UPDATE 2-Canada PM vows to protect financial system
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CALGARY, Alberta, Oct 15 (Reuters) - Prime Minister Stephen Harper vowed action on Wednesday to make sure Canada's banks are not disadvantaged as other countries inject their financial systems with hundreds of billions of dollars amid the credit crisis.
But, a day after his Conservative Party was returned to power with a larger minority of seats in the House of Commons, Harper would not give details of the options being discussed.
"We're looking constantly at what needs to be done to ensure the availability of credit for Canadian businesses, families and individuals," he told reporters in Calgary. "At the same time we're also looking to make sure our banks are not put at a competitive disadvantage.
He said none of the alternatives "involve significant outlays of taxpayers' money".
So far, Canada stands alone among major industrialized countries in avoiding a hefty bailout of commercial banks. The United States, where the credit crisis began, has launched the largest financial rescue package at $700 billion.
U.S. President George W. Bush called Harper on Wednesday to congratulate him on his election win and the two discussed the financial crisis and what European countries are doing in response, White House spokesman Tony Fratto said.
Harper said often as the crisis deepened during the five-week election campaign that he would not boost spending to the point where Canada would fall back into a budgetary deficit.
Meanwhile, economic growth forecasts have been clawed back with trade expected to weaken.
Harper was criticized by the opposition Liberal and New Democratic parties for downplaying the crisis and its impact on the economy, which is highly dependent on conditions in the United States, Canada's largest trading partner.
On Wednesday, he detailed a series of immediate moves aimed at steadying the economy, including getting politicians back to work in Parliament this autumn and presenting an economic update before the end of November.
Ottawa will also arrange a meeting on the economy with the leaders of the provinces and territories.
Harper said he will discuss the financial maelstrom with French President Nicolas Sarkozy and European Union President Jose Manuel Barroso at a Canada-EU summit on Friday.
"At the summit we will also explore the economic partnership between us and the EU," he said.
In addition, Canada is calling for another meeting of Group of Seven finance ministers to discuss the crisis.
Harper pointed out a recent report by the World Economic Forum said Canada's banks remain among the most solid in the world. He also said the meltdown of the global financial industry put the country's financial institutions among the largest in terms of market capitalization.
Still, rescue moves in other countries have raised expectations that some public money will be injected soon to aid interbank borrowing.
"The hope as we go forward is that some of the changes we've seen around the globe should be reflected in changes we've seen in Canada," Craig Wright, chief economist Royal Bank of Canada (RY.TO), told a Canadian Club luncheon in Ottawa. "Not to subsidize the banks but just to level the playing field." (Additional reporting by Louise Egan and Tabassum Zakaria; Editing by Peter Galloway)
