OTTAWA – Finance Minister Jim Flaherty is hinting his upcoming budget will include further modest cuts in spending if they’re needed to keep the federal government on track to balance the budget by 2015.
The finance minister said the Conservatives’ will deliver on their promise to eliminate the deficit before the next election and, despite health problems, he intends to stay on the job until the goal is accomplished.
“It’s been a long road back to balanced budgets,” he said following a speech to the Economic Club. “We’re more than half-way there and we’ll be even farther there the next fiscal year and I would like to see it through to the finish.”
Although the economy is weaker than expected, “I do not see the need for additional stimulus,” he said.
Instead, he added, “We have to do more on the controlling our own spending side. But we don’t have to slash and burn, we just have to be careful about government spending.”
The minister said government revenues were also being impacted by lower-than-expected commodity prices, particularly Alberta crude, which is being shipped at a discount of up to $40 a barrel due in part to pipeline restraints.
“It is obviously a concern, not only in Alberta, but in our government about commodities prices, the price of oil,” he told reporters.
The budget is expected to include an extension and possibly a top-up of the $33 billion infrastructure program known as Building Canada which expires in 2014.
Canadian municipalities have called for a new 20-year funding arrangement, citing what they estimate is a $170-billion infrastructure deficit.
Flaherty appeared anxious to dampen expectations, pointing out that Ottawa has already made substantial investments in infrastructure. Municipalities are receiving an additional $3 billion annually from the gas tax and a GST rebate, he said.
No final decision has been made on what could be the biggest item in a lean budget, Flaherty said, but any spending commitment “will be made in the context of our current fiscal situation.”
The minister revealed last week he was suffering from a serious skin condition called bullous pemphigoid that requires him to take steroids. The medication side effects including bloating, weight gain and redness of the face.
The finance minister said the condition is not affecting his ability to do his job, adding that the budget development process this year is further ahead at this time than previous budgets.
During his speech, Flaherty gave the business audience a glimpse of the upcoming budget but without offering details.
A key theme will be to expand Canada’s labour force by additional programs to encourage aboriginal people to join the work force, attract skilled immigrants and provide additional skills and training initiatives.
Flaherty says the government is seeking to encourage all under-represented groups, including seniors and the handicapped, to join the labour force, saying the country will need them.
“We need all hands on deck,” he said. “We’re going to have terrific economic growth in Canada in the next decade.”