TORONTO (Bloomberg) - Canadian stocks had their biggest drop in four weeks as US Treasury Secretary Timothy Geithner said banks will need more government help and oil's retreat pushed energy producers lower.

Royal Bank of Canada, Toronto-Dominion Bank and Manulife Financial Corp. lost more than 3.2 percent.

Suncor Energy Inc. and EnCana Corp. dropped at least 1.9 percent after Qatar's Oil Minister Abdullah Bin Hamad Al-Attiyah said global energy demand remains weak. Magna International Inc., North America's largest auto-parts maker, tumbled 3.9 percent after General Motors Corp. said the likelihood it will file for bankruptcy has increased.

"Investors are coming back to the view that it's going to be a long slog to get through this financial situation," said George Vasic, market strategist for UBS Securities Canada Inc. in Toronto. "The amount of recapitalisation needed may fix the banking system but end up diluting the share price."

The Standard & Poor's/TSX Composite Index decreased 224.84 points, or 2.6 percent, to 8,596.22, the steepest drop since March 2. The benchmark is down 4.4 percent for the year, compared with a 14 percent retreat in the MSCI World Index of 23 developed markets. The Standard & Poor's 500 Index fell 3.5 percent yesterday.

The deepening global recession requires the use of "everything necessary" to spark growth, Prime Minister Stephen Harper said in an interview from Washington. Yesterday's decline in the S&P/TSX trimmed its advance since March 9 to 14 percent.

Royal Bank of Canada, the country's largest bank by assets, slid 3.2 percent to C$35.80. Toronto-Dominion fell 4.2 percent to C$42. Manulife lost 8.5 percent to C$13.72.

A measure of 38 financial stocks in the S&P/TSX index retreated 4.1 percent, the steepest decline among 10 industries.

"Some banks are going to need some large amounts of assistance," Geithner said yesterday on the ABC News programme "This Week". The terms of a $500 billion public-private programme to aid banks "cannot change" for investors or they will lose confidence in the plan, he said on NBC's "Meet the Press".

Suncor slumped 3.8 percent to C$28.25. EnCana fell 1.9 percent to C$50.99. Oil declined 7.6 percent to $48.41 a barrel on the New York Mercantile Exchange.

Abu Dhabi National Energy Co., the Persian Gulf petroleum and power producer known as Taqa, is hunting for acquisitions in Canada's tar sands, home of the world's second-largest crude deposits outside Saudi Arabia, according to two people involved in the search.

Magna fell 3.9 percent to C$33.52. The Obama administration ousted General Motors (GM) CEO Rick Wagoner and ordered GM and Chrysler LLC to overhaul their recovery plans if they are to get further taxpayer aid. Bankruptcy may be the best option for the automakers, an administration official said.

Canada extended deadlines for both companies to work on their restructuring plans and said it would not provide long-term loans until the overhaul is complete.

Research In Motion Ltd., maker of the BlackBerry phone, lost 1.9 percent to C$54.78. Efforts to attract more buyers through advertising and improved devices have eaten into the company's gross profit margins, which have fallen to 40 percent from about 50 percent in the past six months, the Wall Street Journal said.

FNX Mining Co. sank 14 percent, the most in the S&P/TSX, to C$4.17. The copper and nickel explorer reported a fourth-quarter loss of 49 cents a share, worse than the average analyst estimate from a Bloomberg survey.