UPDATE 1-Canada to present budget, sees end to deficit by 2015

Thu Mar 14, 2013 1:07pm EDT
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* Finance minister to present budget in House of Commons

* Government again says sees surplus by 2015

OTTAWA, March 14 (Reuters) - Canada's Conservative government will present its annual federal budget on March 21, and still expects to return to surplus by 2015 despite a weaker economic outlook, Finance Minister Jim Flaherty said on Thursday.

"The economists...were a little more pessimistic for this year and a little bit more for next year," Flaherty said of private sector forecasts he received last week. "But it's an interim concern, it's not a long-term concern in terms of real GDP growth."

Speaking to reporters in Ottawa, he added: "As you know, our target is to balance the budget in 2015. We remain on target."

Private sector economists last week cut their economic forecasts for 2013 due to the uncertain global environment. The government gave no actual figures.

Canada lurched into a budget deficit during the global financial crisis after 11 straight years of surplus. The federal government budget shortfall, at about 1.5 percent of the value of the overall economy, is tiny compared with that of the United States or the UK and barely registers on the radar of financial markets, which are more concerned about provincial government debt.

Some experts complain that Europe's experience with austerity shows that a single-minded focus by Ottawa on eliminating the deficit at a time of slow growth could hamper the economy further.

Federal government revenues have also taken a big hit because of the discount on prices for Western Canadian crude oil compared to imported oil.   Continued...