Finance Minister Jim Flaherty said Thursday he will meet with "eminent" Canadians — most of whom are prominent business leaders — to seek advice on the federal budget and the economy.

Speaking at a Saskatoon news conference, he said members of the 11-member advisory panel have agreed to provide their insight for a dollar a year.

"This is a council that I wanted to appoint as part of the pre-budget consultations and then on an ongoing basis because of the continuing deterioration in the world economy, the U.S. economy affecting our economy, and the deterioration in commodity prices as well," Flaherty told reporters.

He will seek out their advice on taxation, credit availability and what sort of stimulus is needed for the economy, he said.

Flaherty will first meet with the council on Tuesday, and will continue to do so over the course of the year.

The panel includes former C.D. Howe Institute CEO Jack Mintz, Research In Motion founder Mike Lazaridis and former B.C. Liberal finance minister Carole Taylor, who was named chair of the council.

When asked what sort of advice he was looking to get from the group that he can't get from other MPs, Flaherty replied: "I wanted a group with some more permanence so there would be more continuity to the discussions — so I choose a group of eminent Canadians, all of whom who agreed to serve."

He said he did not look at political ties before asking them to join his council.

Flaherty expects banks to free up credit

Carole Taylor, shown at a news conference in Victoria on Nov. 30, 2007, will serve as chair of the economic advisory council. (Adrian Lam/Canadian Press)In the new year, Flaherty will meet with Canadians across the country in town hall meetings, and looks forward to "hearing directly and in person what their concerns are and what their advice is."

Flaherty also said he and Mark Carney, the governor of the Bank of Canada, would meet with bank CEOs in January to talk about loosening credit. His government has provided banks with "adequate" cash, he said, particularly by buying up to $75 billion in insured mortgages to help keep credit markets moving.

"We expect the banks to reciprocate," he said.

"I expect them to make it evident to us that they are taking steps to make credit more available in Canada."

Last Tuesday, the Bank of Canada cut its key interest rate by three-quarters of a percentage point, to 1.5 per cent, a level not seen since 1958.

All of Canada's major banks have since cut their prime lending rates in response. But none passed on the full 0.75 percentage point reduction, opting instead for a half-point cut — a move that has attracted criticism from observers.

On Wednesday, Carney said the banks' decision not to pass on the full cut to consumers is a "complication" for his monetary policy, but added the situation was not "entirely surprising" given the banks' own higher borrowing costs.

He urged financial institutions to build up capital in good times and draw on it in bad — the opposite of what is now occurring as bankers become more risk-averse in a shrinking economy.

Finance department predicts 4 years of deficits

Flaherty's appointments come a day after he met with his provincial and territorial counterparts. He acknowledged then that Canada would run a deficit next year.

New numbers released Thursday by the Finance Department, meanwhile, indicate that Canada will likely see deficits over the next four years.

Ottawa foresees annual deficits of $5 billion, $5.5 billion, $4 billion and $1 billion in the next four fiscal years, according to the figures.

It expects to edge back into the black in the fifth year of the budget horizon.

The deficits are forecast to occur even if the government proceeds with billions of dollars in asset sales and cost cutting it proposed in the doomed Nov. 27 economic update.

Prime Minister Stephen Harper has repeatedly said his government wants to avoid deficits in the long term.

With files from the Canadian Press