OTTAWA (Reuters) - Canadian Prime Minister Stephen Harper said on Thursday he hoped to balance the federal budget before the next election in October 2015 but his top priority was to make sure the economy continued to grow.
“We have to go on financial circumstances. Look, I want the budget to be balanced and that’s a goal in this Parliament. But our first objective is not balancing the budget, our first objective is to make sure the Canadian economy keeps growing,” he said in an interview on Sun News Network’s “Byline with Brian Lilley” program.
“In my judgment, a gradual reduction in the deficit is the way to go if that can be managed, and I think it can be managed, so that’s the route that we’ll continue on.”
The most recent federal budget set a target to bring the budget into surplus in the fiscal year that starts on April 1, 2015.
He estimated that the deficit is currently C$24 billion to C$25 billion ($24.7 billion to $25.8 billion), which is relatively tiny by comparison with the U.S. federal deficit but still quite large by fiscally conservative Canadian standards.
The prime minister, interviewed in his office, said that while he had expected the recovery would be slow, he had not seen the high level of uncertainty, stemming largely from Europe’s intractable economic difficulties and the U.S. “fiscal cliff” approaching at the end of this year.
The fiscal cliff refers to tough legislative decisions that must be made in Washington on whether to extend expiring low tax rates or make deep spending reductions that could pinch economic growth.
“I’m sort of coming, and I think many Canadians are coming, to see a lot of this uncertainty as the new norm,” he said, adding that Canadians should not fret too much about week-to-week uncertainties in other countries over which Canada had limited control.
“We have to make sure that we just look past and beyond these troubles and position Canada well for the very radically changed economy we see emerging in the future.”
Harper has put a high priority on expanding trade and improving relations with faster-growing areas, especially Asia, in light of expectations of only tepid growth in traditional markets in the United States and Europe.
Reporting by Louise Egan and Randall Palmer; editing by Philip Barbara