Bloomberg News

Harper Says Plans Balanced Budget Before Canada Election

November 16, 2012

Canadian Prime Minister Stephen Harper said he plans to eliminate the federal budget deficit before the next election due in 2015, comments coming days after his finance minister projected a deficit for that year.

“It remains the government’s plan, intention, to balance the budget prior to the next federal election,” Harper said at a press conference today in Quebec City. “The recent economic and fiscal update by the minister indicates we are actually very close to that objective.”

Finance Minister Jim Flaherty on Nov. 13 updated his forecast to delay a balanced budget by one year and projected a C$1.8 billion ($1.8 billion) deficit for the period starting April 2015. In New York about an hour after Harper spoke, Flaherty said he and Harper are on “the same page” about the 2015 deficit goal and “we are very close” to meeting it.

The budget projection for 2015 includes a C$3 billion cushion to guard against the risk of a weaker economy, Flaherty said. “Our intention is to balance the budget before the next election, we are very close now, I hope we will get there,” Flaherty told reporters on a conference call.

“These numbers aren’t written in stone, things change,” he said.

Income Splitting

In last year’s elections, which returned Harper to power with his first majority government, the Conservatives pledged to eliminate the deficit by 2014 and introduce new measures such as income splitting for families once the government began to run surpluses.

Harper said earlier today that Flaherty’s reduced budget projections reflect a drop in revenue on “the recent slowing of the global economy,” and plans to curb spending are “on track.”

The government has cut its payroll by 10,980 positions in the six months since the last budget targeted a reduction of 19,200, Treasury Board President Tony Clement said in a statement today. About 7,500 of the positions have been eliminated through attrition, greater than an original target of 7,200.

“A leaner, more affordable government is good for taxpayers and it’s important in terms of our ability to return to balanced budgets,” Clement said in the statement.

To contact the reporter on this story: Greg Quinn in Ottawa at gquinn1@bloomberg.net

To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net


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