Canadian PM says budget deficit to be much less than forecast

Thu Oct 2, 2014 3:21pm EDT
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By Andrea Hopkins

BRAMPTON Ontario (Reuters) - Canada's budget deficit for the 2013/14 fiscal year is likely to be C$5.2 billion ($4.6 billion), rather than the C$16.6 billion forecast in February, Prime Minister Stephen Harper said on Thursday.

Harper told a business audience the improvement was due in large part to one-off factors, but did not give details. He said Canada would run a small deficit in the 2014/15 fiscal year before returning to surplus in 2015/16.

"It obviously means we are clearly returning to a balanced position," he said,

"Some of the improvement here, a significant part of it, is due to one-time factors. So you won't see all of this projected into the future, but some of it clearly will be."

Harper said the government would move quickly to implement promises made in the last election campaign in 2011.

Harper's Conservatives, who face an election in October 2015, pledged that once they balanced the budget they would allow couples with children to split their income for tax purposes.

This would particularly help couples where one adult was a high earner paying the maximum tax and the other was bringing in not much money. The couple would each declare half their overall income and be taxed at a lower rate.

The 2011 Conservative platform estimated income splitting, which would apply to couples with children under 18, would cost the government C$2.5 billion annually.   Continued...

Canada's Prime Minister Stephen Harper speaks during Question Period in the House of Commons on Parliament Hill in Ottawa October 1, 2014. REUTERS/Chris Wattie