Ottawa: The Canadian government will need another year to balance its budget, according to an economic update.
The federal deficit for the current 2012-13 fiscal year will be 26 billion Canadian dollars, or nearly 5 billion dollars more than the 21.1 billion-dollar deficit forecasted in the March 2012 budget. As a result, Ottawa won't be able to balance its books until 2016-17, reported Xinhua.
In its 2012 budget, the federal government expected to achieve a 3.4 billion dollar surplus by 2015-16, a positive fiscal territory not seen in Canada in almost a decade. Now, it doesn't expect to get back into the black until 2016-17 with a modest 1.7 billion-dollar surplus.
The Canadian deficit will also be between six and seven billion dollars higher between 2013 and 2015 than previously anticipated.
"Canada has clearly been affected by volatile and falling world commodity prices since the budget in late March," federal Finance Minister Jim Flaherty said in a luncheon speech Tuesday to the chamber of commerce in Fredericton, capital of the Canadian Atlantic province of New Brunswick.
He explained that lower current and projected world commodity prices have reduced the outlook for the prices of goods and services produced by Canadian businesses and workers which in turn has reduced the expected level of nominal gross domestic product (GDP) this year and over the next five years.
"World prices have fallen for the commodities we produce, which reduces profits and incomes and, ultimately, revenues for the government," Flaherty said this would have a "direct and significant impact" on the government's fall fiscal outlook.
Last month, government revenues were lower than expected because of about a five-percent drop in the global price of resource commodities Canada exports to the world.
According to Tuesday's economic update, commodity prices have fallen by seven percent since Flaherty delivered his budget in March.
On Tuesday, he cited the ongoing sovereign debt and banking crisis in Europe and the so-called fiscal cliff in the United States as the two key international risks facing Canada.