(Reuters) - Canada’s federal budget will show a deficit of just over C$2 billion ($1.6 billion) in the current fiscal year and will be balanced in the year starting April 1, Prime Minister Stephen Harper said on Thursday.
The budget picture for 2014/15 is slightly worse than the government had projected in its fiscal update in November, which had been predicated on a U.S. crude oil price CLc1 of $81 a barrel. On Thursday U.S. crude was trading at just over $47.
Lower oil prices are cutting into corporate revenues and investment plans, and this will translate into lower taxes.
On Nov. 12, Finance Minister Joe Oliver had projected an underlying surplus for 2014/15 of C$100 million. Harper later in November announced more infrastructure spending.
On Thursday, he said in appearance in Saskatchewan: “Last year we had a deficit of only a little over C$5 billion, which was much less than we anticipated.
“This year, we’re coming in at a little over C$2 billion, and of course in the year to come, 2015/16, we will balance the budget in Canada, and we are doing this years ahead of virtually any other developed nation.”
Reporting by Randall Palmer and David Ljunggren; Editing by Chris Reese and Leslie Adler