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Finance Minister Jim Flaherty speaks to reporters in Ottawa on Thursday ahead of his trip to Washington to attend a meeting with his G7 counterparts over the global economic crisis. ((CBC))

With Stephen Harper's Conservatives reeling at the polls amid a worsening economic climate, Finance Minister Jim Flaherty acknowledged on Thursday that the "unprecedented" economic turmoil is "getting worse" while repeating his recent warnings that Canada could be hit with international spillover sparked from the U.S. credit market collapse.

Speaking to reporters on Parliament Hill in Ottawa on Thursday morning, Flaherty sought to reassure Canadians that the government understands their growing fears and that their financial system is "well-positioned" to weather the global turmoil.

"While Canada is better placed than other economies, we are not immune," Flaherty said.

Harper has faced heavy criticism from opposition leaders during the campaign for the Oct. 14 federal election over what they say is his failure to acknowledge Canadians' concerns and lack of a solid plan to protect their interests as the financial crisis spreads.

The finance minister said he personally shares the growing concerns of Canadians seeing dramatic losses in their savings and retirement investments, as well as their fears over their job security and ability to keep their homes.

"Let me reassure Canadians, our government has been acting to steer our economy through these challenging times," he said.

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‘It's interesting that no one in the media has mentioned that Harper and Flaherty were actively encouraging US banks and Mortgage companies to enter the Canadian market.’

—Incredulous

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The statement was a far cry from last week's leaders' debates, in which Harper refused to acknowledge that Canadians were worried about their job security and their homes, instead saying Canadians were focused on problems in the stock market.

Flaherty also said he has "absolutely no concern" about the health of Canada's financial institutions and added the government was not looking at any plan to bail out banks, as have other countries such as Britain, Ireland and Iceland.

But the government, he said, was looking at a range of measures that would increase liquidity in the market to free up credit for Canadians to borrow for their businesses and households.

"We are not looking at a rescue for banks," he said. "What we have a challenge about is the availability of credit; that matters to Canadians."

Flaherty said a meeting of G7 ministers in Washington on Friday will set the course for dealing with the current global economic crisis, but also called for second G7 meeting in the coming weeks to ensure measures adopted this week are carried through.

He said it was "not a time for politicking," then added, in a veiled shot to the Conservatives' opponents, that it was also not a time for "massive" new spending and taxation programs.

"This is a time to protect Canadian investors and protect our system," he said.  

Tories have 'no plan' on financial crisis: Dion 

Flaherty's address comes just five days ahead of the election, as the campaign has largely become a battle over which party is viewed as the best stewards of the country's economy in the face of global market volatility.

Speaking in Halifax on Thursday following Flaherty's speech, Liberal Leader Stéphane Dion again targeted Harper's "laissez-faire, I-don't-care" approach to the ongoing financial crisis while insisting the Conservatives have mismanaged the economy by squandering a $12-billion surplus in just two and a half years.

"It's certainly a good idea to wake up, but it's too little, too late for Mr. Flaherty and Mr. Harper," Dion told reporters.

"They were accusing others of panic when others were telling them to do something and to have a plan. They have no plan, and it's too late for them."

Meanwhile on Thursday, NDP Leader Jack Layton said the Conservatives have wasted a golden opportunity to spare Canadians from corporate greed after the country's largest banks decided this week not to pass along a key interest rate cut to consumers.

He said Flaherty's failure to demand that banks pass on the latest interest cut in full shows the Tories "don't care about ordinary families."

Dion, in turn, attacked Layton for proposing "re-regulation" of the Canadian banking system.

"It's not for politicians to direct the banks in Canada. Mr. Layton failed to understand that," Dion said. "It's [also] not for ministers to be inept and unable to do anything. Mr. Flaherty failed to understand that."

Bloc Leader Gilles Duceppe said Thursday that while he finds the move unfair, he added there is nothing the government can do about it.

"The government can't tell the bank to reduce, or not," he said. "I mean, how many times have they said they can't tell the Bank Of Canada what to do? So, consequently, they can't tell the banks to reduce to the same level as the Bank of Canada is reducing their interest rate."

In a release following Flaherty's appearance, the Liberals said the finance minister's comments are a far cry from the "rosy picture" Harper painted only a week ago.

"This whole performance serves no other purpose than to prove that the Harper Conservatives are in full panic-mode," the release said.

With files from the Canadian Press