Liberals seek "honest" data from Flaherty

Mon Dec 15, 2008 1:14pm EST
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By John McCrank

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.   Continued...