UPDATE 2-Canada may cut spending more to tackle deficit-Flaherty

Fri Mar 1, 2013 3:38pm EST
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* Finance Minister: More gov't "sacrifice" may be needed

* Lower-than-forecast growth hitting revenues

* Expects forecasts used in budgeting to be downgraded

* Frustrated by U.S. fiscal failures; Europe a bigger threat

By Louise Egan and Randall Palmer

OTTAWA, March 1 (Reuters) - Slow Canadian economic growth means the government will have lower revenues than initially forecast in drawing up the next budget and some ministries may need to cut spending further, Finance Minister Jim Flaherty said on Friday.

He said he continues to plan to eliminate the federal government's relatively small deficit by 2015 in spite of the bigger obstacles.

"We also look at program spending, that's true too. And we can do some more tightening there if necessary," he told reporters when asked how he would adapt the budget to account for weaker-than-expected growth.

"But we start with a premise that we're going to balance the budget in 2015 and it may need some more sacrifice in budgeting among various ministries of the government," he said.   Continued...