A meeting Friday between the Federal Finance Minister and about a dozen private sector economists expressed concern about making deep cuts to the spring budget.
While Canadian leading economists have lowered their growth forecasts for the 2013 Fiscal Year. The forecasts show Canada’s economic growth will be about half a percent less than what was predicted six months ago. This is largely due to the volatility in the U.S. and Europe.
“The government doesn’t need to hit the spending brakes too hard because the markets won’t care if we miss the 2015 target,” TD Bank spokesperson Craig Alexander said.
“What really matters is the direction that you’re going and that you’re making fiscal improvement.”
According to Bank of Montreal spokesperson Doug Porter, the Federal government doesn’t need to make any severe cuts in the spring budget.
“It probably would be unwise for the Federal government to step on the brakes further than they already have. I think last year’s Fiscal claim was quite reasonable,” Porter said.
Porter added that the Harper government shouldn’t be afraid to break its schedule and run another year or two of deficits; while Finance Minister Jim Flaherty says he’s not changing his projections.
“We are on track to balance the budget in 2015 in the current target,” said Flaherty.
“We’ve been looking at savings witin government certainly.”
Flaherty hinted Friday that his budget may close tax loopholes and make further spending cuts but won’t include new taxes or major stimulus measures.
The Minister still won’t say when he plans to bring his spring budget to the table.