Finance Minister Jim Flaherty says he now expects Canada's economic recovery to be modest and for job losses to mount into 2010 even after growth has begun.

Flaherty gave his most recent assessment of economic prospects in a conference call from Chile on Friday, after a meeting with finance ministers from the Americas.

Responding to surprisingly high job losses reported in the United States on Thursday, Flaherty said all of his colleagues are concerned with the toll the recession is taking on workers and warned that while the economy may be in the process of stabilizing, labour markets are not.

"We'll start to see stabilization, which we are seeing now, and then a return to economic growth but continuing deterioration in employment," he said.

"We can expect that to happen into 2010, but we're optimistic we will then see the unemployment numbers start to improve."

On Thursday, the U.S. labour department reported that payrolls fell by 467,000 in June — about 100,000 more than expected.

In Canada, the economist consensus is calling for another 30,000 job losses for June, when Statistics Canada releases the latest data next Friday. Canada has lost 363,000 jobs since October.

Flaherty also said he believes Canada's low corporate tax regime will begin attracting companies into the country.

Earlier this week, Tim Hortons Inc. announced it would relocate its corporate registration from the U.S. back to Canada to take advantage of lower taxes.

Flaherty said he expects other companies to make the same decision in the future, as Canada's corporate tax rates slide to the new 25 per cent floor in combined federal and provincial taxes.