OTTAWA — Canada’s record $53.8-billion deficit may turn out to be even worse than projected, Finance Minister Jim Flaherty says.
Flaherty told reporters Wednesday that the deficit for the 2009-2010 fiscal year with be definitely “north of $50 billion” and could be above the forecasted $53.8 billion.
Analysts had been expecting that last year’s shortfall — yet to be calculated — would be considerably less because of the strong economic rebound that occurred late last year and in the first quarter of 2010.
The last departmental report for the fiscal year had placed the shortfall at about $47 billion.
But Flaherty said unaccounted for payments Ottawa must make to provinces that have adopted the harmonized sales tax will throw the calculations out the window.
“We made some payments on HST to the provinces and we may have to account for that fully in one year. If we do, it will bump the number up,” the finance minister said.
He gave no details on how much those HST payments will cost Ottawa.
In July, Ontario and British Columbia both adopted a harmonized sales tax, which replaces revenues on industry inputs and places an additional tax burden on consumers.
But Liberal finance critic Scott Brison doesn’t accept the HST is entirely to blame, noting that the government spent more than $1 billion on staging the G20 summit in Toronto.
“The reality is the massive deficit we have is due to Conservative out-of-control spending,” he said.
Flaherty said the government is committed to eliminating the deficit and that the two-year, $47-billion stimulus plan introduced in 2009 will be phased out at the end of next March.