Canada's government expects $2.3 billion deficit

TORONTO (AP) — Canada's new Liberal government has inherited billions of dollars of deficits, the finance minister said today.

Bill Morneau said that without accounting for planned Liberal spending and stimulus measures, the deficit would be US$2.3 billion (CA$3.0 billion) in the current fiscal year and $US2.9 billion (CA$3.9 billion) in 2016-17, with deficits continuing through 2018-19.

Morneau said, however, the government will fulfill its pledge to balance the books before the next election despite the weaker economic environment and the steeper fiscal obstacles.

In April, the former Conservative government had predicted a $2.7-billion surplus. The new government noted that economic conditions have deteriorated since the April budget because of higher expenses and lower revenues tied in part to stubbornly low commodity prices, global uncertainty and the weak performance by the U.S. economy to start the year.