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Private sector should be responsible for stimulating economy, Flaherty says

By: Alexandra Posadzki, The Canadian Press

Posted: 08/27/2012 6:06 PM | Comments: 0 | Last Modified: 08/28/2012 5:16 AM

Minister of Finance Jim Flaherty is shown at a press conference at the National Press Theatre in Ottawa on Thursday, June 21, 2012. Flaherty says stimulating the economy ultimately falls on the heads of the private sector. THE CANADIAN PRESS/Sean Kilpatrick

TORONTO - Stimulating the economy ultimately falls on the heads of the private sector, Finance Minister Jim Flaherty said Monday.

"We've done a lot through the tax system to encourage Canadian executives, business people, to start utilizing some of the capital they have on their balance sheets," said Flaherty.

"At a certain point, it's not up to the government to stimulate the economy, it's up to the private sector, and they have lots of capital."

Flaherty said the government has already introduced measures in the budget — such as the accelerated capital cost allowance and the mining exploration credit — to compel Canadian corporations to invest some $525 billion of dead cash back into the economy.

Beyond that, he said, it's up to the corporations.

Last week, Bank of Canada governor Mark Carney told Canadian companies that are holding on to piles of cash because of global economic instability to give it back to their shareholders.

The bank governor was responding to a question about a previously released Canadian Labour Congress study that suggests Canadian businesses are sitting on some $500 billion in cash assets.

And Prime Minister Stephen Harper has said, on a global scale, there is "money sitting on the sidelines'' that can revive the world economy.

Flaherty said Monday the general attitude at the annual summer retreat he attended with CEOs was that Canadian businesses need to move away from this time of uncertainty.

"The Canadian economy is doing relatively well and for Canadian businesses this is an opportunity to invest, especially in infrastructure and long-term projects in Canada," he said.

Flaherty made the comments to reporters outside the Rogers Centre, after the Royal Canadian Mint unveiled a commemorative coin marking the 100th anniversary of the Grey Cup.

Five million of the coins, which feature an image of the Grey Cup, will be in circulation at Canada Post locations across the country starting Tuesday.

The coin will be used during the coin toss at this year's historic Grey Cup match, which will be played at the Rogers Centre on Nov. 25.

CFL commissioner Mark Cohon and Royal Canadian Mint Board of Director chair James B. Love were also on hand for the unveiling.

Earlier this month, Canada Post unveiled a series of commemorative 100th Grey Cup stamps that includes nine stamps, one featuring a memorable occasion for each CFL team, as well as another depicting the Cup itself.

Mike (Pinball) Clemons, longtime Toronto Argonauts player, coach and executive, is featured on one of the stamps.

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