POLITICS

Deficits Acceptable In 'Extreme' Circumstances: Liberal Candidate

08/05/2015 05:35 EDT | Updated 08/05/2016 05:59 EDT
OTTAWA — The Liberal party's former national director says governments can justifiably go into deficit in extreme circumstances, including recessions and wars.

Greg Fergus, who is running as a Liberal candidate in Quebec's Hull-Aylmer riding, says events such as the recession of 2008 warrant government action to boost the economy and prevent massive job losses.

Fergus spoke at a news conference in Ottawa alongside Liberal stalwart and former finance minister Ralph Goodale, who says the winner of the Oct. 19 vote will inherit a budget deficit of at least $1 billion.

Goodale won't say whether his party's economic plan, once fully costed, would start from a deficit position.

In a radio interview Tuesday, Fergus said while the Liberals would like to have a balanced budget, it won't fixate on it if the economy remains fragile.

The federal Conservatives have insisted that the government's books, under their leadership, will be balanced in fiscal 2015-16.

But a recent report from the parliamentary budget office projected a deficit of around $1 billion this year, based on revised economic forecasts from the Bank of Canada.

The central bank last month cut in half its prediction of economic growth for 2015, down to 1.1 per cent from 1.9 per cent earlier in the year.

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