Finance Minister Jim Flaherty
Credits: REUTERS/CHRIS WATTIE
Flaherty will also join an emergency teleconference Tuesday with his G7 counterparts to respond to events that are causing havoc in the markets and sending jittery investors running for cover.
A plunge in the price of oil, a decline in factory orders in the US, a manufacturing slowdown in China, the eurozone financial crisis, dropping commodity prices and other storm clouds over Canada will likely keep Bank of Canada governor Mark Carney from raising interest rates Tuesday.
The bleak outlook follows last week's dismal job numbers in the US and the further decline in Ontario's automotive sector with GM's announcement Friday that 2,000 jobs in Oshawa, ON, could be gone by next summer.
"Canadians can rest assured that our fiscal and economic fundamentals are solid and it also puts us in the position as government, that if we needed to take steps in response to a shock from outside Canada that we are in a position to do so because we have fiscal room to move," Flaherty said.
"Our situation isn't perfect but it's better, so we are in a position to act and protect Canada, but we are part of the world and we would be buffeted as well as other countries."
The official Opposition NDP did not mention the worsening economic picture during question period Monday, nor has it raised the potential loss of union jobs in Oshawa. It was more concerned with smoke stack monitoring and a budget implementation bill it opposes.
The government injected more than $55 billion into the economy during the 2008-09 financial crisis, the worst economic downturn since the 1930s and one which many countries are still struggling to get out from under.
In its most recent budget, the government announced controversial changes to old age security, employment insurance and other measures to sustain the economy in the long run and prevent the kind of budget problems many European countries are experiencing.