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Flaherty prepares to step into budget fray

Minister must tame deficit

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OTTAWA -- A new infrastructure program and a focus on job-skills training is expected to be the focus of Finance Minister Jim Flaherty's federal budget today. There will also be measures to shore up the manufacturing sector, Flaherty said Wednesday, as he tried on his traditional pair of new budget shoes at the Roots Factory in Toronto.

The shoes -- lace-up black Oxfords -- were chosen this year because Roots demonstrates a "great Canadian manufacturing success story," and a company that has experienced the ups and downs of the economy, Flaherty said.

"We're going to talk about manufacturing in the budget and some specific measures that we're going to take, in particular to help manufacturing enterprises in Canada, including Ontario, which is a very important place," he said.

In a letter to Conservative MPs earlier this week, Flaherty touted investing in value-added jobs in manufacturing, skills training to match available jobs and investing in infrastructure as key budget themes.

Flaherty is under mounting pressure as the dates inch closer to the Conservative election promise to balance the books by 2015. With most major banks and economists forecasting slow growth for Canada this year -- 1.7 per cent, and coming off two weak quarters in which growth was 0.6 and 0.7 per cent respectively -- Flaherty's deficit-fighting plan from last year is far from on track.

The deficit for the current fiscal year is forecast to be as much as $26 billion, or $7 billion more than Flaherty predicted a year ago.

He also estimated a year ago the deficit in the 2013-14 budget would be $10 billion, but few expect the number to be that low.

Flaherty won't have much room with which to play in this budget, and more cuts, on top of the $5 billion announced last year, are likely.

A new infrastructure fund to replace the soon-to-expire Building Canada Fund has long been expected in this year's budget.

For much of the last year, Denis Lebel, transport minister and Steven Fletcher, minister of state for transport, travelled the country consulting on a replacement program.

The Federation of Canadian Municipalities wants the new program to last at least two decades and provide upwards of $5.75 billion in federal money alone.

The Association of Manitoba Municipalities demands flexibility, particularly for smaller jurisdictions that may not be able to come up with one-third of the cost of a program as has been required in the past.

Prime Minister Stephen Harper is said to be focused on rejigging funding for labour-skills training, after having the labour gap brought up numerous times by Canada's business leaders.

A new job-skills strategy could include some tinkering with the $2 billion in annual funding, which makes the province very nervous.

Manitoba gets about $50 million each year from the Labour Market Development Agreement, which accounts for 35 per cent of Manitoba's entire labour-market funding, and goes to a network of 150 agencies, industry councils and employer groups.

"This is critical for us," said Matt Williamson, a spokesman for Premier Greg Selinger.

Republished from the Winnipeg Free Press print edition March 21, 2013 A9

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