MISSISSAUGA, Ontario, October 12, 2010 — The Honourable Jim Flaherty, Minister of Finance, today released an update of the Government's economic and fiscal projections. The update clearly demonstrates that Canada remains on track to return to a balanced budget over the medium term.
"The fiscal projections set out in today's update show the Government's plan is on track," said Minister Flaherty. "For the first time since the global financial crisis, we are forecasting a balanced budget."
Canada's Economic Action Plan has underpinned a solid and enviable economic recovery, and Canada has recouped virtually all of the output lost during the recession. As a result of this solid economic performance, nearly 423,000 jobs have been created in Canada since July 2009.
The International Monetary Fund continues to expect that Canada will have the strongest average economic growth among Group of Seven countries over 2010 and 2011. According to the average forecast of private sector economists, real GDP growth is expected to be 1.8 per cent in the third quarter of 2010 followed by growth of about 2.5 per cent over the next three quarters. While economic growth will continue, the private sector forecasters believe the economic recovery remains fragile due to current global challenges, including uncertainty in the United States economy.
"The uncertainty in the global economy means we must continue to keep our primary focus on jobs and growth," continued Minister Flaherty. "This year, our Government's top priority will continue to be the economy and the implementation of Canada's Economic Action Plan."
For over a decade, the Government's fiscal projections have been based on the average of private sector economic forecasts. The update maintains this approach. However, in light of the uncertainty surrounding the global economic outlook, the average private sector forecast has been adjusted downward for fiscal planning purposes.