Finance ministers from the G20 nations say they will press ahead on tax reform to prevent profit-shifting by companies and new governance measures for banks to prevent future bank failures.

At the conclusion of a morning meeting in Washington, Finance Minister Joe Oliver said Canada is committed to structural reforms to boost economic growth.

In their last meeting in Sydney, the G20 leaders said they aimed to boost world economic growth by two per cent over its current trajectory.

EU debt a concern

In a news conference, Oliver said the finance ministers had discussed their concerns about slow growth around the world, adding that Canada`s economic fundamentals are looking quite good in a global context.

“The level of debt in European countries is high and that is causing considerable drag on economic growth. The level of debt in Canada is about half that of EU countries,” he said.

He laid out areas of potential reform in Canada to boost growth, including tax reform around capital gains, lowering tariffs and removing infrastructure barriers to trade.

Oliver said the government had a particular focus on boosting increased labour force participation. He said that includes encouraging “under-represented groups” such as aboriginal and older Canadians to join the workforce. He mentioned the need for training to fill skills gaps in the economy and for “incentives” to participate in the labour force.

“In Canada, we’re focused on raising all boats and we have been successful in doing that. That clearly is the best way to help those who have less,” he said.

Single regulator a `personal interest`

Oliver also raised the issue of creating a single financial markets regulator for Canada, an issue that he said is of particular “personal interest.”

The finance minister refused to commit to any measures he might introduce in his first budget in 2015, which would see the federal books balanced for the first time in eight years. However, he said there is latitude for tax relief in the budget, but said Ottawa would never again return to a deficit position.

“We’re providing tax relief to families and we’re focused on taxes for the middle-class,” he said, adding that the government had already provided measures in those areas and he was not committing to anything new. 

Australian Finance Minister Joe Hockey read a communiqué Friday saying the two per cent growth target is ambitious, given problems such as lagging emerging economies and high public debt in most member countries.

The communique addressed issues of tax avoidance and financial sector sustainability.

“We will develop these measures to support growth and create jobs in the context of maintaining financial sector stability and fiscal sustainability, including by addressing tax avoidance and evasion,” the statement said.

"Structural reforms are especially important to achieve our common objective. We focused at this meeting on the importance of reforms which foster greater competition in product and service markets," it continued.

The G20 nations are focusing on real outcomes, such as job creation and GDP growth driven by the private sector, Hockey said, adding that those are the best ways to alleviate poverty around the world in the long term.

“Governments haven’t got any leeway on fiscal policy and they’re running out of room on monetary policy. So the only way to alleviate poverty is to promote growth,” he said.

Hockey set out some priority areas for the G20 countries to try to draft common legislation ahead of their next meeting in Brisbane in November.

These include:

  • Real and tangible plans on tax reform to prevent profit shifting by companies.
  • Building mechanisms to fund infrastructure development.
  • New governance measures for banks that are too big to fail.
  • Reducing barriers to trade.

The G20 meeting issued a statement saying it is monitoring the economic crisis in Ukraine. Hockey said there were no tensions around the issue, despite the full engagement of Russia in the talks.

Remembering Jim Flaherty

The G20 leaders paused during the gathering to pay tribute to Jim Flaherty, upon learning of his death Thursday.

The sudden loss of Canada’s former finance minister shocked longtime colleagues at the G20′s spring meeting — the first time in nearly a decade such an event was attended by a Canadian finance minister other than Flaherty.

Oliver said fellow finance ministers had expressed condolences to him.

"It`s clear he is as admired around the world as he was in Canada," Oliver said.

With files from Reuters