PM Harper counting on growth in 2015, says no stimulus in budget
The Prime Minister argued the government will be injecting a "fair bit of money into the economy" this year through tax cuts and infrastructure spending
OTTAWA—Stephen Harper is making it clear that pretty much nothing will make him stray from his balanced-budget target this fiscal year.
The prime minister slammed the door on the possibility the government would open the vault for a stimulus program to help the economy, which has been hobbled by lower oil prices.
Harper’s remarks came a day after the government unloaded its multibillion-dollar stake in General Motors, a deal expected to help the Conservatives achieve their long-running pledge to balance the upcoming election-year budget.
The government isn’t contemplating stimulus because the weakened economy is still expected to grow, albeit at a slower rate than anticipated, Harper told a news conference in Vancouver.
“Embarking on a major stimulus program when the economy’s growing, and driving us back into deficit, makes absolutely no long-term economic sense whatsoever,” he said after announcing a change to the student loan program.
Harper argued the government will be injecting a “fair bit of money into the economy” this year _ even with a balanced budget _ through measures such as “very large-scale tax cuts” for families and increased infrastructure spending.
Harper has repeatedly insisted the government will erase the deficit despite the oil slump, a promise that could be key to his chances in this year’s election, scheduled for October.
In November, the government predicted a $1.6-billion surplus for 2015-16, but crude prices tumbled in the months that followed. The lower oil prices are expected to indirectly siphon billions of dollars from federal revenues.
The oil slump also forced Finance Minister Joe Oliver to take the rare step of postponing the release of the budget until April. The fiscal blueprint is usually presented in February.
Oliver said his department needed more time to get a handle on the market instability caused by the oil shock.
In hindsight, however, observers and political opponents wonder if postponing the budget until April was done—at least in part—to allow the government to put the proceeds from the stock sale on the books in the current fiscal year.
“They will do anything to create a surplus on the eve of an election,” said Liberal finance critic Scott Brison, who also thinks the Tories delayed the budget to draw attention away from the high-profile criminal trial for suspended senator Mike Duffy.
Brison said one-time asset sales only help create surplus in a single year.
NDP industry critic Peggy Nash said the timing of the GM sale seems suspect, with the budget’s release only a couple of weeks away.
The Conservatives, she added, are searching for ways to balance the books after introducing big-ticket tax breaks aimed at families.
“It seems as though the Conservatives have made a decision to sell the shares simply because it’s a politically convenient time,” Nash said Tuesday.
“Whether Canadians are getting the best deal for their investment remains to be seen.”