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Editorial Cartoon by Graeme MacKay, Editorial Cartoonist, The Hamilton Spectator – Monday January 26, 2009

Government will run $34B deficit

The federal government will run a $34-billion deficit in the coming fiscal year, and a $30-billion deficit in the following year, a senior government official said.

The spokesman said Thursday that the federal government will return to running a surplus within five years.

Federal Finance Minister Jim Flaherty is due to present a new budget on Jan. 27.

Speaking on condition of anonymity, the official told reporters the government decided to announce the size of the deficits now because of intense speculation about the budget.

The release of the budget details is, nevertheless, an extraordinary step. The secrecy around federal budget planning is legendary.

By releasing the size and nature of the deficits ahead of the federal budget, the government might be hoping to soften the impact of the deficit blow.

The size of the deficit is largely attributable to the Conservative government’s decision to include billions in stimulus spending beginning in this year’s budget. That includes immediate spending on infrastructure and help for Canadians hit hardest by the economic downturn. (Source: CBC News)