OTTAWA (Reuters) - Canadian business leaders pressed Prime Minister Stephen Harper on Monday to present a credible plan for getting rid of the country’s record budget deficit.
“It needs to be one that’s workable and realistic and detailed,” Perrin Beatty, president of the Canadian Chamber of Commerce, said after participating in an economic roundtable that Harper had called.
Canada has budgeted a C$55.9 billion ($54.3 billion) deficit for the current fiscal year, the largest in absolute terms though not in comparison with the size of the economy.
The Conservative government says half of that will disappear next year just by winding down its economic stimulus, but opposition parties disagree with the government’s contention that economic growth will bridge most of the rest of the budget gap.
Beatty joined the head of the Canadian Federation of Independent Business, Catherine Swift, and the head of the Canadian Council of Chief Executives, John Manley, in giving their views on what the government should do in the new year.
Swift said it was important that Canada not slip back into “permanent deficit mode”.
The consensus appeared to have been that Canadian business was more optimistic this year than last year, even if Swift described the current outlook as a “plodding recovery”.
They told Harper the stimulus program should continue to the end of its two years in March 2011, but not beyond. “The consensus was, ‘Don’t cut it off at this stage...but nothing more’,” Swift said.
The executives also told Harper that problems in the U.S. economy showed the need to expand and diversify trade beyond the United States, though Swift said that geographic reality means that U.S. trade will always dominate.
Harper spokesman Dimitri Soudas told Reuters that these issues are key priorities that the government has been working on. “The stimulus plan is time-limited,” he said. “On diversifying our trade, we have pursued a ...very aggressive approach toward opening Canada’s economy to other economies.”
The business groups also expressed concern about the possibility of sustained rises in employment insurance premiums, which are temporarily on hold as part of the stimulus package.
And Swift pressed Harper on the need to make government pension plans, under which employees can retire much earlier than private-sector workers, less generous.
Editing by Peter Galloway