11/01/2011 05:01 EDT | Updated 01/01/2012 05:12 EST

Flaherty On Canada Economy: Recession Not In Forecast

Canada is not entering a recession, Finance Minister Jim Flaherty told MPs Tuesday, despite turbulence in world markets.

Speaking to the House finance committee, Flaherty said the third quarter of 2011 looks good for Canada, and that he expects growth in the fourth quarter too.

Flaherty said Europe is going through a "very difficult time" and may well be in or entering into a recession.

"That is not true in this country," he said. "Canada is doing relatively well and I'll continue to rely on the private sector economists with respect to economic forecasts.

"The economic forecasts that we make are based on the average of 15 private sector economists," he said. "They agreed that the forecasts we are using are a reasonable basis for fiscal planning in Canada. Other people have other views from time to time."

Speaking to reporters after the committee, Flaherty said a decision by Greek Prime Minister George Papandreou to put his country's austerity measures to a referendum concerns him. He said any delay concerns him and pointed out – as he has for months – that the G20 finance ministers have been talking about Greece's money problems since January 2010.

"I encourage all the participants to get on with it, to get to the implementation of the agreements that have been reached. Delay is not helpful and I hope we'll be able to advance that cause at the G20 meetings over the next few days," Flaherty said.

"I would encourage the Europeans to get to conclusions and implementation. This is very important. We already see some reactions in the markets that are not good. And this is the kind of thing that happens when there is extraordinary delay, as there has been."

Flaherty is meeting his G20 counterparts in Cannes, France, this week. He said he doesn't expect consensus about implementing a tax on financial transactions, something he and Bank of Canada governor Mark Carney oppose.

"It's always open to individual countries or countries as a group can impose as a group if they wish," Flaherty said.

Flaherty also pledged that corporate tax cuts, which come into effect Jan. 1, 2012, will go ahead.

The committee is hearing witnesses on a bill to implement the 2011 budget, as well as on what spending should be included in next year's budget.

Earlier in the day, Carney told the committee that Europe is headed for a brief recession and U.S. growth will be weak in the first half of 2012.