Flaherty announces $34 billion deficit, prepared for more

Finance Minister Jim Flaherty announced the Canadian government will return to deficit spending as he tables the first recession budget in over a decade.

The budget includes stimulus spending on infrastructure projects, a home renovation tax credit, and income tax cuts for those earning less than $80,000 per year.  The government is expected to run a deficit of $33.7 billion for the 2009-10 fiscal year and $29.8 billion in 2010/11.

Flaherty said the uncertain economic outlook may still get worse, and the government is prepared to for larger deficits if current forecasts prove optimistic.

The budget includes a plan to return spending to a surplus after 5 years, and promises any future surpluses would be used to pay off the debt accumulated from deficit spending during the recession.


One thought on “Flaherty announces $34 billion deficit, prepared for more

  1. Its 50 billion for 09/10 now.

    I dont think it can be helped, but at least it wont be as bad next year without auto-bailouts and home renovation tax credits.

    Hopefully lower EI Claims and increased tax revenues will help get Canada back on track quickly.

    Our economic contraction (released on june 1st) was not as bad as projected, and growth is predicted in the 3rd and 4th quarters by every major economist ive heard.

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