Economy can keep humming with higher dollar, finance minister says

talks threatening growth.

Morneau, speaking from Ottawa to the Bloomberg Canadian Fixed Income conference in New York on Tuesday, struck an upbeat tone about the resiliency of the Group of Seven’s fasting growing economy.

“The current state of the dollar is a reflection of our to slow positive economy, and that’s something that we expect as a ramification of doing well,” Morneau said. “But we think that we can continue to be successful with that level of the dollar.”

Morneau said talks toward a renewed North American Free Trade Agreement are going well, saying he met with U.S. Treasury Secretary Steven Mnuchin Monday night and that the two acknowledged their countries’ mutual interest in NAFTA talks.

The finance minister signalled the nation’s growth rate can continue to be strong, despite some onetime factors that have contributed to the economy as of late.

“While we can’t argue (what) the rate will be on a sustained basis, we’ve done some things that have changed the trajectory,” he said.

Morneau — who is running deficits, though smaller ones than forecast in his most recent budget — gave no signal he’ll press for a return to budgetary balance despite the strength of the economy. Canada will focus on lowering the ratio of its debt to its economy, he said, and will continue to invest in infrastructure and other programs. The country has a low total debt-load relative to other countries, he said.

“Having that great balance sheet is an advantage,” he said. “Investing in the longterm is an opportunity for us to make our country more productive. That’s what we’re going to continue to do.”