Canada will argue for open markets at meeting of G-20 leaders: Harper

TORONTO - Canada will use its relatively good financial standing to extol the virtues of open markets and disciplined fiscal policy as world leaders look for a way for dig the global economy out of a financial hole, Prime Minister Stephen Harper said Thursday.
"I think these are ways that we can be a voice for positive change that will move us forward," Harper said of the ideas he'll float when he meets with G-20 world leaders in Washington next week.
"Canada is, I think, recognized as having entered this period with a pretty good set of policies. Nobody in the world thinks that Canada was the source of any of these problems or even a complicating factor in any of these problems."
Canada will avoid a recession by the thinnest of margins next year, according to an International Monetary Fund economic update released Thursday. The IMF said Canada's growth will average just 0.3 per cent next year.
Canada has not avoided all of the problems and pitfalls associated with the financial crisis, Harper said. But the situation here has been far more under control due to "a broad and developed system of prudential regulation that we have improved and are committed to improving further."
The G-20 finance ministers meeting this weekend in Brazil and Canada will argue for international review of strengthened domestic financial institution regulation. However a senior Canadian official suggested this week that any new regulations shouldn't impede open-market competition.
"Selective" but not "massive" improvements to economic policy are among the ideas Harper said he'll bring to his global counterparts.
Canada will push for open markets, clear monetary targets to keep inflation under control, and fiscal policy that keeps taxes down and spending manageable, all backed by a strong regulatory system. Trade and borders must be kept open to navigate the economic slump, Harper said following a roundtable discussion at an economic think-tank in Toronto.
"We do not want to start closing our borders and engaging in protectionism," Harper said. "We want to stay open to the world."
On the domestic front, Harper said economists at his meeting at the C.D. Howe Institute told him the government shouldn't necessarily shy away from deficit spending.
"One message was very clear in the meeting, and that was: Don't be afraid to run a deficit if the deficit is in the best interest of the economy," Harper said.
Harper said Canada will remain in surplus this year, but prospects for future years are uncertain given the global economic crisis.
He noted Finance Minister Jim Flaherty has said the government won't force a surplus if it's not in the economy's best interest.
17:11ET 06-11-08