Newspaper article The Canadian Press

Federal Liberals Back Away from Vow to Keep Annual Deficits under $10 Billion

Newspaper article The Canadian Press

Federal Liberals Back Away from Vow to Keep Annual Deficits under $10 Billion

Article excerpt

Liberals back away from $10B deficit cap

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OTTAWA - The finance minister is highlighting three economic priorities for the new government -- but the Liberal campaign vow to cap annual deficits at $10 billion is apparently no longer among them.

Bill Morneau avoided a question Wednesday when asked about the party's promise to keep annual shortfalls under the ceiling.

Instead, he told reporters that the government will focus on its election pledges to invest in infrastructure, lower the federal debt-to-GDP ratio and balance the books in the fourth year of their mandate.

"We're going to continue to talk about those three aspects of our promises because we do want to focus on growth," Morneau said following a caucus meeting in Ottawa.

"Those were the three things we talked about in the campaign -- those are the three things we're going to continue to talk about."

The Liberals won the October election on a platform that pledged to spend billions on infrastructure projects, which the party argues will revive the lethargic economy and create jobs.

"With the Liberal plan, the federal government will have a modest short-term deficit of less than $10 billion in each of the next two fiscal years," the Liberal platform says.

"After the next two fiscal years, the deficit will decline and our investment plan will return Canada to a balanced budget in 2019-20."

During the campaign, Liberal Leader Justin Trudeau vowed to respect the $10-billion upper limit for deficits in 2016-17 and 2017-18 unless the economic situation got "radically worse."

Morneau also sidestepped a reporter's question Wednesday asking whether the current low-growth environment qualified as a major economic shock.

The finance minister's remarks came a day after the parliamentary budget office warned Ottawa was on track to run medium-term shortfalls billions of dollars higher than the Liberal forecasts. …

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