Federal Finance Minister Jim Flaherty says the Conservative government isn't planning on any major new spending in next year's budget, but will instead continue with putting money into the economic stimulus plan.

Flaherty said changing the government's focus now would be "misguided" and put the economy at risk. He said the government will instead focus on the $61 billion in stimulus spending announced in January.

Flaherty warned, however, that the stimulus money will end by the next fiscal year. He acknowledged critics will likely call for him to change direction, but said that view is "short-sighted."

"Switching gears now, at such a crucial time, would be the most misguided approach this country could take, and would clearly put our country at risk," Flaherty said in a Friday afternoon speech to the Empire Club in Toronto.

"Budget 2010 will be Year 2 of our two-year economic action plan. We will not undertake major new spending initiatives. We will stay on course, with the economic action plan already announced to protect and create jobs."

Late Friday afternoon, Flaherty told CTV's Power Play that he and Transport and Infrastructure Minister John Baird have received requests from municipalities asking for extensions because they can't finish projects in time for the spring 2011 deadline.

"Some of them want extensions and we're saying no. This is a two-year stimulus plan and the whole purpose of it is to create jobs, create economic activity," he said.

About half of the $61 billion set aside for stimulus will be spent next year, he added.

Flaherty also said he will not raise taxes or cut transfers to provinces in order to pay off the deficit, which the government predicts will be about $56 billion for this year.

He said he'll wait until "firm" economic recovery before the government tries to balance the books again. Although there are positive signs, such as higher auto and home sales, he said Canada is still suffering from high unemployment and hasn't seen "a strong, entrenched recovery yet."

"It's important that while the economy is recovering, we recognize that it is not recovered, and we have to keep stimulating the economy," he said.

Liberal finance critic John McCallum told CTV's Power Play the government has been spending money frivolously, making funds unavailable when the economy soured and money was badly needed.

In an earlier news release, he said the government should have invested in funding technology in order to create more jobs when financial times got tough. He criticized the government for cutting scientific funding.

Thomas Mulcair, deputy leader of the NDP, said the government should be spending more on unemployment benefits.

Flaherty's speech Friday came soon after the release of data that showed personal and business bankruptcies were up 31.6 per cent in September over August.

The Office of the Superintendent of Bankruptcy reported that 489 businesses had filed for insolvency during the month. There were a total of 1.6 per cent more bankruptcies in September 2009 than there were in September 2008.

More than 15,000 Canadians filed for personal bankruptcy in September. That is 45.5 per cent higher than September 2008.