Finance Minister Jim Flaherty said Canada's weakening economy will result in a deficit, but not a "structural deficit" that would keep Ottawa in the red for the foreseeable future.
"We will ensure that spending that puts us into deficit is temporary, is for finite purposes, so that we will not be into a permanent deficit," he told reporters Tuesday, before meeting for the first time with his new economic advisory panel.
The finance minister is in the midst of discussions on the federal budget coming at the end of January, and at this point little is written in stone about what the plan will include.
"We haven't made any decisions, I can tell you, about what will be in the budget or what will not be in the budget, other than obviously there will be some stimulus in the budget because the economy is weakening significantly," he said in Toronto.
Aside from the problems involved in deficit spending, Flaherty said Canadians are becoming increasingly concerned about their ability to borrow money as the global recession puts pressure on the credit market.
"We are hearing across Canada concerns about access to credit," Flaherty said. "I look forward, with the Canadian financial industry, to discussing how they see their role in providing access to that."
Flaherty said a major issue going into 2009 will be finding ways to guarantee the "affordability and availability" of credit.
He assembled the economic advisory panel, which is headed by former B.C. finance minister Carole Taylor, after the government was nearly toppled over its fiscal update. The document so enraged the opposition they formed a coalition, and threatened to bring down the Conservatives in the next confidence motion.
Prime Minister Stephen Harper then managed to convince Gov. Gen. Michaelle Jean to prorogue Parliament to delay the standoff.
Along with Taylor, the economic panel includes B.C. billionaire Jim Pattison, Research In Motion co-CEO Mike Lazaridis, and representatives of the Thomson, Demarais and Irving family fortunes. They have all agreed to be paid just 11 dollars a year.
The first meeting hit a slight snag when a heckler dressed in a Santa Claus hat asked if they would agree to bail out small businesses, and whether there were any restrictions on who would receive money.
The heckler, identified by The Canadian Press as Toronto businessman Chris Morren, opposes the bailout of large corporations. As he asked the panel questions, members looked away and kept smiling for photographers.
Also on Tuesday, Flaherty announced new provisions to help Canadians weather the current economic problems, including a proposal to allow those with disabilities to save money, tax free.
He said the plan will allow parents or guardians of people with disabilities, as well as their siblings, to set-up and contribute to a tax-free savings account on their behalf.
The federal government would match the savings, dollar for dollar, up to $3,500 per year. The registered disability savings plans would max out at a lifetime limit of $200,000.
Roughly 280,000 people would qualify for the registered disability savings plan, Flaherty said. The deadline to set up and put money into the RDSP will be extended until March 2, 2009.
With files from The Canadian Press
