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Fiscal cupboard is bare, Jim Flaherty warns

Mary Bucci holds her four-month-old daughter while she and husband Mike visit with Finance Minister Jim Flaherty at their Oakville, Ont., home on Nov. 22, 2010.

Darren Calabrese/The Canadian Press

Finance Minister Jim Flaherty vows to resist pressure from interest groups and opposition parties to spend "recklessly on new schemes" for next year's budget.

"This year must be different," Mr. Flaherty told the Oakville Chamber of Commerce in a lunchtime speech Monday. "We will not make significant new government spending commitments this year that would trigger bigger deficits and higher taxes."

Although his speech was not as partisan as one he delivered in September, when he took a lot of heat for characterizing the Liberal-NDP-Bloc coalition as " pirates" and suggested they wanted to kill jobs, Mr. Flaherty still took some jabs at his opponents.

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But his speech was mostly aimed at warning Canadians that the cupboard is bare - so don't expect much in next year's budget - and at encouraging them to participate in pre-budget consultations that he launched Friday. The Prime Minister has also announced he is embarking on economic consultations to hear what Canadians think the government should do in the next phase of its Economic Action Plan.

Mr. Flaherty said his guiding principle in framing next year's budget is "getting books back into the black to secure our recovery." He repeated a couple of times that Budget 2011 will not feature any significant new spending.

In addition to refusing to spend "recklessly," he said he will not raise taxes on small or large businesses now and will not create "new programs that will bloat bureaucracy and become self-serving at the expense of our health and education systems."

He said, too, he will not give in to "groups or the opposition who ask for money for initiatives. ... The opposition's approach would be to add extravagant new spending to the deficit and raise taxes to pay for it."

And he also vowed to follow through on the Conservative plan to cut taxes for employers, which the Liberals want reversed for programs aimed at helping Canadians care for sick relatives. "To increase taxes on businesses now, as some of our opponents are proposing, would put hundreds of thousands of jobs in jeopardy at a time when our economy remains fragile," Mr. Flaherty argued.

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About the Author
Ontario politics reporter

Jane Taber is a reporter at Queen’s Park. After spending three years reporting from the Atlantic, she has returned to Ontario and back to writing about her passion, politics. She spent 25 years covering Parliament Hill for the Ottawa Citizen, the National Post and the Globe and Mail. More

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