Canada economy facing challenge but still sound

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OTTAWA, July 31 (Xinhua): Canada's economy is slowing in face of a series of challenges but the economic fundamentals are still sound, Finance Minister Jim Flaherty said yesterday.

Compared with the United States, Canada is having a good housing market and car sales. Canadian banks and households are both in better fiscal shape than their US counterparts, he said at the summer caucus meeting of the ruling Conservative Party in the city of Levis in Quebec Province.

But Flaherty admitted that there are challenges to Canada's economy, citing job losses and the rising of inflation rate recently.

Last week, Canada's inflation rate was reported to have hit 3.1 per cent in June, driven largely by gas and food prices.

Unemployment rate also rose to 6.2 per cent in June.

The slowing down in US economy is taking its toll on Canada, who ships 75 per cent of its total exports there. Forestry and construction are among the most hit as the housing market slowed down in the United States.