Both fiscal discipline and progress towards growth are possible, Canadian Finance Minister Jim Flaherty said on Friday, urging his G20 colleagues to keep a tight rein on their budgets despite sluggish economies.
Too often the debate within the Group of 20 leading economies "has led to a false dichotomy between fiscal discipline and a pro-growth agenda," the minister said in the prepared text of his remarks at a G20 working dinner.
"While sound, medium-term plans to balance our budgets must be in place, this does not preclude us from also taking actions to promote jobs and growth, and position our countries for long-term prosperity."
He highlighted Canada's plan to balance its budget over the medium term, and said the ratio of federal debt to gross domestic product was projected to resume its downward track.
The minister pointed to the G20's structural reform commitments to increase labor market flexibility, undergo regulatory reform and liberalize trade, and urged the group not to backtrack.
Flaherty also voiced concern over rhetoric about currency wars: "I am concerned with the escalation of 'currency war' rhetoric, which ... is contributing to the uncertainty that is holding back stronger growth," he said.
"We must send a signal by being unequivocal and united in our support for market-determined exchange rates and our opposition to protectionism."