OTTAWA, March 23 (Reuters) - How soon Canada erases its budget deficit hinges on the extent of economic growth, the country’s prime minister said on Wednesday, a day after his government unveiled a budget that foresees years of shortfalls to boost growth.
The new Liberal government on Tuesday projected a C$29.4 billion ($22.46 billion) deficit for fiscal 2016-17, nearly three times larger than what has been promised during last year’s election campaign.
It gave no target date for returning to balance, with the budget still expected to show a deficit of C$14.3 billion in 2020-21, the end of the projection horizon.
Still, the figures contained a C$6 billion risk adjustment each year, meaning the deficits could be reduced more quickly than laid out if growth is stronger.
“We’re hoping to increase the growth rates of the country,” Prime Minister Justin Trudeau told CBC Radio.
“When we look at what happens with greater growth in our economy is we get to balance in the coming five years. There is a track to that if we increase the growth in the economy.”
Pressed on when exactly the budget will be balanced, Trudeau said, “That depends entirely on the kind of growth that we’re investing in and creating right now and how the economy responds.”
The Liberals were elected last October on a plan to spur economic growth after the economy fell into a brief recession last year as the oil-exporting country was hit by the plunge in crude prices.
$1 = 1.3092 Canadian dollars Reporting by Leah Schnurr Editing by W Simon