01/20/2015 01:49 EST | Updated 03/22/2015 05:59 EDT

Federal Budget 2015: Liberals Rip Harper Government 'Confusion'

LONDON, Ont. - Senior government officials are dismissing as a tempest in a teapot the apparent contradiction between Jason Kenney and Joe Oliver when it comes to how the federal government plans to balance the budget.

In interviews over the weekend, Kenney — the federal employment minister — said the government would have to consider "continued spending restraint" such as extending an operational spending freeze in order to stay in surplus territory as planned for this fiscal year.

He also said the government would not dip into its $3-billion contingency reserve, which it sets aside for unexpected circumstances.

Both sentiments appeared to fly in the face of what Oliver, the finance minister, has already said about how he plans to balance the books in the face of a precipitous drop in the price of oil. A senior official also said no cuts are planned and suggested the contingency fund was indeed in play.

On Tuesday, although no one was willing to talk on the record, government sources said Kenney — who has not been privy to all the pre-budget discussions and decision-making — had simply misspoken in the interviews.

One thing is certain: the government is scrambling to deal with the impact of plunging oil prices that the Conference Board of Canada said Tuesday would carve some $4.3 billion out of the federal treasury this year.

Last week, Oliver took the unusual step of postponing the budget until at least April so the government can assess the fiscal fallout of tumbling crude and the sudden reduction in capital expenditures in the Alberta oilpatch.

When asked about the contradiction at an event Tuesday in Montreal, Justice Minister Peter MacKay said the budget would be balanced in a prudent and responsible way, regardless of the price of oil.

"I think Canadians would agree that whether you're running a government department, a business or a household, living within your means and trying to be efficient and see that your money goes further is a common theme that people embrace," MacKay said.

"And demanding greater accountability within government departments."

Opposition critics had a field day Tuesday with the apparent confusion.

Deputy Liberal leader Ralph Goodale said the government has bungled its message since Oliver announced last week that the budget will be delayed until at least April due to the plunging price of oil.

Goodale, in London, Ont., for a Liberal caucus retreat, says the mixed messages reflect a government that doesn't know what it's doing in the midst of economic uncertainty.

"This government has really bungled their economic management and their economic message," said Goodale, who was in London, Ont., for a Liberal caucus retreat.

"Everything they've done in the last week has reinforced the notion of confusion and uncertainty, with the minister of finance swallowing himself whole last week — and then Mr. Kenney spending the weekend contradicting him, and then some other government official anonymously contradicting Mr. Kenney.

"This is a government at sea. They've run out of gas and they're delivering a message of confusion."

In a statement, the NDP said the government is debating "two bad choices" — cutting services or depleting the contingency fund — and should instead abandon its costly plan to allow income splitting among eligible couples with children.

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