Finance Minister Jim Flaherty is standing firm in reiterating Canada's position that it will not ante up part of the $400 billion US sought by the International Monetary Fund for an emergency eurozone fund.
While other world financial leaders have already made funding commitments, Flaherty told reporters Friday at a press conference in Washington, D.C., that no such pledge could be expected from Canada.
"Canada has always supported the IMF," Flaherty said after meeting with other G20 finance ministers. "At the current juncture, however, we believe that the fund has adequate resources to deal with imminent needs.
"This is particularly true given the capacity of Europe to deal with its sovereign debt crisis."
On Thursday, IMF head Christine Lagarde warned that the European debt crisis poses a grave threat to poorer countries that are dependent on trade and global credit markets.
She wants to see another $400 billion added to the IMF's eurozone emergency fund with the help of Canada, the U.S. and other nations.
But she has been struggling to convince Canada, among other countries, to pony up.
$320B secured by IMF
The IMF said earlier in the week that it had so far secured $320 billion in pledges from other countries.
Flaherty said Canada's position is that any IMF funding program "should be subject to a more rigorous approval process," echoing statements he made earlier pushing for change in the way the IMF is governed.
He has lobbied for non-European countries such as Canada to get a type of veto power over any decisions the body makes to bail out Europe.
As it stands, Europe controls 35 per cent of the seats on the IMF's board, and a simple majority is needed to take any policy actions. Along with other options under consideration, a two-vote system could help guard against that regional disparity.
"Because of the large number of European seats on the board of the IMF, some of us, and Canada certainly, is of the view that we ought to have two keys, in effect," Flaherty has said late Thursday.
"We would have one vote by the eurozone countries and another vote for approval by the non-eurozone countries."
The system would not be a veto whereby any one member could unilaterally kill a decision, but would instead act as an extra layer of governance before the body chose to act.
Asked if his IMF governance proposal meant that non-Europeans would have a veto on aid for the region, Flaherty said yes, Bloomberg reported Thursday. Flaherty said he expects an "animated" discussion on the issue at meetings of Group of 20 officials in Washington on Friday and Saturday, the agency reported.
Flaherty said the fund created to bail out European nations, should it be necessary, isn't nearly large enough because European governments themselves haven't put enough into it.
"The firewall that is being constructed so far is not adequately funded in our view by the eurozone countries," he said. "They should seek to overwhelm the problem ... They have the resources to do it."
European debt crisis a threat to poor countries: IMF head
But European policymakers reject the notion that they need to fork over anymore. Joerg Asumussen, a member of the European Central Bank executive board, countered: "With all friendship, I would say the Europeans have done their work on the firewall."
He noted that the bailout lending fund is now at $1 trillion. "Now it's up to our global partners," Germany's former deputy finance minister said. "This is in the interest of all of us."
Asumussen called on Canada and other countries to commit more money to the IMF. The eurozone countries have already promised another $200 billion US to the IMF, he pointed out.