Finance Minister Says Canada Deficit Will Be More Than C$50 Billion
Canada’s budget deficit for the previous fiscal year will surpass C$50 billion ($48.5 billion), Finance Minister Jim Flaherty said today, in line with government projections for a record gap as the economy fell into recession.
Flaherty had projected in March that the deficit for the year ended March 31 would be C$53.8 billion, after the governing Conservatives implemented a stimulus package to bolster the economy and revenue fell as output contracted.
Faster-than-expected growth this year, coupled with stimulus measures that have begun to expire, suggests Flaherty may be able to lower the deficit even as he presses ahead with planned corporate tax cuts. The Canadian government forecast the deficit for the fiscal year that began in April will be C$49.2 billion.
The government said last month its deficit so far this year is “broadly consistent” with that projection.
Prime Minister Stephen Harper’s government released a fiscal plan in March that eliminated tariffs for manufacturing imports and confirmed a schedule for corporate tax cuts that Canada says will give it the lowest tax rate in the Group of Seven. The Conservatives have pledged to balance the budget within five years by controlling spending for defense, international aid and government operations.
To contact the reporter on this story: Gene Laverty in Calgary at glaverty@bloomberg.net.
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