Prime Minister Stephen Harper said the government plans more stimulus funding for the economy next year, in a federal budget planned for March. But he also warned that rising interest rates are on the horizon, in an exclusive year-end interview with CTV News.
"There is no reason Canada can't grow somewhat faster than other developed countries," Harper told CTV News' Chief Anchor and Senior Editor Lloyd Robertson and Ottawa Bureau Chief Robert Fife.
CTV will broadcast the full interview, "A Conversation with the Prime Minister," this Saturday at 7 p.m. (check local listings).
Although the prime minister said the government is "optimistic that 2010 is going to be a year of recovery," he also cautioned that Canada's record-breaking low interest rates will come to an end.
Canadians across the country have taken advantage of those rates to buy new homes, re-igniting the real estate market. Last month, resales were up 73 per cent and prices up 19 per cent from the same time last year, according to the Canadian Real Estate Association.
"It is almost inevitable that down the road, interest rates will be higher," said Harper. "So families should budget accordingly."
Finance Minister Jim Flaherty made the same observation in an interview with CTV's Question Period, to be broadcast next Sunday. He expressed concern that Canadians were taking on too much debt.
The prime minister said his government will strive to keep breathing life into the Canadian economy -- and hinted the March budget may include a provision to continue the popular home renovation tax for another year.
"We are looking at ways to continue our stimulus; to have real impact on the economy," said Harper.
As for the country's $56-billion deficit, which has grown during the recession from stimulus spending, the prime minister said Ottawa will start to whittle it down in 2011.
Criticism and proroguing Parliament
Harper also addressed speculation that he may prorogue Parliament for the second time, as the government responds to critics over Afghan detainee abuse allegations and its handling of greenhouse gas emission targets.
If Harper did choose to shut down Parliament, it would mean the government would not reconvene until after Canada celebrates the 2010 Vancouver Olympic Games in February.
"We will bring forward a new budget in March and we're working on a new spring session now," he said. "But I haven't taken any decisions of those things in terms of timing a Throne Speech."
Opposition critics have been especially critical of the Conservatives' handling of the environment.
During the Copenhagen climate change conference this month, critics slammed Canada for failing to carry out its Kyoto obligations, and accused the government of not taking an active role in negotiations for a new agreement.
Harper and Environment Minister Jim Prentice have said Canada needs a unified plan with the United States, because the economies of the two countries are so intricately linked.
"It's not a simple matter of having moral outrage and marching in the streets," said Harper. "One has to actually develop a plan that will reduce emissions in a way that will not cause hundreds of thousands of people to lose their jobs in the middle of a recession."
He said that if Canada took stronger measures than the U.S., it could damage the manufacturing sector.
"If the Americans don't take realistic action on emissions, it's very difficult for Canada to do much," he said. "Because quite frankly, factories and economic activity will simply relocate south of the border."
