OTTAWA (Reuters) - Canadian Finance Minister Bill Morneau on Tuesday effectively conceded the government could not balance the budget as quickly as promised, saying the return to surplus would be achieved over the long term.
The Liberals won power last October on a pledge to run three consecutive budget deficits of no more than C$10 billion ($7.2 billion) a year to help fund spending on infrastructure before balancing the books in 2019/20.
Morneau - who says weak commodity prices mean the economic outlook is worse than projected - told reporters the government aimed “to maintain a goal of getting to a balanced budget over the long term. We recognize that’s challenging.”
Prime Minister Justin Trudeau last week said it would be hard to balance the books on time and confirmed that the first deficit would be more than C$10 billion.
Morneau said the tough economic times meant it was doubly important to stick to the plan to invest in infrastructure.
The opposition Conservatives said Morneau’s spending would cause a damaging structural deficit.
“He’s giving himself permission to fail ... who knows what’s going to happen at the end of four years?” Conservative finance critic Lisa Raitt told reporters.
Reporting by David Ljunggren; Editing by Chizu Nomiyama and Sandra Maler