"So now, it would not take much of a drop in economic growth before the budget returned to deficit. It's possible they miscalculated, or they might argue that tax cuts are just what the economy needs heading into a recession".
The paper slated for release Monday uses government estimates contained in last October's fall update, but substitutes four different growth scenarios for gross domestic product (GDP) - each gloomier than the previous one - in place of the government's now rosy-looking forecasts".
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Federal Tax Cuts Could Push Ottawa Back Into Deficit, Says CCPA
Posted on Monday, January 14 at 10:18 by N SayContributed By
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Last Updated: Monday, January 14, 2008 | 2:50 PM ET <br />
CBC News <br />
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Finance Minister Jim Flaherty said Monday that there's no substance to worries that the country will head back into a deficit situation if the economy slows.<br />
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Flaherty was responding to a new report by the left-leaning Canadian Centre for Policy Alternatives (CCPA), which warned that the federal treasury could easily record a deficit if economic growth slows more than the government expects.<br />
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"If [the CCPA] had been paying attention they would have noticed that in the autumn we were anticipating some slowing in the Canadian economy, as a result of the quite significant slowing in the U.S. economy," Flaherty told reporters at a Vancouver news conference.<br />
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"For that reason, in the fall economic statement on Oct. 30, we made dramatic historic tax reductions — business tax reductions — in Canada," he said.<br />
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"We will keep spending within the rate of growth of the economy, and quite frankly, I hope to do more than that," he said.<br />
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"I want to make sure we keep the budget in surplus."<br />
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<a href="http://www.cbc.ca/money/story/2008/01/14/flaherty.html">http://www.cbc.ca/money/story/2008/01/14/flaherty.html</a><p>---<br>"George Bush has declared the war on terrorism to be the cause of his generation. The cause of Canadian sovereignty will be ours." - John Godfrey, MP for Don Va