Canada’s Harper Targets Balanced Budgets for Re-Election

Prime Minister Stephen Harper said he would legislate an end to budget deficits and stimulate economic growth through trade and resource development in an agenda he’s counting on to secure his re-election in 2015.

Harper, who won his first majority mandate in 2011, said he will introduce laws to require balanced budgets in “normal economic times, and concrete timelines for returning to balance in the event of an economic crisis.” The agenda, which also highlighted plans to complete a European Union trade deal, was delivered yesterday in Ottawa in a Speech from the Throne that marks the ceremonial opening of a new legislative session.

“The global economy still faces significant risks from factors that we do not control,” according to the speech, which by tradition was read in the Senate by the country’s governor general, David Johnston. “We must stay the course. And sound management remains our government’s guide.”

Harper’s office said in a media advisory shortly after the speech concluded he’ll travel to Brussels today to meet European Commission President Jose Barroso with the aim of concluding the EU trade agreement.

Harper reiterated his pledge to balance the budget by 2015 and lower the nation’s debt-to-gross domestic product ratio to 25 percent by 2021, bringing debt levels to the lowest since the 1970s, as part of commitments by Group of 20 nations to establish longer-term fiscal strategies.

Finance Minister Jim Flaherty has said that the country is on track to eliminate its deficit by 2015-16 after it peaked at C$55.6 billion ($54.0 billion) in the fiscal year that began April 2009. The gap, which was C$25.9 billion last fiscal year, will narrow to C$18.7 billion this year, budget documents show.

Asset Review

Harper, 54, also pledged to freeze the federal government’s total operating budget, and make the public service more efficient, including a review of federal assets to determine whether they need to be sold.

Canada’s economy has struggled to build steam over the past year as demand for the nation’s exports slumps and business investment remains weak. Canada is also grappling with an aging workforce and lagging productivity growth.

Brazil, Russia and India have overtaken Canada’s economy, which has dropped to the world’s 11th-largest, since 2006 when Harper came to power.

Senate Scandal

A Senate expenses scandal implicating Conservative lawmakers has dogged the prime minister this year and undermined his efforts to keep the public’s focus on his economic record. Nigel Wright, a former managing director at Toronto-based private-equity firm Onex Corp., resigned as Harper’s chief of staff in May amid a police investigation following the disclosure he paid about C$90,000 ($87,200) to Senator Mike Duffy to help cover ineligible expense claims.

Although Conservatives have fallen in public opinion polls since the scandal broke, Harper continues to have an edge on economic issues, surveys show.

Canadians should be allowed to purchase individual channels from cable television providers, rather than having to buy packages, according to the speech, and the government will encourage wireless firms to lower domestic roaming fees. Harper’s administration has tussled with the country’s largest telecommunications providers -- BCE Inc., Rogers Communications Inc. and Telus Corp. -- seeking to limit their power and open the market to more competition.

Consumer Issues

Throne-speech promises also included expanding “no-cost” basic banking services and closing the gap between U.S. and Canadian prices for consumer products. “Canadian families work hard to make ends meet, and every dollar counts,” the prime minister said in the televised speech, which was given in the parliamentary chamber that houses the Senate. “While companies will look out for their bottom line, our government is looking out for everyday Canadians.”

New Democratic Party lawmaker Tom Mulcair, leader of the biggest opposition party in the country’s legislature, said Harper was attempting to “change the channel” from the Senate scandal by emphasizing measures to aid consumers.

The Conservative Party government will continue to welcome “market-oriented” foreign investment in the natural resources of Canada, home to the world’s third largest crude reserves, Harper said in the speech.

Jobs and growth remain his government’s top priorities and the nation’s prosperity depends on the “responsible development” of its resources, he said, reiterating the government had taken steps to keep key industries out of foreign-government control.

Harper said in December that Canada would permit acquisitions of oil-sands businesses by foreign state-owned enterprises only under “exceptional circumstances.”

Keystone Pipeline

His efforts to encourage resource infrastructure projects, in part by expediting environmental reviews, has faced opposition from environmentalists and aboriginal leaders, as well as some provinces. The fate of the Keystone XL pipeline -- one of the most significant projects -- remains in the hands of President Barack Obama, years after the pipeline’s plans were first submitted for approval.

The government will reduce carbon emissions from the oil and gas sector, while improving the safety of commercial tankers and requiring shippers and railways to carry more insurance, according to the speech.

“Our government believes, and Canadians expect, that resource development must respect the environment,” Harper said.

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