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TORONTO — Canada's finance minister said Friday that the country's economic recovery will likely be modest and job losses will mount into 2010 even after growth has begun.
Jim Flaherty gave his most recent, sobering assessment of economic prospects in a conference call from Chile, after a meeting with finance ministers from the Americas.
Responding to surprisingly high job losses reported in the United States earlier this week, Flaherty said all of his colleagues are concerned with the toll the recession is taking on workers. He warned that while the economy may be stabilizing, labor markets are not.
"We'll start to see stabilization, which we are seeing now, and then a return to economic growth but continuing deterioration in employment," he said.
On Thursday, the U.S. Labor Department reported that payrolls fell by 467,000 in June — about 100,000 more than expected — raising concerns that the recession could persist longer than anticipated.
In Canada, economists expect about 30,000 job losses for June. Since October, Canada has lost 363,000 jobs.
In the past, the finance minister has cautioned that difficult times remain for Canadians, but he has also expressed confidence that Canada would lead most industrialized countries in the swiftness and strength of the recovery.
In Friday's assessment, he appeared more circumspect, saying there was agreement among finance ministers that the rebound would be tepid.
"The anticipation is that the recovery will be modest, so that we'll experience some continuing increase in unemployment, but as we move into 2010, we'll start to see modest recovery," he said.
Canada's unemployment rate rose to 8.4 percent in May, the highest level in 11 years.
Most of the job losses have occurred in manufacturing in central Canada. More than 70 percent of Canada's exports go to the United States.
The country has avoided bank bailouts and has not experienced the failure of any major financial institution. There has been no crippling mortgage meltdown or banking crisis north of the border where the financial sector is dominated by five large banks.
But the global sell-off of commodities hurt Canada last fall. The recent run-up of commodity prices is helping western Canada, a resource-rich economy dependent on oil and other commodity prices.
The Canadian government has committed 22.7 billion Canadian dollars ($19.5 billion) in stimulus funds earmarked for this year.
Prime Minister Stephen Harper has said Canada's deficit of CA$50.2 billion ($43.2 billion) is significant, but more manageable than other countries.
Canada's central bank has warned that the 20 percent surge in the value of the Canadian dollar since March threatens the country's economic recovery.
(cn-cp)
