Canada's finance minister called on U.S. lawmakers to move quickly to get a plan in place to deal with the American budget deficit.

Jim Flaherty, in a speech to the Canadian Association of New York, a group which promotes Canada-U.S. relations, said there is "no time to waste" in getting a blueprint in place to "eliminate deficits, reduce debt and create a cushion against the next global economic shock."

He warned that Europe's debt crisis is a reminder that there are economic pitfalls ahead, saying that "we will never be prepared for the next financial crisis if we're still grappling with the consequences of the last one."

Flaherty boasted that Canada has set an example of fiscal responsibility, "yet Canada's success cannot exist in a vacuum."

He told his audience that with the U.S. as its biggest trading partner, the health of Canada's economy and of the world's depends greatly on the fiscal decisions being made in the U.S.

"It's essential that we all have a clear strategy in place to ensure markets continue to have confidence in our fiscal plans — and there is no time to waste in doing so."

In his speech, Flaherty specifically named Paul Ryan, the Republican chairman of the House budget committee, who has proposed a controversial plan to repeal U.S. president Barack Obama's health-care law, hard caps on domestic spending, and limits on Medicare entitlements.

Flaherty's comments came a day after Obama warned that Congress must raise the debt ceiling or risk causing another global financial crisis.

Congress debates raising debt ceiling

He said that Canada, unlike many advanced economies, expected its ratio of government debt to economic output to once again start to fall, beginning in the 2012-13 fiscal year.

And he quoted the IMF as predicting that Canada would be only one of two G-7 nations to return to budgetary balance by 2016 with a debt-to-GDP by then of less than 30 per cent.

Flaherty's remarks came as U.S. lawmakers continued to debate whether to raise the government's legal borrowing limit. The White House has said it will exceed its $14.3-trillion debt ceiling on Aug. 2.

Earlier Wednesday, U.S. vice-president Joe Biden gave his most optimistic assessment yet of budget talks he's leading aimed at producing a deal with Republicans to cut the deficit by $2 trillion US or more over the coming decade or so.

Biden said that he's confident that the talks will produce an agreement on cutting the deficit "well beyond" $1 trillion over 10 to 12 years.

The talks are aimed at finding spending cuts to accompany must-do legislation allowing the government to continue to borrow to finance its operations and avoid defaulting on U.S. bonds.

With files from The Canadian Press and The Associated Press