Falling revenues to push deficit up $5-billion to $26-billion, finance minster says
FREDERICTON, N.B.—Federal finance minster Jim Flaherty says Canada’s economy continues to show resiliency despite a high level of uncertainty in the global economy.
Flaherty’s comments come after he released an update to the government’s economic and fiscal projections, which show Canada is still on track to return to balanced budgets over the “medium-term.”
On a negative note, Flaherty said Canada will miss its deficit targets in each of the next four years, due in large part because global economic weakness has carved into commodity prices and tax revenues.
His fall economic update showed a bottom line worse than many expected, with the deficit at $26-billion, up $5-billion from the March budget forecast.
According to Flaherty, the Canadian economy has still continued to experience one of the best performances among Group of Seven (G7) nations over the recent economic recovery period.
Canada has “more than” recouped the output lost during the recession, the finance minster said, and is currently outperforming all other G7 countries in job creation.
He also noted that Canada is the only country in the G7 to have more than fully recovered all of the business investment that was lost during the recession.
Despite those positives, though, Flaherty did caution that Canada is still susceptible to the economic uncertainties abroad.
“While Canada’s economy is still growing, we are not immune to the economic uncertainty beyond our borders and the economic challenges faced by some of our largest trading partners,” he said. “Global weaknesses beyond our control today carry serious consequences for Canada that are affecting our economy and our fiscal projections.”
-With files from The Canadian Press