The Canadian government Wednesday unveiled a legislative agenda heavily focused on boosting an economy that the central bank governor earlier said could tip into a recession.

The so-called Speech from the Throne, which outlines the government's priorities in the new session of Parliament, said it would be "misguided" to commit to a balanced budget "at any cost" in the short term during a global downturn when the credit crisis has "dramatically weakened" growth prospects. The government will, however, avoid "structural deficits," said the speech, read by Governor-general Michaelle Jean, the representative of Queen Elizabeth II in Canada.

"This is a time of extraordinary global economic challenge and uncertainty," the speech said. The government will "maintain a prudent course for the country's finances. It will take action to support the economy today while building a stronger economy for the future."

Finance Minister Jim Flaherty will provide more details in the fall fiscal and economic update next week on an as yet unspecified date.

The government's legislative blueprint came on a day when Bank of Canada Governor Mark Carney warned that the world economy could be in for its biggest downturn in a few decades.

"Recession is a possibility in Canada," Carney said in London, U.K.

The government said any new economic measures it takes will be targeted for "maximum benefit". It will review all program spending, speed up public infrastructure projects, and introduce legislation to ensure compensation growth in the federal public service is "sustainable".

The government said it will provide support for the auto and aerospace industries, but didn't provide specific details. As well, it will take measures to encourage companies to invest in new machinery and equipment.

Energy Security Vital

It aims to work with provinces to remove internal barriers to trade, investment and labor movement by 2012, and to set up a common securities regulator.

Competition and investment laws will be modernized and the government will move implement many of the recommendations of a competition panel that advocated opening up several industries. At the same time, it will take steps to safeguard consumers and national security. As well, it plans to pursue new free trade agreements in Asia, the Americas and the European Union.

The government said energy security is vital and it will support the development of cleaner energy sources. It said natural gas deposits under Canada's North is an untapped source of clean fuel and an "unequalled avenue to creating economic opportunities for northern people". To this end, the government will reduce regulatory and other barriers to extend the gas pipeline network into the North.

It noted that energy authorities around the world are investing in nuclear power to meet both energy security and climate-change goals. The Canadian government will ensure that its regulatory framework "is ready to respond should the provinces choose to advance new nuclear projects".

The government said it was committed to reducing Canada's greenhouse gas emissions by 20% by 2020, and will work to implement a North-America-wide cap and trade system for greenhouse gases.

The government wants 90% of Canada's electricity needs to come from non-emitting sources such as water, nuclear, clean coal or wind power by 2020. Towards this end, it will continue to provide support for biofuels, wind and other energy alternatives.

The government will also introduce legislation to ban all bulk water exports from Canadian freshwater basins to protect vital resources.

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