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Layton Says Canada Needs to Debate Budget Windfalls

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June 22 (Bloomberg) -- New Democratic Party leader Jack Layton urged Prime Minister Stephen Harper to have a debate about any potential budget windfall generated by stronger growth, instead of automatically applying extra funds to the country’s deficit.

“If we find ourselves with additional resources, there needs to be a debate in Parliament,” Layton, 59, said today in an interview at Bloomberg’s Ottawa bureau.

Finance Minister Jim Flaherty yesterday released an updated economic outlook that showed the country’s nominal gross domestic product will be higher than projected in the budget over the next five years, with a C$30 billion ($29.4 billion) gain in output in 2010 and a C$24 billion improvement for 2014.

The government should look at “strategic” investments “to ensure that we have a strong economy coming out of this recessionary time,” Layton said. “It might be that we need more investment, while at the same time looking at how we can reduce some of the indebtedness by bringing down the deficit.”

Harper’s ruling Conservative party lacks a majority of seats in Parliament and must get support from at least one party to pass budgets and other legislation. The New Democrats are the smallest opposition party with 36 of the 308 seats in the House of Commons.

Canada Election

Layton, who sports a trimmed silver moustache and typically rolls up the sleeves of his shirts, has almost tripled his party’s number of seats in Parliament since becoming leader in 2003. His wife, Olivia Chow, is also a New Democratic Party lawmaker.

Asked whether his party is ready for an election, Layton said, “more than we ever have been in our history.”

“We’re financially very strong,” Layton said, citing the party’s C$5 million “self-financing” building in downtown Ottawa.

Layton in February announced he had prostate cancer and last week said “everything is shaping up to be very, very optimistic.”

In a show of support for Layton’s fight, lawmakers from all parties on March 31 wore a blue striped tie or scarf, which are sold to promote the Prostate Cancer Foundation of Canada.

Speaking on the possibility of oil companies operating in the country’s Arctic region, Layton said he’s “skeptical” a safe method for off-shore drilling can be found. The government should only permit exploratory projects if the issue is “very thoroughly studied” in public and all concerns alleviated, he said.

“We’re deeply concerned about the prospect of drilling in the Arctic, because there is literally no way to clean up a disaster in that environment,” Layton said. “Once the oil is under ice or locked in the environment there, it just simply wouldn’t be possible to mobilize either the technologies or the individuals, such as they’ve been able to do in the gulf.”

To contact the reporter on this story: Alexandre Deslongchamps in Ottawa at adeslongcham@bloomberg.net.

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net; David Scanlan at dscanlan@bloomberg.net.

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