TORONTO (Reuters) - Canadian Finance Minister Jim Flaherty said on Thursday he is aiming to wipe out the federal budget deficit by 2015, in time for the next election, but cautioned the Conservative government would be flexible with that target if the economy soured.
Canada’s fiscal shortfall of 1.4 percent of gross domestic product is tiny compared to that of the United States and some other major economies. But it is a sore point for policy makers in a country that ran an 11-year string of surpluses prior to the global financial crisis.
“It remains our intention to balance the budget during this session of Parliament,” Flaherty said in the prepared text of a speech he was delivering in Toronto.
“Although we are prepared to be flexible and pragmatic should circumstances warrant — our plan is to stick to our plan: balanced budgets and low taxes,” he said.
The parliamentary session is due to end in October 2015, the same month a federal election is scheduled.
Last week, Flaherty presented a fiscal update that showed a return to balanced budgets in 2016-17, including a C$3 billion ($3 billion) contingency cushion in case the global economy worsens.
Three days later, amid criticism, both he and Prime Minister Stephen Harper were at pains to say they still intended to end the red ink by 2015.
Flaherty said on Thursday the next budget in early 2013 would continue with what he called “pro-growth initiatives” of the past year, giving as examples previously-announced initiatives to strengthen the venture capital system and to provide skills training for the work force.
He hinted there would be “much more,” without giving details.
The plan will not include tax hikes and the government will continue to look for ways to cut spending, he said.
“From the experience of Greece and beyond, Canadians know that the consequences of unsustainable finances are all too painful,” he said.
($1 = $1 Canadian)
Writing by Louise Egan; editing by Andrew Hay