No cuts, deficit to 2015: Flaherty
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Updated: September 11, 2009 8:25 AM
Black Press VICTORIA – Finance Minister Jim Flaherty delivered his latest financial update to a chamber of commerce audience in Victoria Thursday, an unusual move he said was prompted by opposition party talk of forcing another federal election this fall.
Flaherty revealed that the Conservative government now plans to run deficits as far as 2015, two years longer than earlier forecast. He now expects the deficit to decline to $5.2 billion by 2014-15, but would not commit to returning the country to surplus the following year.
Flanked by budget-style charts showing the latest projections for a declining federal deficit, Flaherty pledged that he would not increase taxes or cut programs to stop the swelling federal debt.
"There are those who argue that tax increases are an inevitable, even desirable way, to return to a balanced budget," Flaherty told the business audience, using a theme sure to dominate the fall sitting of the House of Commons. "This government has brought taxes down, and we will keep them down."
Flaherty also promised not to cut back the growth of transfer payments to provinces, which support ever-expanding health care spending
He pledged to complete the government's economic recovery plan, and reminded that major measures are temporary. The extension of maximum Employment Insurance benefits by five weeks is in effect this year and next year, and the home renovation tax credit of up to $1,350 only applies to purchases made before Feb. 1, 2010.
When the economic recovery is "entrenched," the federal government will then decide whether to reduce the rate of spending growth in its own programs in order to balance the books, he said. Ottawa's spending is currently planned to increase 3.3 per cent per year in the coming years.
Flaherty stressed that Canada's performance through the recession has been one of the best in the world, and said the disagreement in forecasts of private sector economists advising the government is the largest it has ever been.
"Every country in the G7 has had to go back and revise their revenue down, because the economists are saying things have deteriorated more than they were saying in January or in December," Flaherty said. "So that's a reality that we're all facing."
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