LEVIS, Que. — Prime Minister Stephen Harper found himself vigorously defending his government's economic forecasts Thursday, shortly after announcing new infrastructure spending for Quebec.

"We don't pull our projections out of the air," Harper told a news conference in Levis, across the St. Lawrence River from Quebec City.

"We arrive at our projections based on a survey of the best private-sector forecasters across the country."

Harper said Canada is in a period of enormous uncertainty where forecasts are changing rapidly.

His remarks came a day after the country's parliamentary budget officer said Canada's economy has deteriorated so much since Ottawa introduced its budget that more jobs have already vanished than the $40-billion stimulus package was intended to create.

Kevin Page's latest report shows an economy that plummeted in the first quarter of this year and erased most of Finance Minister Jim Flaherty's projections when he tabled the budget in January.

Harper was quick to brush aside Page's claims.

"I think what Mr. Page said yesterday is not remarkable," he said. "Forecasts are going to change very rapidly in this environment. Our forecasts were based at the time on the best assessments of those who specialize in this business."

Harper joined Quebec Premier Jean Charest on Thursday to announce a $2.3-billion investment, which includes money to upgrade drinking water systems in the province.

The federal and provincial governments expect the cash injection to also create employment in Quebec.

Charest said Quebec will spend nearly $14 billion on infrastructure and energy projects in each of the next two years.

"Every $1 billion invested maintains more than 8,000 jobs," Charest said of the infrastructure spending.

In a statement, Charest said the measures place Quebec in a better position to confront the economic storm.

"With the participation of the federal government, we're offering Quebecers extra tools to ensure Quebec's economic development and maintain the quality of life of families," he said.