The federal government's stimulus plans will not be affected by faster-than-expected growth in January, Finance Minister Bill Morneau said Friday. He also suggested to an audience in London that Canada's deficit-embracing budget might serve as an example for other countries struggling to boost their economies.

Addressing an invite-only breakfast meeting attended largely by London-based bankers and economists and hosted by the Canadian High Commission, Mr. Morneau said he was "delighted" that Canada's gross domestic product grew by 0.6 per cent in January, lifting some growth forecasts for the full year to between 3 and 3.5 per cent.

But he said the better-than-expected numbers did not change the government's underlying belief that it needed to go billions into deficit in order to boost the country's longer-term prospects. Nor, he said, would the economic plan be affected by fluctuations in the value of the dollar or the price of oil.

Story continues below advertisement

"Our plan is not built off a short-term sense that we were facing an immediate issue, but off a long-term sense. So we're going to stay focused on that plan," he said. "You'll see us remain focused on thinking about how we can help the children and grandchildren of parents today."

He rejected a suggestion from the host of the breakfast meeting, Reuters editor-at-large Axel Threlfall, that the government had deliberately low-balled economic forecasts in order to be seen as exceeding expectations. Mr. Morneau said the forecasts were "prudent" given that private-sector economists had repeatedly overestimated growth in recent years.

"We recognize that Canadians want us to be prudent, so we're going to be prudent all the way," he said, adding that if growth materialized as expected, the government would return to balanced budgets in "about five years."

Mr. Threlfall called Canada a "flag-bearer" and a "guinea pig" for stimulus economics within the G7 when most other developed economies are embracing austerity as a response to tough economic times. Mr. Morneau did not dispute that notion and said there had been great interest from other government officials he met at a G20 seminar in Paris on Thursday.

"What I'm hearing really from all participants is that the ability to have an impact on growth through monetary policy is more of a challenge today … and that fiscal measures can make a real difference," he said.

But, he added, each country would have to chart its own course, noting that Canada was in a better position to run deficits than most countries: "We're a country with the lowest debt-to-GDP [in the G7]. Our interest rates are very favourable. So that means we're well positioned to do it. We will be able to serve as an example of that action, but every country's in a different position."

When the breakfast briefing opened to questions from the floor, Mr. Morneau was repeatedly asked how the Canadian government viewed the June 23 stay-or-leave referendum the United Kingdom is holding on its membership in the European Union. He refused to be drawn into the debate, saying it was an issue for Britons to decide for themselves.