TORONTO (Reuters) - Finance Minister Jim Flaherty on Friday vowed to resist big, new spending measures in his next budget, but said it was too early to pull stimulus away from a still shaky economy.
Flaherty used a speech in Toronto to lower any expectations that the Conservative government would either pump in new stimulus funds or, as others have suggested, shut off the tap before the scheduled deadline in March 2011.
“Today, there are some tentative signs of recovery. But even with some early positive signs, there is still little evidence of firm growth,” Flaherty said.
He later told BNN television he believed the Canadian economy could not stand on its own without the help of government stimulus.
In the prepared text of the speech, Flaherty maintained the government’s estimate of a record high budget deficit this year of C$56 billion ($52 billion) and a small deficit of C$5.2 billion by 2014-15.
Flaherty tried to head off the usual pre-budget demands from provincial and municipal governments as well as industry and lobby groups.
But the opposition Liberal Party, in a hint of the political battle to come, said the government lost its chance to invest in job-boosting green technologies and scientific innovation as well as to help students and the elderly by “squandering money on foolishness” before the crisis.
“We think Canada desperately needs, at this time of recession and economic fragility, investments to both create the jobs of tomorrow and allay the anxieties of many Canadians,” said Liberal legislator John McCallum.
The minority Conservative government needs the support of at least one of the three opposition parties to pass the budget and stay in power.
Flaherty said the government has completed only the first phase of its stimulus plan and the next budget, due early next year, would simply be about implementing the second phase -- no more and no less.
He called any proposals to change spending plans now “shortsightedness.”
“Switching gears now, at such a crucial time, would be the most misguided approach this country could take, and would clearly put our country at risk,” he said.
Flaherty said it was too early to begin tackling the deficit and the tough decisions on that would be postponed until the economic recovery had fully taken hold.
He promised not to raise taxes or limit the growth in benefits programs for individuals or transfers to other levels of government.
Writing by Louise Egan; Editing by Jeffrey Hodgson and Rob Wilson