The federal budget tabled by the Conservative government on Tuesday aims to minimize the emergency fund by two-thirds this fiscal year in order to fulfill the long-promised of balancing the books. According to the budget documents, the economic risks resulting from plummeting oil prices has moved the government to reduce its contingency fund, which is maintained for unforeseen events, to $1 billion this fiscal year from its normal $3 billion annually.
The move to reduce $2-billion in the fund has allowed the government to project a $1.4 billion surplus budget, which will be first balanced budget in eight years. Normally, the annual contingency fund is allocated for emergencies like natural disasters or economic uncertainty. Contrary to the government’s actions, the C.D. Howe Institute recently mentioned in a report that the reserve should be doubled to $6 billion, even if it means fewer economic promises and smaller surpluses.
While making the announcing on Tuesday, Finance Minister Joe Oliver explained the government’s decision to cut the contingency fund and criticized the Liberals for hoarding money in the reserve in the past. He alleged that “compared to the Liberals … I think their number was well over $30 billion. They created a slush fund,” adding that “that’s not what we will do.” In response to the criticism, Liberal Leader Justin Trudeau replied on Tuesday that the budget is “very much a plan” for the Conservatives to win re-election and “the reality is this government has done everything it can to come up with a budget that will be balanced this year.”
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