Canadian Finance Minister Jim Flaherty said his next budget on Feb. 11 will show a surplus of just under C$4 billion ($3.6 billion) in the fiscal year starting April 2015 and said policy makers are not attempting to quicken a decline in the nation’s currency.
There is “no doubt” the budget will be balanced in 2015, Flaherty said after meeting with private-sector economists who provide him with forecasts that shape the plan. “We know we are on track to balance in 2015-16.” He didn’t estimate the deficit for the current fiscal year.
Prime Minister Stephen Harper and Flaherty have made balancing the budget a key part of preparations before the next election in 2015, touting it as a symbol of Canada’s strength relative to deficits in the U.S. and Europe, while delaying other tax cuts and benefits until there’s a surplus. Flaherty signaled today there won’t be a rush of new programs, saying, “I’m not going to spend a lot of money, but I’m not the only person who makes these decisions.”
Canada’s dollar was 0.1 percent weaker at C$1.1095 per U.S. dollar at 3:04 p.m. in Toronto. The currency dropped to the lowest since 2009 this month after comments by Flaherty, Harper and Bank of Canada Governor Stephen Poloz about the currency’s weakness. Flaherty denied today those comments were part of a plan to accelerate the depreciation.
“The Canadian dollar is a market currency and it moves in response to market forces,” Flaherty said. “You know I never talk about the Canadian dollar.”
Flaherty also said in response to a question that the health troubles he disclosed last year aren’t impairing his work, and said his health has improved since then. “Things are much better actually, thank you for asking,” he said.
Flaherty’s fiscal update from November projected a deficit of C$17.9 billion in the year ending March 31 that narrows to C$5.5 billion in fiscal 2014-15, and then a C$3.7 billion surplus in 2015-16.
Flaherty told lawmakers that his budget “will continue our government’s focus on keeping Canada’s economy stronger by introducing positive measures to grow our economy, create jobs, keep taxes low and return to balanced budgets in 2015.”
Canada could report a budget surplus a year ahead of schedule, because the C$5.5 billion deficit forecast includes C$3 billion of money set aside for economic risks, said Craig Wright, chief economist in Toronto at Royal Bank of Canada.
“We wouldn’t be shocked to see them come into balance that year if they chose to,” Wright told reporters.