Canada set to introduce balanced budget law

Tue Jan 14, 2014 8:58am EST
 
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By Leah Schnurr
    TORONTO, Jan 14 (Reuters) - Canada's upcoming federal budget
will follow through on a promise to introduce legislation
requiring balanced budgets and a two-year spending freeze on
government operating spending, the country's junior finance
minister said on Tuesday.
    Kevin Sorenson, secretary of state for finance, said in a
speech that after the budget deficit is eliminated, a goal set
for 2015, the Conservative government would look at more tax
cuts and other forms of support for businesses. 
    "Like its predecessors, (the federal budget) will continue
to focus on controlling spending and using every tax dollar as
efficiently as possible," Sorenson told a business audience.
    "And we will enshrine our responsible, prudent approach into
law, with the introduction of balanced budget legislation," he
said.
    The promise of legislation requiring governments to run a
surplus except in times of economic crisis was first made in a
major policy speech on Oct. 16, along with the vow to freeze
spending temporarily. 
    Canada is one of a handful of countries with a prized
triple-A credit rating from leading agencies, and barring any
major economic upsets the government looks set to make good on a
promise to eliminate its small fiscal deficit before the next
election in 2015.
    The Conservatives ran up huge deficits following the global
financial crisis, amounting to 3.6 percent of gross domestic
product in 2009-10.
    The gap is currently at about 1 percent of GDP, but Sorenson
warned that "an uncertain and fragile global economy" could
still derail Ottawa's plans.
    Finance Minister Jim Flaherty is aiming to present the next
budget in early February, officials have said, but the exact
date has not been confirmed.
    Sorenson said the budget would freeze government operating
spending for the 2014-15 and 2015-16 fiscal years and review the
government's corporate assets for items it could potentially
sell. 
    Once the government is back in the black, he said it would
consider further tax cuts, although he did not give details.
    "That includes looking at further tax relief and new ways to
provide support to businesses like yours, following the return
to a balanced budget," he said.