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TORONTO (Reuters) - Canada's upcoming federal budget will use the same growth forecasts as those included in the budget proposed in March, prior to the May 2 election, Finance Minister Jim Flaherty said on Tuesday.
"Private sector economists agreed today that the average forecasts provided in the March survey and used in the March 22 budget remains a reasonable basis for fiscal planning for the June updated budget," he told reporters in Toronto.
Flaherty presented his budget in Parliament on March 22 just before the minority Conservative government was toppled, forcing an election. The party was re-elected with a majority, ensuring the budget will pass this time.
The government plans to reintroduce the budget on June 6, restating commitments made in March and adding a couple of promises made during the election campaign.
Flaherty's meeting with private sector economists in Toronto came the same day the Bank of Canada warned that it would eventually have to lift borrowing costs if the economy continues expanding, introducing some hawkish language that caught many in the market off guard.
"What we've been saying for really quite a long time now is interest rates will go up. The question is the timing of the increases in the interest rates. So consumers ought to bear that in mind when they assume debt obligations," Flaherty said.
He added that, especially with residential mortgages, Canadians should make sure "that they don't take on more than they can handle with higher interest rates in the future."
Writing by Jeffrey Hodgson; editing by Rob Wilson