11/07/2011 12:24 EST | Updated 01/07/2012 05:12 EST

Flaherty Update May Retreat From Deficit Promise


Finance Minister Jim Flaherty is expected to release his economic update Tuesday in Calgary during a speech at the chamber of commerce.

The update follows G20 meetings dominated by discussions of the eurozone crisis, and just days after news that Canada had shed 54,000 jobs in October.

The Conservatives maintain they've created 600,000 net new jobs in Canada since 2009.

The government has pledged to cut $4 billion a year from the budget to bring it back into balance from deficit by 2014. Opposition MPs say now isn't the time to cut government programs and jobs, when the economy is already weak.

Finance Department numbers released Oct. 26 show the government isn't likely to meet its deficit target. Based on predictions by private sector economists, the department's numbers forecast an economy generating $83 billion less between 2011 and 2015 than the government projected in its June budget. That could mean government revenues will fall short by as much as $12 billion by 2015.

Flaherty and Prime Minister Stephen Harper have said they will remain flexible on new stimulus plans, but only in case of a recession.

One option the government has is a freeze on increases to Employment Insurance premiums, or a smaller increase than the one due to come into force in January. The government plans to increase EI premiums by 10 cents per $100 for employees and 14 cents per $100 for employers.

But the Canadian Federation of Independent Business called on them to delay the increase for 2012, arguing they could dissuade small and medium-sized businesses from hiring.

Flaherty froze EI rates in 2009 because of the recession, and last summer began consultations into the premiums.