Advertisement

Finance minister faces pointed Tory questions about soaring deficit

Click to play video: 'Finance Minister ‘deadly serious’ in thinking balanced budget would trigger recession'
Finance Minister ‘deadly serious’ in thinking balanced budget would trigger recession
WATCH ABOVE: Finance Minister 'deadly serious' in thinking balanced budget would trigger recession – Feb 23, 2016

OTTAWA – Canada’s finance minister faced sharp questions Tuesday about the Liberal government’s fiscal footing – now projected to be billions of dollars deeper in the hole than expected.

Bill Morneau appeared before an all-party parliamentary committee fresh from projections he delivered Monday that suggest next year’s deficit could be more than five times bigger than was forecast just three months ago.

Conservative MP Lisa Raitt accused the Liberals blowing through a surplus left behind by the former government.

READ MORE: Liberals announce $18.4 billion deficit, expect oil to hover around $40

Morneau defended the government, insisting the Conservatives, in fact, left the Liberals in a deficit position.

NDP MP Guy Caron asked Morneau if Ottawa’s move to include a bigger-than-usual contingency reserve of $6 billion a year in its calculations was designed to lower expectations among Canadians.

Story continues below advertisement

Morneau says the Liberal government chose to include the large adjustment to account for risks, such as the high degree of volatility.

Breaking news from Canada and around the world sent to your email, as it happens.
For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen.

Get breaking National news

For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen.
By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy.

The Liberal government is now projecting a shortfall of at least $18.4 billion next year – a deficit that’s also well past the $10-billion limit promised by the Liberals.

By the time the March 22 budget is tabled, it may well have surged well past $20 billion, once several costly Liberal campaign promises are factored in.

The federal government also confirmed Tuesday that it will provide $251.4 million to Alberta under a program designed to help provinces hit by sudden revenue downturns.

WATCH: Trudeau defends EI reform and investment spending

Click to play video: 'Trudeau defends EI reform and investment spending'
Trudeau defends EI reform and investment spending

Alberta has been sideswiped by collapsing oil prices and the little-known fiscal stabilization program provides help when provincial revenues fall by more than five per cent from one year to the next.

Story continues below advertisement

Money from the program is allocated on a per capita basis, at $60 a person.

Newfoundland and Labrador, which has also been hit by sagging oil prices, may also qualify and the federal government says it will quickly assess such a claim if the province applies for money.

Sponsored content

AdChoices