TORONTO - Ontario isn't likely headed into a recession as a result of an increasingly troublesome U.S. downturn, the province's finance minister said Wednesday, noting that a more worrying scenario would be the possibility of a long period of slow growth.

"Whether or not you have negative growth in one or two quarters is in my view less of a challenge than a protracted long-term period of very modest growth, and that's something all of us need to keep an eye on," Dwight Duncan said.

"So far, we still continue to see positive growth overall for the year, but ... the advice we're receiving is that this -- definitely in the United States -- will stretch well into 2009, and obviously that can impact on us."

Ontario's forestry and manufacturing sectors have been among the hardest-hit in Canada as a result of an economic slowdown in the U.S. precipitated by a downturn in that country's housing market, a subprime mortgage crisis and a worldwide credit crunch.

In recent weeks the financial crisis has worsened amid increasing concern that growing troubles in the financial sector could add to the problems facing the U.S. economy.

Duncan said it's too early to judge the impact of the U.S. slowdown on Ontario's economy, noting there's no data pointing to a recession.

But he said he's watching developments in the U.S. closely, and will make any changes needed to help the province when he delivers his fall economic statement in October.

"The most recent information, the Q1 (first-quarter) numbers, say that our budget numbers remain on track, but clearly in an economy like this you have to be ready to make adjustments when necessary," he said.

Several financial institutions and experts have forecast slow growth for Ontario into next year, with some downgrading their forecasts.

"The Ontario economy right now is probably contracting, and I think (it) will post meagre economic growth going forward," said TD Bank economist Craig Alexander.

"It's going to take well into 2010 before economic growth in Ontario is back up to something that would be viewed as being healthy."

Alexander said he wasn't scaling back his forecast "because it was already assuming we were going to see very soft economic conditions."

A long period of slow growth, Alexander added, would be riskier than a recession because the latter could be followed by a strong rebound, while the impact of a slow decline could take years to be felt.

Premier Dalton McGuinty acknowledged Wednesday that Ontario residents can't "entirely shield ourselves from what happens south of the border."

But he stressed the province isn't "entirely helpless," and would provide more training opportunities to those losing their jobs.

Progressive Conservative Leader John Tory said the government is reacting too slowly and needs to take immediate action to put people's minds at ease.

"If they believe there's even the possibility we can have a long period of slow growth and more job losses and continued struggling for families and businesses, they should be acting at the earliest possible date," Tory said.

"That means an economic statement Monday and moves to provide tax relief, to provide more training opportunities, to provide some leadership on public sector restraint now, when families need the reassurance and need the leadership."

NDP finance critic Michael Prue echoed Tory's call for action.

"Every day when I open up the newspaper, there are people losing their jobs across this province, and it won't take very long until they get off of EI and onto welfare," Prue said.

"We cannot have a whole generation go from good jobs to welfare in as rapid a time frame as might happen."