.

"Canada and other G20 nations must remain committed to stimulus measures, improved financial regulations, fixing or further fixing financial institutions, and the pursuit of free trade and combating protectionism."

That said, it is also "important for G20 leaders to begin discussing an exit strategy," he added.

Canadian Prime Minister Stephen Harper will join other leaders of the Group of 20 industrialized and leading emerging economies for talks in Pittsburgh on September 24-25.

Canada's government "intends to stay the course" and continue its increased spending to stimulate its economy through to the end of March 2011, Soudas said.

"The job will be finished when we actually start seeing a tangible recovery, when we start seeing growth in the economy for more than one quarter... and ultimately creation of jobs."

Thereafter, if a recovery has taken root, Ottawa aims to gradually end its stimulus measures, and "over a relative period of time through disciplined and limited growth of federal spending, return to (budget) surplus territory."

Prior to the G20 summit, Harper will go to New York on Tuesday to attend a dinner hosted by UN Secretary General Ban Ki-moon to discuss climate change.

The dinner is to bring together major polluters ahead of the next major UN climate change talks in Copenhagen in December.

Harper and US President Barack Obama when they met last week in Washington reiterated their preference for a coordinated North American strategy to combat global warming. The two leaders will hold another bilateral meeting at the G20 summit on restructuring the international financial system.

Harper will also meet with New York City mayor Michael Bloomberg prior to the G20 summit to discuss energy issues.

New York state is the number one importer of Canadian natural gas and electricity, totaling 6.8 billion dollars and 925 million dollars respectively per year, the Canadian government said.

Thursday, Harper will attend a meeting of Friends of a Democratic Pakistan in New York.