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TORONTO, April 8 (Reuters) - Canadian Finance Minister Joe Oliver will announce legislation on Wednesday committing the government to keeping a balanced budget, except under "extraordinary circumstances", the Financial Post reported.
The story, citing an unnamed government source, said the only "acceptable deficit" would be in the event of a recession or during a war or natural disaster with costs exceeding C$3 billion ($2.41 billion) in a fiscal year. (here)
A spokeswoman for the finance ministry did not immediately respond to a request for comment.
If a deficit were to occur during normal economic times, there would be an automatic freeze on departments' operating budgets, as well as other consequences, the report said.
Oliver has pledged to deliver a balanced budget on April 21 despite the economic damage inflicted by low oil prices.
The finance minister normally unveils the budget in February or March, ahead of the April 1 start of the fiscal year, but Oliver put it off to have a better sense of where oil prices would end up and their effect on the economy and the budget.
Canada is a major oil producer and exporter, and the price crash is leading to what Bank of Canada Governor Stephen Poloz estimates is a 3 percent cut to national income, with concomitant hits on federal revenues.
The budget will set the tone for the Conservative government's bid to win reelection in October.
$1 = 1.2433 Canadian dollars Reporting by Jeffrey Hodgson; Editing by Chizu Nomiyama