Joe Oliver says G20 sees ‘significant economic challenges ahead’

Canada’s finance minister is urging European countries to consider taking quick action to repair their flagging economies by following stimulus programs similar to the one that pulled this country out of recession...

Much of the focus of the G20 meeting was on the group’s so-called “2-in-5” target — a plan intended to see collective growth in gross domestic product reach 2% over the next five years, a goal that is estimated to add $2-trillion to the global economy.

So far, though, the G20 acknowledges there are many hurdles to clear.

“We are mindful of the potential for a build-up of excessive risk in financial markets, particularly in an environment of low interest rates and low asset price volatility,” the G20 said in a communique...

“We welcome the stronger economic conditions in some key economies, although growth in the global economy is uneven.”

The host minister, Autralian Treasurer Joe Hockey, told reporters in Cairns that “it is critical that we take concrete steps to boost growth and create jobs.”...

For his part, Mr. Oliver said Canada is “promoting pro-growth policies, driving demand at home, aggressively pursuing free-trade agreements, enhancing job-matching services, increasing the participation of all groups in the workforce and enhancing private-sector competition.”

He noted that Canada has free-trade agreements 43 countries, with 60% of GDP and one in five jobs “tied to trade.”

“But, as we have said many times, the global recovery is fragile and as a trading nation we are impacted by international demand for our products and services,” he said.

Mr. Oliver said Canada came out of its recession with a program “that was timely, targeted and temporary...

“Now, Europe is in a different situation today than Canada is... We have growth of a little over 2%. We have inflation at about 2.1%. We have been out of recession … since 2009.”

He added: “Europe, however, now is pretty well flat in terms of growth and their inflation rate is close to zero. They are perilously close to deflation.”

That is something that must be avoided “for the good of Europe and for the good of the world economy,” he said...

Meanwhile, Mr. Oliver said during Sunday’s conference call following the G20 meeting that he is not considering major changes to rules on government financing of mortgages, even though the threat of a major correction in the country’s still-hot real estate sector is viewed as posing a major threat to the economy...

This has been excerpted from 21 September 2014 article by the Financial Post.