Finance minister talks of 'prudent’ spending, tax relief in pre-election budget
WAKEFIELD, Que. — With a multi-billion 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.
After years of austerity budgets under predecessor Jim Flaherty, when the Harper government ran deficits in the wake of the 2008 recession, Oliver is now talking about “prudent spending,” paying down debt and trimming taxes.
Next year’s spending plan — Oliver’s first since taking over the finance role earlier this year in the wake of Flaherty’s sudden death — 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.
Ottawa last 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.
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.”