TORONTO -(Dow Jones)- Canada's Finance Minister, Jim Flaherty, said that he has spoken with U.S. Treasury Secretary Tim Geithner, reiterating the country's opposition to the global bank tax.

Flaherty, who spoke earlier Monday in Toronto, was in Cambridge, Ontario, a 90-minute drive west of Toronto, to give the keynote address at a conference hosted by the Centre for International Governance Innovation, a nonbipartisan think-tank. Tuesday, he is speaking at an Institute for Research on Public Policy pension conference in Toronto.

Canada, which is hosting a G20 summit next month in Toronto, opposes its closest allies over the proposed global bank tax. The U.S., Germany, France and the U.K. all support the levy. Joining Canada is a growing list of opponents that includes Australia, a non-G7 member, Japan, Brazil, Switzerland, and some Asian countries.

"We need to concentrate on what the core issue is there," Flaherty said. He said the two key elements are the quality and equality of capital among G20 financial institutions and caps on leverage. He said G20 leaders can "not let ourselves be distracted by other issues" in order to avoid future financial crises. Flaherty also wants to get an recommitment from the G20 to avoid protectionism. "Canada is a great example to the world of what a relatively modest-sized country can do with free trade and the creation of wealth," he said.

Flaherty was in Washington last week for G7 and G20 meetings of finance ministers and central bankers that were held on the sidelines of the International Monetary Fund and World Bank annual spring meetings. The IMF endorses charging banks levies to fund the cost of future bailouts.

Instead, Flaherty is promoting the idea of having banks raise "contingent capital," an automatic financial shock-absorber that's triggered in the event of a crisis. Banks would issue debt that automatically converts into equity if they run into trouble. It would dilute shareholders but supply the extra capital.

Politicians in Britain, Europe, and the U.S. are pushing hard for a global bank tax to curry favor with the public after using taxpayers' money to bail out "too-big-to-fail" financial institutions, many of which contributed to the world's near-economic collapse in 2008 through their own inadequate oversight and loose underwriting standards.

The U.S. is committed to a bank tax, while the U.K. would only go along with a tax if it was imposed globally. They need their fellow G7 and G20 leaders onside, otherwise they could drive their banks, and jobs, to jurisdictions with more favorable tax regimes.

On the economic front, Flaherty said that Canada's economic growth in the past two quarters has been "a bit better than what we had anticipated."

"We're running a relatively small deficit compared to the other G7 countries, and will be able to balance the budget in the medium term," he said.