Canadian Prime Minister Stephen Harper said uncertainty in the global economy has become the “new norm” and the government’s primary objective is to sustain the recovery, not balance the budget.
Speaking in an interview with Sun News Network, Harper said he won’t accelerate efforts to balance the budget, even though he still plans to eliminate the deficit before the next elections due in 2015.
“I want the budget to be balanced and that is the goal” before the next vote, Harper said in an interview on Sun News’ Byline with Brian Lilley program. “But our first objective is not balancing the budget, our first objective is to make sure the Canadian economy keeps growing,”
“In my judgment a gradual reduction in the deficit is the way to go if that can be managed,” he said. “I think it can be managed.”
Last month, Finance Minister Jim Flaherty said he may need to revise his deficit targets given the risks posed by the faltering global recovery.
The Conservative Party government’s 2013 budget will keep “taxes low and deficits coming down,” Harper said.
While he said he always expected the recovery to be slow, Harper said he hadn’t anticipated the global economy would suffer from such a prolonged period of uncertainty, which right now is primarily emanating from Europe.
He said there are risks fiscal strains could also undermine the U.S. economy, and cited a broad consensus that policy makers in the world’s biggest economy “must take a series of difficult measures across a range of policy actions.”
There is “not a lot of certainty south of the border either,” Harper said. That’s why Canada needs to diversify its economic relations to countries such as China, he said.
Harper said he raised concerns about imbalances between the two countries in a meeting with Chinese President Hu Jintao last week in Russia, adding there is some evidence Canadian exports and investment into the Asian country is rising.
“We see great opportunity in this relationship and great opportunity given the expected growth of China but first and foremost we have to make sure we are protecting the interests of the country and that the Canadian side is getting our share of that opportunity,” Harper said.
Harper wasn’t asked in the interview about Cnooc Ltd.’s $15.1 billion proposed takeover of Calgary-based oil and gas producer Nexen Inc.