TORONTO - Finance Minister Jim Flaherty and the chief executives of Canada's big banks avoided reporters Monday as they met to discuss credit markets and the wider economy at the start of the new year.
A spokesman for the minister in Ottawa characterized the meeting as private but not secret, observing that Flaherty confers "semi-regularly" with the chiefs of the country's main financial institutions.
Both Flaherty's aid and spokesmen for the banks played down a perception that the minister and the bankers are butting heads over the availability of loans to businesses and individuals.
Flaherty said just before Christmas that he is "hearing across Canada concerns about access to credit" and said he and the bankers would be discussing lending practices, which he called "a major issue going into 2009."
The banks say their lending has remained robust even as financial markets and the economy have deteriorated.
A TD Bank analysis late last month noted that household borrowing in November was 12.1 per cent above year-earlier levels. This was off from year-over-year growth above 13 per cent in the previous months, but the TD report attributed this to weaker demand as consumers retrenched and the housing market softened -- not to constricted lending policies.
It also said bank loans to businesses have in fact accelerated, perhaps because other sources of corporate financing have dried up.
But Catherine Swift, head of the Canadian Federation of Independent Business, said Monday that "there's no question that it's tightening."
She said a CFIB survey of its small-business members found 28 per cent worried about access to credit in December, up from 18 per cent in September and 13 per cent in December 2007.
And Canadian Manufacturers and Exporters reported that more than one-third of 327 companies it surveyed last month said they were "experiencing difficulties" getting adequate financing.
The manufacturers and exporters group said working capital and funds for expansions were most difficult to obtain.
