"The key is we need to see a bridge to sustainability for the 'Detroit Three'," he told reporters following an address to the business community in Toronto on Monday.

In his speech Mr. Flaherty reiterated concerns that the world is in the throes "of a crisis of unprecedented proportions."

But despite the collapse of the TSX and turmoil both in the oilpatch and the manufacturing sector, he downplayed the impact on the Canadian economy, saying the country may be experiencing a "technical recession."

The world is in a credit crunch but thanks to the strength of the banks here, "the credit of Canada is the best in the world," he said.

Mr Flaherty said a key part of the government's strategy for stimulating the economy will focus on infrastructure investments, especially so called public private partnerships. Ottawa has already signalled it wants to see more P3s, but in his speech he said he wants to see more projects get off the ground more quickly.

"Getting projects out the door is vital to stimulating the economy," he said.

Mr. Flaherty said earlier on Monday that the federal government has "lots of leeway" to act in its efforts to pump up domestic demand in the wake of a global financial crisis. He opened the door to other stimuli -- most likely tax cuts -- that the Conservative government is contemplating on top of infrastructure spending.

"Canada goes into this economic slowdown in the best position among industrialized countries," Mr Flaherty said. "We have paid $37-billion of our debt. The credit rating of the government of Canada is among the best in the world. So we are in a position as a government to take various actions -- we have lots of leeway to act if we need to. We are reviewing steps we could take in addition to infrastructure that would help stimulate the economy."

Mr. Flaherty may signal to markets what exactly his government has in mind when he delivers the fall fiscal update on Thursday. Over the weekend, he signalled Canada is likely to fall into a recession, starting this quarter.