UPDATE 1-Canada sees budget surplus despite tax cuts, low oil prices

Wed Nov 12, 2014 3:39pm EST
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(Adds quotes from Oliver, opposition party)

By Solarina Ho

TORONTO Nov 12 (Reuters) - Canada will emerge from seven years of budget deficits that followed the 2008 financial crisis and show a C$1.9 billion ($1.7 billion) surplus next year, despite lower oil prices and a package of previously announced tax cuts.

Finance Minister Joe Oliver announced the projections on Wednesday in the fall update of the February budget, as parties stake out positions ahead of an election next October.

The update showed surpluses rising to C$13.1 billion by the year ending in March 2020. The government is expecting a C$2.9 billion deficit for this fiscal year.

"It is not easy to return to a balanced budget," Oliver said in a speech that took aim at Liberal leader Justin Trudeau's pledge to reverse some tax cuts if elected. "Budgets, after all, do not balance themselves."

The update takes into account a projected C$26.8 billion in family tax cuts and benefits over six years. They were announced on Oct. 30.

Scott Brison, finance critic for the Liberals, said the government was doing nothing to reverse a projected decline in growth over the next several years.

"The government's effectively emptying the wallet for pre-election tax measures," he told Reuters.   Continued...