June 17, 2009 / 8:17 PM / 9 years ago

Canada forestry aid already budgeted --Flaherty

* Says C$1 bln forestry aid package included in budget

* Says aid package will not further inflate deficit

TORONTO, June 17 (Reuters) - Canadian Finance Minister Jim Flaherty said on Wednesday a C$1 billion aid package for pulp and paper producers is already included in the government’s budget.

Last week, the government said the country would run a C$50.2 billion ($44.4 billion) budget deficit this fiscal year, as it pumps billions of dollars into the auto sector and helps fund infrastructure projects designed to restart growth.

The C$50.2 billion deficit was well above the C$33.7 billion deficit predicted in the January federal budget.

Earlier on Wednesday, Ottawa tossed a C$1 billion lifeline to its pulp and paper producers, who complain they are drowning financially because of a tax windfall for their American rivals. [ID:nN17298021] ($1= $1.13 Canadian) (Reporting by Euan Rocha; Editing by Frank McGurty)

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