Canada Says Budget Plan to Be Delayed as Crisis in Europe Hurts Growth

Published: Tuesday, November 8, 2011 at 10:23 p.m.

Last Modified: Tuesday, November 8, 2011 at 10:23 p.m.

TORONTO | Canada's finance minister said Tuesday his goal of eliminating the deficit will be delayed as the economic crisis in Europe hurts growth.

Finance Minister Jim Flaherty said it will take one or two more years to completely eliminate the deficit that reached as high as $55.6 billion following the severe economic downturn that began in the fall of 2008.

The government previously had pledged to balance the budget by 2014-2015.

Flaherty said conditions are darkening again and becoming more precarious. "We have to be flexible and pragmatic given the global situation, particularly the situation in Europe," Flaherty said.

He said worsening economic conditions will add almost $16 billion to the deficit in the next two years. Canada estimated its deficit at $33.4 billion in 2010-11, or 2.1 percent of Canada's gross domestic product. The deficit is expected to be $31.2 billion in the 2011-12 fiscal year.

Flaherty reiterated that Canada should maintain its fiscal advantage over other nations.

Canada's commodity-rich economy has experienced a better market rebound than its fellow G-7 nations, amid trouble elsewhere, such as the European debt crisis and weak economy in the United States. There was no mortgage meltdown or subprime lending crisis in Canada, and its banks are rated among the soundest in the world.

Source: http://www.theledger.com/article/20111108/news/111109381

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