Canada Predicts Bigger Surplus in 2015 Budget

Canada's budget deficit is going to be eliminated by 2015 at ease, the Finance Ministry claims. Reuters reports that the estimates shown by the ministry indicates an estimated amount of surplus of the year 2015 despite warning against the uncertainty of the global economy.

Jim Flaherty, the finance minister of Canada, declared on Tuesday that the 2015-2016 fiscal year would see a surplus of C$3.7 billion which is about $3.5 billion. It was forecast in March 2013 that the amount of surplus of the 2015-2016 fiscal year would be C$800 million. The figures include a risk cushion of C$3 billion, which means that the actual surplus could be even more than what it projects.

Mr Flaherty issued a statement saying that the government was 'on track' for getting back to balance in the year 2015. He expects only C$17.9 billion deficit in 2013 in spite of allotting C$2.86 for the Calgary floods as well as the train derailment in Quebec earlier in 2013. The deficit is going to be even less in 2014, and then it will reach a surplus in 2015 just before the general election, he predicts.

It was promised by The Conservatives during the election campaign in 2011 that they would introduce cuts in personal income tax. They promised to do so when the budget would be balanced. If all goes as predicted, the government is all set to fulfil their promise before the next election in October 2015 and hope to be re-elected.

The reason behind a brighter outlook in the finance department is that weaker revenues have been compensated by lower public debt charges and programme expenses, as announced in the fall fiscal update by the finance ministry. When compared to the United States, Canada's budget woes have turned out to be less painful despite the fact that the U.S. economy is nine times bigger than Canada's. Mr Flaherty's initiative to cool down the housing market in the country seems to have worked really well.