The $50-billion deficit Canada is facing this fiscal year is necessary to help Canadians weather the worst economic recession since the Second World War, Finance Minister Jim Flaherty said Thursday, rejecting calls from the opposition to resign.

"I'm busy doing my job. There's a global recession going on," Flaherty told CBC News.

Flaherty announced Tuesday the deficit will rise by more than $16 billion in 2009-10 from the $34 billion he forecast in January's budget.

The announcement prompted calls from the opposition on Wednesday for him to step down. Liberal Leader Michael Ignatieff called Flaherty's handling of the global recession "incompetence on a historic scale."

Flaherty said Thursday the projected deficit only represents about 3.3 per cent of Canada's gross domestic product. That pales compared to the 10 per cent and greater deficits Japan, the United Kingdom and the United States are facing, Flaherty said.

"None of these economists, I can tell you, predicted this recession. And none of these economists predicted the depth of this recession. I have to deal with the reality of it — not the speculation surrounding it — and that's what we're doing," he said.

'Right thing to do'

The Conservative government is being responsive to the needs of Canadians with respect to unemployment and preserving jobs in the auto sector, Flaherty said.

"These are expensive — billions of dollars — and that's why we have an additional deficit. But it's the right thing to do."

More than half of the additional spending is aimed at preserving the ailing auto industry, he said.

"But that's saving an industry and that's saving thousands of jobs in our country during a recession. I hope the opposition will recognize that's the right thing to do actually."

Can afford to do more: Flaherty

Flaherty said recent reports from the International Monetary Fund indicate Canada can afford to take more action to address the recession.

The finance minister also maintained Canada is still on track to be out of a deficit position by 2013.

"As the economy recovers, as we run surpluses, we'll use that money to pay off the deficits we're going to incur," he said.

January's federal budget predicted five years of deficits with a shortfall of $64 billion over the next two years — a figure that will now climb to more than $80 billion.

Just two months before that, the Conservative government was touting years of surpluses in its fall economic update.

The three opposition parties have accused the Conservative government of failing to get stimulus money into the economy in the 120 days since the budget was tabled.

The Liberals, NDP and Bloc Québécois have also demanded the government expand the threshold of EI benefit qualification, arguing those hurt most by the recession aren't able to get help.