UPDATE 1-Canada ups spending plans as PM says on track to balance budget
(Adds Harper quotes, background)
OTTAWA Nov 24 (Reuters) - Canadian Prime Minister Stephen Harper, gearing up for an election next October and taking advantage of improving federal finances, announced C$5.8 billion ($5.1 billion) in new spending on Monday.
"We are ahead of track in terms of balancing the federal budget next year," Harper said in his announcement in London, Ontario. "This gives us flexibility to make additional investments ahead of schedule in a wide range of necessary federal infrastructure projects."
Harper said the new spending would go toward building or repairing federal infrastructure projects and for on-reserve schools for natives.
Melissa Lantsman, spokeswoman for Finance Minister Joe Oliver, said the money would come out of budget surpluses that are planned for the coming years, but would be accounted for over the life of the assets.
On Nov. 12, the government projected a return to a balanced budget at least by 2015-16. It sees a deficit of C$2.9 billion for the current year and a C$1.9 billion surplus for 2015-16, with a C$3 billion contingency cushion for each year.
Two weeks earlier, Harper announced C$26.8 billion in family tax cuts and benefits over six years, which took a major bite out of the projected surpluses at the time. This package was reflected in the Nov. 12 fiscal update.
Harper's main rival in the next election, Liberal leader Justin Trudeau, has called on the government to spend a lot more on infrastructure in order to boost anemic economic growth.
($1=$1.13 Canadian) (Reporting by Randall Palmer; Editing by Leslie Adler)
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