OTTAWA (Reuters) - A downbeat finance minister on Thursday declined to predict whether he would be able to run a surplus next year, citing the seriousness of the global financial crisis.
During the campaign ahead of last Tuesday’s election the ruling Conservatives ruled out running a budget deficit. Since winning reelection, they have suddenly become less certain.
“We’re watching what’s happening globally. This is obviously a serious situation. Events are unfolding day by day. We’re monitoring the situation closely,” a subdued Finance Minister Jim Flaherty said at a news conference.
“We’ll have to gauge where we are as we go forward and I can’t be more accurate than that at this stage,” he said when asked whether he could run surpluses beyond this year.
Ottawa says it expects a modest surplus this fiscal year. Running a deficit is considered politically dangerous in Canada, which spent several painful years eliminating a $39 billion deficit in the 1990s.
Asked about the plunging Canadian dollar, Flaherty replied: “This is an unusual time, not only with respect to the dollar, with respect to equity markets, with respect to credit markets, this is a time of remarkable volatility.”
Flaherty also said he would have to look carefully at tax-cutting commitments the government made in the last budget.
“This isn’t the time to start taking stimulus away from the economy in Canada, so I expect we’ll stay on track that way. Having said that, we have to review where we are in terms of various obligations and pressures in the next fiscal year,” he said.
Flaherty said he would release his fall fiscal update in “about a month or so”.
Reporting by David Ljunggren; Editing by Frank McGurty