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(CEP News) - Canada is not immune for the financial crisis but is still on track to maintain a surplus, said Canadian Finance Minister Jim Flaherty on Friday evening at the G7 meeting in Washington, D.C. Flaherty called the G7 meeting "historic" and supported a proposal to review the global financial system.
Flaherty said the G7 meeting was the most frank and direct discussion he's seen, calling the five-point joint-action plan "a clear plan of action." The joint statement agreed that the current situation "calls for urgent and exceptional action." The five directives are aimed at stabilizing financial markets and restoring the flow of credit to support economic growth. The ministers vowed to use "all available tools" to help banks gain access to liquidity. On Friday morning, Flaherty announced the Canadian government would buy up to $25 billion in insured mortgage pools in an effort to maintain the availability of longer-term credit. Later on Friday, Flaherty said he was satisfied with the steps taken by the Canadian government so far, and he doesn't foresee the need to implement new measures. "This action will help Canadian institutions raise longer-term funds and make this credit available to consumers, home buyers and businesses in Canada," he said. The ongoing global financial crisis is making it increasingly difficult for Canadian banks to raise long-term funding, and that is beginning to affect the availability of mortgage loans and other types of credit, Flaherty explained. While he insisted Canadian banks are sound and in no danger of failing, he said the government wants to act proactively to head off any problems in the future. "This is going to make loans and mortgages more available and more affordable for ordinary Canadians and businesses," Flaherty said. By Patrick McGee,
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, with contributions by Sean McKibbon,
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, edited by Nancy Girgis,
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