TORONTO (Reuters) - Canada’s Liberal government believes the federal budget will be balanced in “about” five years due to higher growth spurred by deficit spending, Finance Minister Bill Morneau said on Sunday.
Speaking on CTV’s “Question Period” political news show, Morneau said the budget unveiled on March 22 will bring economic growth that the government hopes will eventually cancel out the C$17.7 billion ($13.34 billion) deficit projected for 2019-20, the fiscal year by which the Liberals promised to return to surplus.
“We believe the growth will be higher, and we believe that we will be able to get into a balanced budget in about the five-year timeframe,” he said.
In the election last year, the Liberals campaigned on running three years of deficits of up to C$10 billion before balancing the books by fiscal 2019-20. But the current budget projected a C$29.4 billion ($22.5 billion) deficit for 2016-17, nearly three times higher than what was promised.
The budget includes C$3.97 billion in infrastructure spending for the coming fiscal year, a major plank of the Liberal campaign.
The government gave no target date for eliminating the deficit when it unveiled the budget. Morneau had said the Liberals would be able to balance the books in five years only if the stimulus generated growth at the top range of forecasts.
Prime Minister Justin Trudeau told the Canadian Broadcasting Corp the year by which the budget will be balanced “depends entirely” on growth.
Reporting by Ethan Lou in Toronto; Editing by Dan Grebler