Focus on deficits, Flaherty tells Canada provinces

Thu Dec 23, 2010 6:28am EST
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By Jeffrey Jones

KANANASKIS, Alberta (Reuters) - Canadian Finance Minister Jim Flaherty said on Monday he expected almost all of the country's provinces to eliminate their budget deficits by 2015, the same target the federal government has set for itself.

The one exception is Ontario, the most populous province, which took the biggest financial hit in the recession, Flaherty said.

He and provincial finance ministers met in the Rocky Mountain resort of Kananaskis, Alberta, on Monday to discuss deficits, the economic outlook and pension reform, an area of shared responsibility.

On pensions, Flaherty cautioned against making the country's public pension plan more expensive for employers at a time of economic uncertainty.

Most of the provinces expect to run budget deficits in the 2010-11 fiscal year.

"We did agree that we would all try to move to balanced budgets in the medium term," Flaherty told reporters following the meeting. "I think virtually all of the governments would be balanced by 2015, some earlier as a matter of fact."

Ontario, which has a shortfall estimated at C$18.7 billion ($18.3 billion) this year, will likely be the laggard. But Dwight Duncan, the province's finance minister, said Ontario beat its deficit-reduction targets in the first year of a seven-year reduction plan.

The Ontario government has said officially it plans to balance its books by 2017-18.   Continued...

<p>Canada's Finance Minister Jim Flaherty listens to a question during an interview with Reuters in Ottawa December 21, 2010. REUTERS/Chris Wattie</p>