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