Prime Minister Stephen Harper says he won't hike taxes or cut spending to deal with the country's ballooning debt.
But he says he'll have to “control” spending increases on government programs to meet the goal of a balanced budget by 2016.
“We've said that we have stimulus programs that are temporary and these programs must come to an end at ... the end of the year 2011,” Mr. Harper said.
“And then after that we will be able to keep provincial transfer programs, but the others we'll have to control increases according to economic growth.
“With this approach, we should not increase taxes.”
The Conservative government expects to run a massive $56-billion deficit this fiscal year alone, with multibillion-dollar deficits continuing until 2015-16.
Many experts say there are only two options to eliminate the deficit: raise taxes or cut spending.
But Mr. Harper and Finance Minister Jim Flaherty insist they can do it by limiting spending increases as the economy grows.
Economist Dale Orr released a report Friday calling the government's plan “unrealistic.”
He said the Conservatives simply can't responsibly meet their 2015-16 target without raising taxes.
Orr proposes temporarily restoring the GST — which the Tories cut by two percentage points — to seven per cent until the budget is balanced again.
Mr. Harper took a poke at Liberal Leader Michael Ignatieff, who once mused that tax hikes may be necessary to fight the deficit.
“Obviously the opposition has other plans; they want to make our stimulus programs permanent, they want to create a lot of other programs and, for them, they'll have to increase taxes. But, for us, it's something that we will not consider.”
However, opposition critics say Mr. Harper can't be trusted to keep his word. They note that just a year ago, as the country was spiralling into recession, Mr. Harper said he would not run a deficit.
