June 16, 2014 12:31 pm

Federal finance minister urges Wynne to balance budget

Ontario Liberal Leader Kathleen Wynne acknowledges supporters at the Liberal's election night headquarters in Toronto, Ont. on Thursday, June 12, 2014.

THE CANADIAN PRESS/Darren Calabrese

OTTAWA – Finance Minister Joe Oliver says the newly-elected Liberal government in Ontario should use its first budget to tackle the province’s serious deficit problem.

The federal finance minister says his government will almost certainly balance its budget next year and that Ontario could take a lesson from that example.

Ontario, which holds a $12.5-billion deficit, elected a Liberal government last week.

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The minister made the comments after meeting more than a dozen private sector economists at his office, the first such meeting for Oliver since being named finance minister in March.

The economists advised Oliver that the weather-related first quarter economic dip in the economy will shave about one-tenth of a percentage point from growth projected in the 2014 federal budget.

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But that likely won’t impact government revenues, they said. In fact, revenues may be higher than expected because strong oil prices likely will translate in to higher tax revenues.

Bank of Montreal chief economist Doug Porter says barring an unforeseen economic shock, he believes Ottawa may get to a balanced budget position sometime during the current fiscal year.

Once the budget is balanced, Oliver says the government can proceed to fulfil its election promise and introduce income splitting.

READ MORE: Why some Tory MPPs were caught off guard by Hudak’s pledge to cut 100,000 jobs

The minister also says he does not believe Canada is experiencing a housing bubble, although he adds that the government still plans new measures to lessen the reach of Canada Mortgage and Housing Corp. in the mortgage insurance market.

The Paris-based OECD recommended last week that Ottawa reduce the percentage of mortgage loan CMHC insures from the current 100 per cent and Oliver says that is one avenue the government could pursue.

© The Canadian Press, 2014

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