p>Ottawa, December 19, 2007
2007-104
Related Document:
International Monetary Fund
2008 Article IV Consultation with Canada
Preliminary Conclusions of the IMF Mission
The report by the International Monetary Fund (IMF) Mission on Canada
acknowledges that Canada's economy has outpaced those of many of the major
industrialized countries. The report points out that Canada has solid
economic fundamentals and a "sound policy framework" that positions the
Government to weather future economic challenges.
"The IMF report confirms that we are on the right track with our
long-term economic plan, Advantage Canada," said Jim Flaherty,
Minister of Finance. "Our economic fundamentals are as strong as the
Canadian Shield due in large part to our commitment to ongoing debt
reduction, tax cuts and focused spending."
The IMF supports the Government of Canada's effort to strengthen Canada's
economic union. The report suggests that to make the strong Canadian economy
even stronger, the provinces and territories need to:
eliminate barriers to interprovincial trade in goods and services and
labour mobility;
adopt a Common Securities Regulator; and
reduce marginal effective tax rates on capital, including by
harmonizing sales taxes.
"While the IMF report overall is very positive, it highlights the fact
that we still have work to do to improve our productivity and
competitiveness," said Minister Flaherty. "Our government agrees, and in
fact is taking significant steps to meet that challenge. In the fall
Economic Statement, we committed to reducing our business tax rate to 15 per
cent by 2012, giving Canada the lowest overall tax rate on new business
investment in the Group of Seven (G7) by 2011 and the lowest statutory tax
rate in the G7 by 2012."
The IMF report goes on to say that flexible labour markets have helped
make Canada's adjustment to the volatile dollar "remarkably smooth." The
report says that "employment gains in services, construction, and mining as
well as interprovincial migration have more than offset manufacturing job
losses in the central provinces."
The IMF report also commends the Bank of Canada's actions in response to
risks in financial markets, in tandem with other central banks, to provide
liquidity to ease global financial turbulence. It also acknowledges the
Government's efforts to encourage an orderly restructuring of third-party
asset-backed commercial paper.
A copy of the IMF statement is available on the Department of Finance
website. The IMF will release its full report on Canada early next year.
___________________________________
For further information, media may contact:
Chisholm Pothier
Press Secretary
Office of the Minister of Finance
613-996-7861
David Gamble
Media Relations
Department of Finance
613-996-8080
