Ottawa looks to sell assets to avoid deficit

WINNIPEG—The Conservative government is considering selling off Crown assets—think of the CN Tower—as a means of “reducing a deficit,” Finance minister Jim Flaherty said yesterday.
Flaherty emerged from a national meeting of Conservative MPs in advance of the party’s policy convention with a grim prognosis for the global economy. And he floated the idea of great Canadian fire sale as part of the government’s austerity measures.

“We are going to review the corporate assets, the capital assets of the government of Canada, to see whether they still perform a useful function for the Canadian people,” said the finance minister.
“And if that review shows there are some assets that should be sold, then we’ll go ahead with it.”
Flaherty described the measure as “one way of reducing a deficit or perhaps having a small surplus.”
It’s part of a calculated message Conservatives have been sending Canadians only a month after winning a federal election in which all parties vowed to run balanced budgets. Now that the votes are cast, deficit financing no longer is the dirty word it was during the campaign.
In a speech to party faithful yesterday evening, Prime Minister Stephen Harper warned that while Canada is relatively well-positioned compared to other industrialized nations, the global economic meltdown is pounding our shores.
“The effects of this crisis will continue to be felt here,” he warned. “And make no mistake, there are much more difficult times ahead.”
Flaherty, meanwhile, warned of “more carnage to come in the U.S. housing sector [and] more financial institutions in the United States that are unlikely to survive. So we are in a difficult time.”
Flaherty listed a series of measures—limiting public sector wage growth, reviewing government operating expenses, curbing growth in equalization payments to the provinces, and asset sales—as “steps we’re taking which will help us get toward a balanced budget.”
He did not say the government would be successful in balancing the books, and indeed downplayed expectations.
“We have to be realistic,” said Flaherty. “The economic situation is getting worse. It has not bottomed out.”
As for what could be put up for sale, Flaherty gave only the broadest hint. “Canadians would be very surprised to know that they own things like the CN Tower,” he noted.
So is the Toronto landmark for sale?
“You want to buy it?” Flaherty responded, laughing. “No, it’s not for sale.”
Christian Paradis, Harper’s newly-named Public Works minister, was unable to offer even the most general ideas about what might be on the market or what value such assets might hold.
“There’s plenty of decisions that will have to be made,” said Paradis. “It’s premature now. I can’t answer.”
Flaherty made an oblique reference to capital assets and Crown corporations in an Oct. 29 speech to the Canadian Club of Toronto, but did not explicitly spell out that assets were for sale.
An official told reporters in Winnipeg that Flaherty was not referring to Crown corporations in his comments yesterday. But the Conservative government announced last spring that Atomic Energy of Canada Limited was being reviewed with an eye to a possible privatization or public-private partnership.
In response to a question, Flaherty did specifically rule out selling the CBC, which accounts for $1 billion of the federal budget every year.
Some private-sector economists have predicted the federal government could face a deficit as high as $10 billion in the next fiscal year that begins in April, and be in deficit position for several years to come.