February 29, 2012 / 9:10 PM / 6 years ago

Canada budget set for March 29, cuts to be tame

OTTAWA (Reuters) - Canada’s budget will be delivered on March 29 and will contain only modest spending cuts rather than the massive reductions that some unions are anticipating, Finance Minister Jim Flaherty said on Wednesday.

The governing Conservatives say they plan to cut between C$4 billion ($4 billion) and $8 billion a year to eliminate the budget deficit by the 2015-16 fiscal year.

“This is a jobs and growth budget,” Flaherty told reporters in Ottawa. “We are on track still (to balance the budget) for the medium term. There’s been no significant change in the track.”

Opposition parties and civil service unions say they expect major cuts in both spending and jobs. There are about 285,000 people in the federal civil service.

“We have a C$265 billion budget. We’re talking about relatively small spending reductions, certainly nothing more than moderate spending reductions in a budget of that size,” Flaherty said.

“Some of the numbers I’ve read from the some of the public service unions are outrageous. I don’t know where they’re getting their numbers from,” he said.

He added: “I think most Canadians view it as realistic that we ... ask the public service to participate in the belt-tightening that the rest of the country has been doing.”

Foreign Minister John Baird - a senior member of cabinet who has many federal bureaucrats in his parliamentary constituency - told the Ottawa Sun newspaper that the cuts would occur overwhelmingly by attrition.

“We’re talking (a) one-half, 2 percent cut, 3 percent cut, potentially. So it’s fairly modest,” he said in an interview published on Wednesday, noting that 13,000 civil servants leave the federal bureaucracy every year.

A senior government official told Reuters this week that the budget would not contain exact details of how Ottawa intends to cut federal spending despite an earlier promise to do so.

“There’s not going to be, you know, intimate detail. We never have all the intricacies in the budget ... there will be enough information that it will be comprehensible,” Flaherty said.

Ottawa forecasts the government’s 2011-12 budget deficit will be C$31 billion, even though data so far suggests the shortfall will be lower. The deficit in the first nine months of the 2011-12 fiscal year, ending March 31, was C$17.7 billion.

“We have a track going forward and we are on the track. I mean it’s possible we’ll do a bit better but I think right now when I look at the numbers, we’re still on the track we were in the autumn,” Flaherty said.

Peter Julian, finance spokesman for the main opposition New Democrats, said he hoped Ottawa was “backing off from ... looking at massive cuts in services, massive cuts in jobs”.

Editing by Janet Guttsman and Peter Galloway

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