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UPDATE 1-Canada PM Harper says on track for balanced budget this year

Published 2015-07-24, 05:34 p/m
UPDATE 1-Canada PM Harper says on track for balanced budget this year

(Adds quotes, background)
By Rod Nickel
REGINA, Saskatchewan, July 24 (Reuters) - Canada is well on
track to realize a balanced budget this year, Prime Minister
Stephen Harper reiterated on Friday, saying that an economic
slowdown caused by cheap oil prices was not the time to send the
country into massive deficits.
The government earlier this year projected a C$1.4 billion
($1.07 billion) surplus, plus a C$1 billion contingency reserve,
for fiscal 2015 which began in April.
But the drop in energy prices and the possibility that the
economy was in recession in the first half of the year has some
questioning whether the budget will be able to stay balanced.
A watchdog report earlier this week forecast a deficit of
C$1 billion for the current fiscal year, after using up the
reserve. ID:nL1N1021C7
Nonetheless, the Conservative government, heading for an
election in October, has maintained it will balance the books.
"Our budgeting is very conservative and we are well on track
to realize a balanced budget this year," Harper told reporters
on Friday.
Figures released by the Finance Department earlier this week
showed a government surplus of C$3.95 billion in the first two
months of the fiscal year. ID:nT5N0XR00X
Harper said the government's policy response has been
appropriate, pointing to spending on infrastructure and benefits
for families that he said are sustaining economic activity. Some
have suggested the government should spend more to stimulate the
economy.
"Having a bit of a slowdown because of commodity prices is
not a time to plunge the country into massive deficits or to
begin hiking taxes," Harper said. "Countries that have done that
in response end up in disastrous circumstances."
($1 = 1.3039 Canadian dollars)

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