Canadian Prime Minister Justin Trudeau suggested that a C$30 bn ($21bn) budget deficit was not a hard limit as the government’s focus should be on spurring economic growth.
In a wide-ranging interview, Trudeau, 44, also said he wanted Britain to stay in the European Union and attributed his role a day earlier in an unusual physical fracas in Parliament partly to being in a high stress job.
On the budget deficit, Trudeau said he was not obsessed with a “perfect number” and instead vowed to increase economic growth.
“Yes, we need to be fiscally disciplined, we need to be responsible, but we need to be investing in the right kinds of things at the same time, so the arbitrary picking a number and trying to stick with it is exactly what I campaigned against in the last campaign,” Trudeau said.
“It’s not an obsession with the perfect number, it’s an obsession with the perfect, or the right, path to grow the economy in ways that help in the short term but lead us on the path towards prosperity in the medium and long term.”
Canadian economic growth is tepid and massive wildfires spreading across the energy heartland will cut federal tax revenues and cost Ottawa billions to cover much of the damages.
Trudeau campaigned on a proposed C$10bn annual deficit but the ruling Liberals later said the economy needed a bigger jump start given the downturn.
In March, the government unveiled a budget with a shortfall of just under C$30bn.
“What Trudeau learned from ballooning out the deficit the first time was that voters don’t care. Canadian voters are prioritising growth and Trudeau plans to deliver that at any cost,” said Adam Button, currency analyst at ForexLive in Montreal.
“Like voters, the market is much more concerned with growth at this point. Central bankers have failed to deliver growth and markets are willing to tolerate larger government deficits for a chance to return to the old normal.”
Speaking in his corner office on Parliament Hill, where a sheathed Sikh sword sits on the desk, Trudeau said he did not see a point at which the government would walk away from talks with Bombardier because aerospace jobs were exactly the kind of future Canada wants.
Ottawa is under pressure to provide aid to the plane maker, which is based in the mostly French-speaking province of Quebec, Trudeau’s home, but federal negotiators want concessions around control of the company.