UPDATE 2-Canada's Oliver promises balanced budget, won't cut spending

Mon Jan 26, 2015 4:02pm EST
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(Adds quotes by finance minister, background)

By David Ljunggren

OTTAWA Jan 26 (Reuters) - Canadian Finance Minister Joe Oliver insisted on Monday that the government would balance next year's budget despite falling oil prices and said the country's economy would outperform most of its rivals.

Oliver, who says the oil price plunge will not overly harm the economy, is under pressure from opposition legislators who say his reassurances lack credibility. Crude prices have sunk by more than half from their peak last June.

Oliver, who has consistently said Ottawa will balance the books in the 2015/16 fiscal year, announced abruptly on Jan. 15 that he would push the date of the budget at least until April so he could better judge the effects of lower revenues.

"We will balance our budget," he told the House of Commons.

Oliver added that "our growth will be better than that in most countries in the Group of Seven," and said lower oil prices would help the manufacturing sector.

Although Oliver told legislators that the government would not be cutting expenditures, he later amended his statement, telling reporters that "we are not planning any major cuts".

He declined to comment on the slide of the Canadian dollar, which has weakened some 17 percent against its U.S. counterpart since June, when oil prices began falling.   Continued...