OTTAWA (Reuters) - Canadian Finance Minister Joe Oliver insisted on Monday that the government would balance next year’s budget despite falling oil prices and said the country’s economy would outperform most of its rivals.
Oliver, who says the oil price plunge will not overly harm the economy, is under pressure from opposition legislators who say his reassurances lack credibility. Crude prices have sunk by more than half from their peak last June.
Oliver, who has consistently said Ottawa will balance the books in the 2015/16 fiscal year, announced abruptly on Jan. 15 that he would push the date of the budget at least until April so he could better judge the effects of lower revenues.
“We will balance our budget,” he told the House of Commons.
Oliver added that “our growth will be better than that in most countries in the Group of Seven,” and said lower oil prices would help the manufacturing sector.
Although Oliver told legislators that the government would not be cutting expenditures, he later amended his statement, telling reporters that “we are not planning any major cuts”.
He declined to comment on the slide of the Canadian dollar, which has weakened some 17 percent against its U.S. counterpart since June, when oil prices began falling.
Oliver also told reporters that Ottawa might need to dip into its C$3 billion ($2.4 billion) contingency fund - which is set aside for unexpected events - to help balance the budget.
Separately, the minister responsible for federal government spending said Ottawa would be able to eliminate the deficit without slashing spending as it did in the wake of a major stimulus program introduced after the 2008-09 recession.
“There is no plan for a new deficit reduction action plan similar to the one I engaged in 2011-2012,” said Treasury Board Minister Tony Clement, the cabinet minister responsible for federal government spending.
Clement told reporters that his department would continue to examine programs to see if there was a way of delivering services at lower costs.
Additional reporting by Randall Palmer and Mike De Souza in Ottawa and Solarina Ho in Toronto; Editing by Alan Crosby, Jeffrey Benkoe and Andrew Hay