Canada hopes U.S. reaches agreement in budget fight
9:04 AM, E.T. | May 30, 2011Canadian
Finance Minister Jim Flaherty said on Sunday he has talked with U.S. Republican budget leaders about the need to reach a resolution with the White House.
Canada remains concerned about the significant debt and deficit situation in the United States, which is Canada's largest trading partner, Flaherty said in an interview on CTV's "Question Period" news program.
"I've been there recently. I've met with some of the Republic budget leaders to encourage them to try to come to some sort of sensible budget resolution with the U.S. administration," Flaherty said.
"It's important, not just for Canada, but it's important for the whole world that they have a good plan in place that invokes confidence," Flaherty said.
Flaherty, whose Conservative Party was re-elected May 2 following a campaign that stressed the need for economic stability, did not elaborate on what type of plan would invoke confidence.
Republicans in Congress are refusing to raise the $14.3 trillion US cap on U.S. borrowing authority unless the White House and Democrats agree to deep spending cuts as part of any increase. Lawmakers from both parties say any rise must be paired with steps to bring stubborn trillion-dollar deficits under control.
Flaherty is scheduled to unveiled a new federal budget on June 6. It will replace the budget proposal the Conservative government made in March but that was never voted on because of the Canadian election.
Flaherty has said the budget largely will mirror the March spending proposal but puts Canada on track to eliminate its budget deficit by 2014-15, which is a year earlier than he had projected in March.
Canada is watching global economic developments since March, including rising concerns about European sovereign debt, but does not see it changing the assumptions used in drafting the March budget, Flaherty said.
Flaherty will hold a final pre-budget meeting on Tuesday with a group of private sector economists that government uses for guidance.
"In my discussions so far I think we are mainstream, on track, and will be OK," Flaherty said.
The election boosted the Conservatives from minority to majority government status, which means that unlike in March they will not need any opposition party support to get the budget approved.