Canadian Parliamentary Budget Officer Forecasts 5 Years Of Federal Deficit

January 14, 2009 12:22 p.m. EST

Ottawa, Ontario (AHN) - Because of the global financial crisis, Canada expects to have a federal budget deficit for a minimum of five years, estimates Parliamentary budget office Kevin Page. Since 1997, Ottawa has enjoyed balanced and surplus federal budgets.

Page said, quoted by Globe and Mail, "It's unfortunate, but we're not going to be like we have been in the past 11 years."

Page's admission is a reverse of the Conservative party's campaign promise, made before the broad and deep negative effect of the global crisis was felt, never to incur a budget deficit.

The five-year estimate is a conservative one. Some of Page's staff suggested it could take seven to 10 years before the country's budget would return to black again depending on the speed of recovery of the American economy, which purchases 80 percent of Canada's export.

To prevent a budget deficit, the federal government plans to include a $30 billion economic stimulus package it will present to the Parliament on Jan. 27, despite Finance Minister Jim Flaherty's aversion to government bailout packages.