Flaherty to balance budget, keep taxes low

The most important contribution a government can make is to balancethe books and keep taxes low, Finance Minister Jim Flaherty told the Economic Club of Canada Wednesday in Ottawa.

Flaherty said the federal government's priority remains tobalance the books in time for the next election in 2015 and that further stimulus isn't currently needed.

With federal and provincial coffers strapped for cash, however, Ottawa will continue to come under growing pressure to help other levels of governmentfund public transit andinfrastructure.

Flaherty said "no decision" has been made with respect to further infrastructure funding, and that any decision would be made in the context of Canada's current fiscal situation.

TheOpposition New Democrats areworried about the signal Flaherty is sending, NDP Leader Tom Mulcair told reporters after question period on Wednesday.

"Municipalities are responsible for 40 per cent of the infrastructure in this country but they only haveeightper cent of the tax base. It's impossible for them to continue this way," said Mulcair.

Flahertytold reporters after his speechthere is about $6 billion more leftto be spent from the $33-billion Building Canada Plan, which the government introduced in 2007, and thatthefederal government now permanently fundsthe municipalities through the federal Gas Tax Fund to the tune of $3 billion a year.

The finance minister's comments come after repeated calls from the Federation of Canadian Municipalities (FCM) and a new report by the Canada West Foundation calling on Ottawa to commit to long-term infrastructure funding.

Infrastructure funding

On Wednesday, Karen Leibovici, the president of the FCM, saidalong-term infrastructure planin the 2013 budget would provide"sustained, predictable funding" needed to support growing businesses and families.

"Small businesses need quality roads and bridges to deliver goods and services," she said. "Workers need fast, efficient public transit to connect them to jobs. And communities count on high-quality services, such as drinking water and wastewater systems, to keep them healthy.

"Yet today, those foundations are buckling under the strain of age and deferred repairs,"Leibovici said.

The FCM also welcomed a report releasedby the Canada West Foundation Wednesday morning calling for the federal government to maintain"a high level of investment in public infrastructure, because it is a key driver of economic productivity."

The Canada West Foundation looked at more than 200 studies that founda strong link between public infrastructure investment and long-term economic growth.

"The Canadian economy has to become more productive or we wont be able to maintain social programs in the face of an aging population without significantly increasing taxes," said Casey Vander Ploeg, Canada West Foundation senior policy analyst and co-author of the report.

"The good news is that investing in public infrastructure can boost economic productivity."

In November,Canada's big city mayorscalled on Ottawa to come up with20-year plan to tackle the country's aging infrastructure,and in return, they promised to match any further federal funds.

The FCM saidcities and towns need another $2.5 billion a year in order to keep Canada competitive with other countries.

Funding for First Nations

After his speech, Flaherty was asked by reporters ifthere would be new funding for First Nations included in the next federal budget.

The finance minister said he would be in a position to comment at the time of the budget butadded thatthe government will continue to address Canada's skills and training issues.

"There are some excellent iniatives in Canada where aboriginal people have found very good jobs and excellent training... these in my view ought to be more widespread," said Flaherty.

On Tuesday, Conservatives voted in favour of a motion by Jean Crowder, the NDP's aboriginal affairs critic, calling on the government "to make the improvement of economic outcomes of First Nations, Inuit and Mtis a central focus of Budget 2013."

Crowder said it was an"encouraging vote" and urgedthe federal government to take this opportunity to put words into action.

First speech since health disclosure

Last week,Flaherty revealed he is taking steroid medication for a skin conditionthat has affected his appearance in recent months.

Today, when asked if his health condition would prevent him from doing his job, Flaherty told reporters after his speech that he's committed tostaying on as finance ministeruntil the budget is balanced.

"We're more than half way there and we'll be even further there in the next fiscal year, but I would like to see it through to the finish," said Flaherty.

Today marked the seventh year anniversary of Flaherty's swearing in as federal finance minister.