Canada's projected deficit drops to $5.2 billion from $16.6 billion
Prime Minister Stephan Harper predicts a surplus in 2015, just in time for the election.

thestar.com
Oct. 2, 2014
By Bruce Campion-Smith

Prime Minister Stephen Harper says his government is on track to deliver promised tax breaks thanks to a deficit that is far lower than expected.

Harper revealed Thursday that the government is now projecting the deficit for 2013-14 will ring in at $5.2 billion, far lower than the $16.6 billion previously estimated.

“It means we are clearly returning to a balanced position,” Harper said, adding that it’s a “certainty” the government will show a surplus in 2015.

“The government has no plan or intention to move this year into a surplus,” Harper said, saying that a small deficit was predicted this year.

The February budget had forecast a $2.9 billion deficit for 2014-15, or almost even once a $3 billion rainy day fund was added in, and a surplus of $6.4 billion the year after.

But Thursday’s numbers show the government is on track to notch a sizeable surplus in 2015, allowing the Conservatives to move on tax breaks pledged in the last campaign just as they prepare to go to the polls next October.

“We also intend ... to move quickly to implement promises that we made to Canadians in the last election,” Harper said in a televised luncheon address to a Brampton business audience.

In the 2011 election campaign, Harper promised the Conservatives would introduce income-splitting, which would allow couples with young children to share up to $50,000 for income tax purposes. But he said the promise would have to wait until the budget is balanced.

The prime minister said that some of the factors that helped the bottom line were temporary while others are permanent, such as cuts to government programs and spending.

Harper said a balanced budget will allow the government to “sustain the much lower tax rates that we have brought in.”

As well, sound finances give the federal government the ability to respond with stimulus measures as it did in 2008-09 to blunt the impact of the recession, the prime minister said.

He said a balanced budget allowed the Conservatives to ramp up spending without falling into a “spiral of deficits, debts and interest rate hikes.

“It maintains our ability to respond aggressively with government spending if we ever had a situation that once again needed extraordinary measures,” he said.

While the nation is waiting for Harper to announce the country’s next military moves in Iraq, the discussion in Brampton was focused solely on the economy.