Toronto — The government will determine how much spending restraint is required to balance the budget once economic recovery is entrenched, the federal Finance Minister says.
Speaking in Toronto Friday, Jim Flaherty said Ottawa will look to make cuts in the $100-billion of federal program spending rather than to raise taxes or cut major transfers to the provinces when the time comes to balance the budget.
That program spending is growing at more than 3 per cent per year and can be restrained if necessary, Mr. Flaherty said.
The government will reject demands to make permanent the temporary or “extraordinary” stimulus measures it has taken, he added.
Mr. Flaherty said that, at this point, the government is less than one year into its two-year plan for the economy. Uncertainty about how the global economy will unfold is making fiscal planning beyond 2011 challenging, because the Canadian economy's fortunes are tied to the global recovery.
Mr. Flaherty attempted his most thorough explanation to date of how Ottawa intends to deal with the deficit.
