TORONTO (Reuters) - The Conservative Party plans to present a $40 billion (US$ 34 billion) deficit, the highest since 1993, in the federal budget to be unveiled this month, CTV television reported.
Finance Minister Jim Flaherty said on Thursday that Canada will run a “substantial” budget deficit in the next fiscal year as it enacts stimulus measures to help shelter the economy from the effects of the global economic downturn.
The minority Conservative government is preparing its budget, due to be presented on January 27, and has said it is prepared to end a 12-year string of budget surpluses and inject C$20 billion to C$30 billion of stimulus into the economy.
A $40 billion budget shortfall would be $10 billion more than Prime Minister Stephen Harper indicated in a late 2008 interview with CTV, CTV reported late on Friday.
“We’ll take big, comprehensive actions. We’ll assume that we’re probably going to have to look at a period of three to five years of such actions,” Harper said on Friday, adding that it would not necessarily take that long to see an economic recovery.
Harper, whose minority Conservative government came close to being defeated in Parliament late last year, called on the opposition parties to work closely with him on a fiscal stimulus plan.
Writing by Alden Bentley