Slower growth could set back Ottawa’s balanced budget plan by two years: TD
Posted Oct 27, 2011 02:38:33 PM.
This article is more than 5 years old.
OTTAWA – A new analysis by the TD Bank concludes the federal government may need an two extra years to balance the budget.
The TD Bank study is the first since the Harper government pledged during the election campaign to eliminate the deficit in the fiscal year 2014-15.
The bank (TSX:TD) says that given the marked slowdown in the economy and prospects for more modest growth going forward, Ottawa is likely to still be $5.2 billion in the hole that year.
It projects the deficit will shrink to $1.8 billion the following year, when Ottawa is counting on a $4.2-billion surplus.
Earlier this week, Finance Minister Jim Flaherty fudged on whether he still planned to eliminate the deficit in four years, choosing instead the softer target of the medium term.
TD economists say the longer timeline should not set off alarm bells since deficits of a few billion dollars are tiny relative to the size of the economy.
