OTTAWA -- Finance Minister Jim Flaherty won't rule out further cuts to federal departments as he puts the final touches on the next budget, which will close more tax loopholes for corporations.
Flaherty said he hoped Canada wouldn't be overly hurt by financial crises in either America or Europe and that despite disappointing fourth-quarter numbers, the $26-billion deficit would be eliminated by 2015.
Balancing the budget might "require more sacrifice" for federal departments as well as programs that had "run their course," Flaherty said, adding "there are still some tax loopholes" he would plug.
Flaherty spoke to reporters on sequestration deadline day in the U.S. - when $85 billion in spending cuts kick in with no plan in place to soften the blow.
About 5,000 U.S. border guards are expected be cut, meaning long lines to pass through customs. Goods will be held up and cargo at seaports could take up to five days to be cleared, which could spell trouble for Canadian manufacturers.
The Canadian numbers out Friday weren't good. The gross domestic product fell by 0.2% in December and despite modest gains in household spending, both the manufacturing and services sectors saw declines in the fourth quarter of 2012.
NDP MP Guy Caron said he worried about the consequences of another austerity budget. But Sprott School of Business professor Ian Lee downplayed the impact sequestration here.
"The cuts will be spread over years. The [cuts] represent 2.3% of what the U.S. government spends," Lee said. "I just don't think it's going to have a huge impact on us."