Finance minister talks of ‘prudent’ spending, tax relief in pre-election budget

The Canadian Press
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With a multibillion-dollar surplus just around the corner, federal Finance Minister Joe Oliver suggests the spending tap is about to be slowly turned back on in Ottawa — just in time for a general election.

Joe Oliver. — Photo by The Canadian Press

After years of austerity budgets under predecessor Jim Flaherty, when the Harper government ran deficits in the wake of the 2008 recession, Oliver is talking about “prudent spending,” paying down debt and trimming taxes.

Next year’s spending plan — Oliver’s first since taking over the Finance portfolio earlier this year after Flaherty stepped down — is expected to be the first surplus budget in seven years.

Kicking off a summer retreat at a quaint country resort in Wakefield, Que., not far from Parliament Hill, Oliver hinted Tuesday that the package would include income tax cuts and other tax reductions, thanks to an expected $6.5-billion surplus.

“I’m talking about reducing taxes for Canadian families and individuals, yes,” he said in response to a question about whether he plans to cut income taxes.

“We’ll also be able to look at individual areas where prudent spending will be appropriate, and of course reducing the debt is another issue we’re going to be examining.”

Ottawa recorded a $10.3-billion surplus in 2007 before the world economy turned Canada’s books red in the form of a $6.1-billion dollar shortfall the following year.

In 2009, that deficit ballooned to a record $58.2 billion as the government tried to fuel job creation.

The annual summer economic retreat is billed as an opportunity for the finance minister to gather information in preparation for his fall economic update and the budget in the spring.

The two-day gathering saw a pared-down list of just 16 invited guests, including the heads of investment firms, big retailers and resource companies, economists and one newspaper columnist.

Many invitees were unavailable due to conflict schedules over the summer holidays, said Oliver, who dismissed suggestions that the guests might have been chosen on the basis of their political leanings.

Officials said the minister was seeking ideas on how to create more jobs, along with feedback on the government’s current fiscal plan.

Prior to the start of the meeting, Oliver said he’s not overly concerned about Canada’s ability to create jobs, nothing that the improving U.S. economy is expected to help the job-creation effort north of the border.

 

Job numbers mistake

Not long after Oliver’s remarks, Statistics Canada admitted Tuesday that it made a mistake in its most recent job numbers, which said just 200 new jobs were created in July, a figure well short of expert expectations.

The agency said a revised report would be issued Friday.

“Taking the very rare step of issuing a formal correction ... suggests that this will not be a minor revision,” Scotiabank said in a note to its clients.

Oliver also said Tuesday that he saw no immediate concerns about a potential downward correction in Canada’s housing market.

“We’re monitoring the market carefully, but are not alarmed by what we see.”

When it comes to spending, Oliver said he’s prepared to sign more cheques for building and repairing roads and other infrastructure.

But he suggested that kind of spending would come slowly. And he sounded unenthusiastic about the Ontario government’s call to spend billions more on transit and other projects.

Ontario Premier Kathleen Wynne is urging the federal government to commit two per cent of Canada’s GDP to infrastructure projects across the country.

For Ontario alone that would amount to $12 billion per year.

“We understand the importance of dealing with aging infrastructure,” Oliver said.

“When I heard from the premier of the province of Ontario that they wanted an additional $12 billion — which if you extrapolate that to the whole country is an additional $30 billion, driving us into a massive deficit — that’s not the way this government will go.”

Oliver did say the federal government would increase transfers to the provinces and territories for health care and other expenditures.

 

By Terry Pedwell

THE CANADIAN PRESS—WAKEFIELD, Que.

Organizations: Statistics Canada, Scotiabank, Terry PedwellTHE CANADIAN PRESS

Geographic location: Canada, Wakefield, Parliament Hill Ontario Ottawa U.S.

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  • taxpayer 22
    August 13, 2014 - 14:24

    it doesn't matter who we elect anymore. when it comes to our money all 308 of these mp's are buddy-buddy. their only goal and only goal is these pensions they will collect for little or no service to taxpayers. Bruno is right. politics in Canada as become a laughing stock of the world, and in my opinion "CORRUPT"

  • Bruno Brown
    August 13, 2014 - 11:05

    Get ready for a lot of carrot dangling with the coming election,why do we get all these phony promises at election time,? I'm ashamed of our politics in Canada, laughing stock of the world.

    • Dolf
      August 13, 2014 - 16:55

      Fire trucks are our coin of the realm Bruno. Newfoundlanders will turn over their votes for 'em faster than blacktop. Our one time pride has degenerated into what's in it for me. Sad legacy.