* Finance Minister: More government “sacrifice” may be needed
* Lower-than-forecast growth hitting revenues
* Expects forecasts used in budgeting to be downgraded next week
OTTAWA, March 1 (Reuters) – Slow Canadian economic growth means the government will have lower revenues than initially forecast in drawing up the next budget and some ministries may need to cut spending further, Finance Minister Jim Flaherty said on Friday.
He said he continues to plan to eliminate the federal government’s relatively small deficit by 2015.
“We also look at program spending, that’s true too. And we can do some more tightening there if necessary,” he told reporters when asked how he would adapt the budget to account for weaker-than-expected growth.
“But we start with a premise that we’re going to balance the budget in 2015 and it may need some more sacrifice in budgeting among various ministries of the government,” he said.
Flaherty was speaking after data released on Friday showed sluggish economic growth in the fourth quarter for the weakest six months since the recession.
The deep discount on Western Canadian crude versus imported oil is also having a “significant” impact on corporate tax revenues, he said.
Flaherty said he expects private sector forecasters to lower their 2013 growth assumptions, on which the budget is based.
“Next Friday … I will meet with the private sector economists here and I expect, and I’m sure you all expect too, that their projections will be lower than they were the last time we met in the autumn,” he told reporters.
“(This) means I will have to account for that in our budget projections including the revenue projections, which I will do. And we will stay on track to a balanced budget in the medium-term,” he said.
He said other ways of finding savings included closing tax loopholes.
Flaherty has not given a date for unveiling the 2013 budget but is widely expected to deliver it in late March.
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UPDATE 1-Canada may cut spending more to tackle deficit-Flaherty
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