By Paul Vieira 

European economies need to quickly embrace a fiscal-stimulus plan because the region is "perilously close" to deflation, Canadian Finance Minister Joe Oliver said Sunday, warning such a turn could have negative consequences for a global economy.

"What we do not want, of course, is to see Europe enter into a deflationary spiral," said Mr. Oliver, who spoke to Canadian reporters via teleconference after wrapping up a meeting in Cairns, Australia, of finance and central-bank chiefs belonging to the Group of 20 major industrialized and emerging economies. "It must be avoided for the good of Europe and the good of the global economy."

At the summit, Mr. Oliver and his peers reaffirmed a pledge to sharply boost global growth, adding through the G-20 communique global growth was "uneven" and remained at a pace below the level needed to generate adequate jobs growth.

Canada's economy has slowed noticeably since an early burst following the end of the recession, and employment growth has been tepid for more than a year, with the unemployment rate holding steady in the 7% range while the U.S. has recorded a steep decline.

Mr. Oliver's call for a Europe-wide stimulus program marks a change of course for Canada, which since 2010--when it hosted the G-20 leaders' summit in Toronto--has been at the forefront advocating the need for major developed economies to address ballooning debt and deficit levels in an effort to restore investor confidence and boost growth.

In his call with reporters, Mr. Oliver said Canada needs to show some flexibility on fiscal targets within the G-20, which Canada has championed in the past, because some countries need to undertake stimulus and structural changes "to get the growth going."

The stimulus, such as increased infrastructure spending, that is eventually adopted by countries should be accompanied by a fiscal plan detailing how and when governments plan to return their budget balances to more stable levels, the Canadian minister said, adding that is what Canada did with its multiyear initiative. Canada is now on the verge of recording a budget surplus next year.

Write to Paul Vieira at paul.vieira@wsj.com