Ottawa aims to issue fiscal update in October

Fri Jul 25, 2008 12:52pm EDT
 
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TORONTO (Reuters) - Canadian Finance Minister Jim Flaherty told reporters on Friday that the government plans to present its fiscal update in October.

"We're beginning to work on the fall fiscal update," he said. We are on track and we usually do the fiscal update in October."

The update is normally a snapshot of the government's financial position, but if the October statement contains new fiscal measures, it would be a confidence motion, giving opposition parties in the House of Commons an opportunity to bring down the minority Conservatives.

On Friday, the government said it posted a deficit of C$517 million ($507 million) for April and May, the first two months of the fiscal year, as income from corporate and sales taxes fell sharply. See

That compares with a surplus of C$2.78 billion in the same two months of 2007.

Flaherty also said the economy and the budget are still on track. He has said in the past that the government will post a surplus for 2008.

When Flaherty was asked which was a bigger threat to the economy, slowing growth or rising inflation, he said he supported the Bank of Canada's view that the risks were balanced.

Bank of Canada Governor Mark Carney "said in his last rate-setting statement that the risks were balanced ... that's the view of the governor of the bank and I accept the governor's view on that subject," Flaherty said.

($1=$1.02 Canadian)

(Reporting by Frank Pingue, writing by John McCrank; editing by Rob Wilson)

 
<p>Canada's Finance Minister Jim Flaherty speaks during Question Period in the House of Commons on Parliament Hill in Ottawa June 17, 2008. REUTERS/Chris Wattie</p>