Canada charts comfortable course to 2015 budget surplus

[Rich Little]

Look upon our fiscally-sound nation - and despair at the reality of yours.

=================================

Feb 11, 2014

OTTAWA (Reuters) - Canada's Conservative government looks set to comfortably balance its books in 2015 or even sooner, its latest budget showed on Tuesday, with cuts in spending on the public service more than offsetting a series of modest new expenditures.

The low-key spending plan leaves Prime Minister Stephen Harper well-positioned to offer tax breaks and other initiatives in the runup to an election scheduled for October next year.

"Some people will say this budget is boring," Finance Minister Jim Flaherty told reporters ahead of the budget speech. "Boring is good."

The budget shows a deficit of C$2.9 billion ($2.63 billion) in the

2014-15 fiscal year, up from the previous estimate of C$5.5 billion. That balance includes a C$3 billion contingency fund, which in fact reveals an underlying surplus that year.

Flaherty acknowledged the budget would be narrowly balanced this coming year without the contingency fund, but said he preferred to have a "nice clean surplus next year".

The government estimates a bigger-than-expected C$6.4 billion surplus in

2015-16. In the year ending March 31 of this year, the deficit is pegged at C$16.6 billion.

The Conservatives, in power since 2006, plunged into a deep deficit in

2008 as they pumped out stimulus money to deal with the recession after having cut taxes earlier. Previously, the Canadian government had an 11-year string of budget surpluses.

The government's reluctance to go for a balanced budget in 2014 was seen as preparing for an election-friendly budget the following year.

"This is a budget designed to build a bigger war chest for the next budget," said Avery Shenfeld, chief economist at the Canadian Imperial Bank of Commerce.

He added that the government should be in a position to "have more money to give away" in 2015.

Germany is currently the only G7 country running a surplus, but Canada's ratio of debt to GDP is substantially less and it is one of a handful of countries with a triple-A rating from rating agencies.

Flaherty's budget assumes economic growth of 2.3 percent this year and

2.5 percent in 2015. It also assumes the Canadian dollar will be worth about 94 U.S. cents this year. The Canadian dollar is already weaker, at about 90 U.S. cents, and is projected to depreciate further in the coming year.

That implies growth could beat the government's estimates and ultimately improve the budget balance further.

When asked to comment on the currency's impact on the economy, Flaherty acknowledged that it was "good for exporters", adding: "I would expect there's a value to the dollar inherently, around which it will settle and we'll see what that is."

MONEY FOR AUTO SECTOR

With the U.S. economy looking healthier and likely to boost Canada's fortunes, the budget contained few measures to provide extra stimulus. It outlined plans to help push down consumer prices on wireless roaming, retail goods and banking services, part of a broader pro-consumer agenda aimed at winning middle-class voters (yes, - unlike the US, Canada has a healthy middle-class) also being wooed by the opposition.

It ensured an additional C$250 million a year in financial aid for the automotive sector. The government has been under pressure from Fiat Chrysler, which has asked for funding for a minivan plant, and which has said it might have to slash jobs in Canada if it doesn't get help.

The budget also provides C$28 million over two years to the National Energy Board to help it review projects such as TransCanada Corp's Energy East pipeline project, within legislated timelines.

But the fiscal cost of these initiatives is minimal compared with the cost-cutting steps announced.

[Bert]

Offering bribes to favored parts of the electorate? That's the same route to destruction that the US is on.

[Tony Hwang]

Hi, We could balance the budget this year, guess what, there is federal election next year. Nothing but all politics.

[nestork]

Oh for Gosh sakes!

Could that be because Canada isn't spending any money getting rid of Syrian dictators that have used chemical weapons on their own people to try to silence the opposition?

The biggest reason that Canada is going to have an economic surplus is because of the development of our Athabasca tar sands.

Rich Little may be forgetting that as those Canadian tar sands are developed, the largest customer for the oil produced with be the United States.

And, I as one Canadian, would prefer Canada sell it's oil to the United States than to China, and I hope that most Americans would prefer they buy their oil from Canada than from Venezuela or Iran.

The US state department has determined that building the XL pipeline will not have a significant impact on the environment because the tar sand oil is going to be produced, sold and burned as fuel regardless of whether the pipeline is built or not. If the US doesn't buy that oil, China certainly will. The US needs the oil and Canada is willing to sell it. Shipping that oil by pipeline is safer and cheaper in the long run than by rail to any of our sea coasts or by sea to offshore destinations. So, pipelining that oil to Texas that has unused refining capacity is a natural fit. BOTH countries benefit from the production and sale of that oil, and both countries will benefit the most if the XL pipeline is built so that the oil can be transported safely and cheaply to Texas. No one wants an environmental disaster, but an environmental disaster on land is far easier to fix and clean up than one at sea. (It's just that no one sees the environmental disasters that happen out in the middle of the ocean.)

The XL pipeline is MUTUALLY BENEFICIAL to both our countries economies, just as the trade of goods has always been. In biblical times, Persia and Egypt were the wealthiest nations in the known world because of the silk road. Traders from India carried goods from India and China to Persia and Egypt where they were traded for goods from Europe and Africa. Columbus sailed west to get to CHINA and INDIA for the spices that grew there, not because of the gold they plundered from Mexico.

[nestork]

No. It was a cat that invented "clawing upholstered furniture".

It's not much, but I'd put it on par with the pet rock and roller derby.

[Home Guy]

Perpetrated by the "White Boy Posse" - a drug gang based in northern Alberta, but is seen as a "puppet gang" of the Hell's Angels.

We Canadians have you americans to thank for the Hell's Angels. Another fine export from your country.

But you have so many more mexicans and latinos in your country - and they just love to decapitate people when they get the chance. And sometimes dogs too.

Such profound and insightful wisdom you have Oren. Does your mommy know you post to usenet?

[nestork]

This is foolishness.

The only non-stupid thing about it is that at least HomeGuy is posting under his own name, which allows for clarity in communications.

Homeguy: Why? Why continuously throw your excrement at the Americans in here like an enraged chimp? Can't you see that they're all honest hard working people just trying to make a go of it just like Canadians are?

Let me apologize on behalf of my fellow Canadian, HomeGuy. We are a huge country with a small population. Your one state of California has a larger population than our whole country (38 million versus 31 million). But, rest assured that the vast majority of us are reasonable, intelligent and civil people, just like the vast majority of Americans. I hope you can see that from the reasonable behaviour of the other Canadians in there, including Clare Snyder IIRC and others.

Oren and others: I can emphathize with you, but what's needed here is for people to simply ignore HomeGuy's crap, and to not respond to it. No one in here has any penis envy, no one in here doubts for a minute that it was Canadian biker gangs that COMPETED with each other to become Hell's Angels, and neither of our countries has a monopoly on decapitations.

This link reports on how a 22 years old man, Tim McLean, was decapitated by a mentally deranged immigrant from Hong Kong, Vince Li, while on a Greyhound bus travelling through Manitoba.

What's needed here is civility, and if people can't be civil, they deserve to be ignored.