Provinces and municipalities have less than two months to finalize funding requests for stimulus projects before federal cash is withdrawn, Finance Minister Jim Flaherty said Wednesday.

Finance Minister Jim Flaherty unveiled the government's latest report on the economic action plan Wednesday. (Jim Ross/Canadian Press)

According to the government's latest quarterly economic report, 97 per cent of the $62 billion worth of stimulus spending Ottawa pledged has been committed thus far. To qualify for federal funding, projects must be completed by March 2011.

"In order to meet these goals, a deadline of Jan. 29, 2010 has been set for partner authorities to secure firm commitments to implement projects," the report reads.

"If all funding for these initiatives has not been allocated by this date, the government will reallocate funding to other initiatives or allow funds to lapse," it warns.

"This plan was not created for eternal life," Flaherty said at a speech at the University of Winnipeg. "So we have provided a compelling incentive to make those projects happen."

Earlier, Prime Minister Stephen Harper showed reporters on his trade mission to China the contents of the government's fourth quarterly report on its economic recovery plan. The report was formally released by the Finance Department later in the day.

"This is a strict use-it-or-lose-it approach [and] fair warning to all of our partners across the country," Flaherty said.

"Our economic action plan is doing what it was meant to do — providing unprecedented short term stimulus," he said. "And we have gotten this boost into the Canadian economy in record time."

Flaherty said 12,000 stimulus projects have been announced to date, and 8,000 of them are underway.

The Finance Department estimates that close to 70 per cent of the 2009-10 stimulus is flowing in the economy. But this figure represents "an estimate of economic activity" as opposed to actual federal payments made, the department notes.

Critics dismiss that notion, saying the stimulus plan has had very little impact on the economy thus far.

"It's a report full of weasel words that tries to hide the truth from Canadians," Liberal finance critic John McCallum said.

"Yes, 90 per cent plus of the money has been committed, but we learned yesterday from the government's own numbers that for only seven per cent of the infrastructure projects has construction actually started."

The Liberal party claims to have done research showing that of a sample of 1,000 stimulus projects, just 12 per cent were generating any jobs by September.

On Monday, Statistics Canada reported that the economy expanded 0.1 per cent in the third quarter, the first quarterly gain since the third quarter of 2008.