Canada has options to deal with disruptions in the financial sector and is well positioned to cope with "global headwinds," Finance Minister Jim Flaherty said on Friday.
In comments emailed to Reuters, Flaherty stressed Canada's advantages in terms of strong financial systems and a healthy budgetary position as markets tumble in the face of economic uncertainties in Europe and the United States.
Canada's budget deficit is narrower than those in the United States and many European countries, and the government has already started whittling away at the shortfall.
"We have a range of measures to respond to possible financial sector disruptions," he said, but gave no details.
But Flaherty also agreed that risks remain.
"We are a trading nation, with about a third of output generated by exports and deep linkages with the U.S. economy," he said. "The global economic recovery remains fragile and this uncertainty may eventually impact Canada."
Canadian stocks tumbled as much as 4 percent on Friday, touching their weakest point since August 2010, before ending the day 1.76 percent lower, dragged down by falling energy and resource issues.
World stocks fell for an eighth day in a dizzying descent that has wiped around $2.5 trillion off the value of global equities this week.