OTTAWA - Finance Minister Jim Flaherty is not worried about a housing collapse, saying he is happy he has helped cool the market with the latest round of stricter mortgage rules.

The finance minister says he is also encouraged Canadians are paying down their mortgages and credit cards, and taking on less debt.

The housing slowdown was a big part of the disappointing economic downturn recorded the third quarter, with the sector falling 3.5 per cent annualized.

That was caused in part because Flaherty made mortgage payments more expensive in July by dropping the maximum amortization period to 25 years, but the minister says he has no regrets.

A soft landing in housing is better than a boom followed by a bust, he says.

Overall, the country's economy advanced a snail's pace of 0.6 per cent, about half the expectation of the Bank of Canada.