UPDATE 1-Canada's Flaherty says gov't on track to balance books by 2015-16

Wed Aug 21, 2013 2:27pm EDT
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By David Ljunggren

WAKEFIELD, Quebec Aug 21 (Reuters) - Canada is on track to balance its budget by 2015-16 and the Conservative government anticipates no major shift in policy or new spending cuts to achieve that goal, Finance Minister Jim Flaherty said on Wednesday.

"We will do what it takes to balance the budget in 2015-16, not for the sake of balancing the budget, but to put Canada in a position of strength so we can react adequately to any sort of economic pressure that comes from outside our country," Flaherty said on the sidelines of a policy retreat in Wakefield, Quebec.

Canada survived the recession better than most advanced industrialized economies, a fact that the Conservatives will likely wield during the 2015 election campaign. Polls show they trail the opposition Liberals led by Justin Trudeau.

The center-right, low-tax Conservatives have long trumpeted what they say is their good record on the economy. They have promised to balance the budget before the 2015 election.

The government is forecasting a deficit of C$18.7 billion in 2013-14 and a shortfall of C$6.6 billion in 2014-15.

Flaherty told reporters that anyone "looking for anything startling" from the Finance Ministry would be disappointed, also making clear he would not boost spending.

He said the government had the leeway to balance the books despite potential costs from severe flooding in the western province of Alberta in June as well as from a major train disaster in Quebec in July.   Continued...