TORONTO (Reuters) - Canada’s main opposition Liberal Party struck a more upbeat tone on Monday about co-operating with the Conservative government after legislators from both parties met to address concerns on the state of the country’s finances and fiscal plans.
Liberals Scott Brison and John McCallum met in Toronto with Finance Minister Jim Flaherty, asking him to produce an “honest” set of fiscal projections, including a list of assets the government plans to sell and revised growth forecasts.
“What we said was that the fiscal update said that there was a C$100 million ($81 million) dollar surplus,” said McCallum. “This is a number that nobody believes now, because the growth outlook is far worse -- and there is the asset sale issue -- so in that context, we certainly believe, and Mr. Flaherty did not disagree, that the Canadian economy is in deficit for the year coming before taking any fiscal action.”
The Liberals have turned up the heat on the minority Conservative government to produce a budget early next year that meets with their demands for increased stimulus spending. Liberal leader Michael Ignatieff and the other two opposition parties have threatened to bring down the government if it fails to address the economic downturn.
McCallum and Brison said the meeting with Flaherty was “productive and businesslike,” and they hoped it would be the first of many.
“All of us understand that Canadians want us to be constructive because Canada, right now, is going through one of the most serious economic difficulties in any of our lifetimes,” said McCallum.
Flaherty’s November fiscal update was widely criticized by economists for apparently bending over backwards to show balanced budgets in coming years at a time when most experts agree that temporary deficits are legitimate to help pull the country through a recession.
Flaherty had predicted sales of nonfinancial assets would bring in revenues of C$4.3 billion ($3.5 billion) in 2009-10 and C$10 billion altogether over the next five years. He said he expected additional savings to result from a review of all government spending.
“Before we develop honest stimulus measures, we need to base those numbers on an honest fiscal assessment, and we’re hoping that Mr. Flaherty comes back to us with honest fiscal numbers that we can depend on and a real plan around asset sales that we can see, as opposed to taking on blind faith,” said Brison.
The Liberals are demanding a detailed list of assets that will be put on the block. Otherwise, the transactions should be removed from the outlook, they said.
On the government’s plans for fiscal stimulus, they asked Flaherty for details on the scale of the package and a timetable.
The Liberals also requested updated growth projections, which are based on private sector forecasts, but which they say are too rosy. They said they were hoping for the information by Friday.
Canada’s parliamentary budget officer has requested details on the Conservatives’ planned spending cuts and asset sales.
Additional reporting by Louise Egan; editing by Rob Wilson