Recession a 'relatively mild' challenge for Canada: Flaherty

Finance Minister Jim Flaherty, speaking in London, England, on Friday, said this is "a mild economic recession."(Matt Dunham/Associated Press)

Finance Minister Jim Flaherty said Friday the country is in a mild recession and that Canada will come out of it strongly.

Flaherty delivered his upbeat message in London, England, to a meeting of the Canada-U.K. Chamber of Commerce.

"Relatively speaking, this is a mild economic recession," Flaherty said.

"These are relatively mild challenges for us," he said, comparing the economic situation to the challenges early immigrants faced in taking transatlantic voyages and arriving in Canada with nothing.

He said the governments of Canada and the provinces are in strong fiscal positions, "having run surpluses for a time."

"We are able to withstand this. We are taking the necessary steps so that Canada, in a monetary and fiscal policy sense, will accelerate out of this recession as we move forward."

Separately, Prime Minister Stephen Harper said more big job losses are expected.

"We all know that we have a massive and growing employment problem," he said.

"We've seen dramatic drops in output, dramatic rises in unemployment in the last four months," Harper said on the Business News Network. "We anticipate more big job losses."

However, the prime minister echoed Flaherty's comments in that he sees the country in line for a strong recovery.

Earlier this week, Bank of Canada governor Mark Carney told an audience in Yellowknife that growth may not return until 2010. He said Wednesday that Canada's economic contraction in the first quarter of 2009 now appears likely to be the worst on record since 1961.

Canada's economy contracted at an annualized rate of 3.4 per cent in the fourth quarter of 2008, and some private sector economists are projecting a first-quarter contraction at annualized rates ranging up to almost six per cent.