Finance Minister Bill Morneau won't scale back Liberal promises despite concerns of bigger deficit

The federal government remains committed to delivering on its costliest campaign promises despite concerns that another promise that of keeping the deficit under$10 billion might become harder to uphold.

"We're not going to scale back on our promises we're going to make those investments, we're going to help the Canadians we know need help, and those things are actually going to be stimulative for our economy," said Finance Minister Bill Morneau in an interview on The House.

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The government admitted this week that its"middle-class tax cut" andcorresponding tax-hike for the "oneper cent"won't offset each other, as the Liberals promised during the campaign.

Instead, the "middle class tax-cut"is going to cost the government $600 million more than promised, and thetax hike on Canada's richest "one per cent" is going to bring in $800 million less.

HowdoesMorneauexplain the $1.4 billion discrepancy?

How does the 'middle class' tax cut work?

9 years ago

Duration 1:04

James Fitz-Morris explains who will benefit - and who won't - from the tax changes Finance Minister Bill Morneau outlined this week

"Economists will debate what happens in the future, but we're in the mode of making sure we give Canadians a transparent understanding of what could happen," Morneau told hostChris Hall.

"We don't want to over-promise and under-deliver. Our goal is to grow the economy, and our big plans, which is to give the Canada Child Benefit to Canadians who need help with raising kidsand to make significant investments in infrastructure, will have a growth impact in concert with this [tax] initiative."

Adding that he wants to give Canadians "a clear understanding of our fiscal situation" the new finance minister said unforeseen surprises in the economy won't keep the Liberals from their campaign promises.

Morneau pointed to lower oil prices and a decline in global growth as challengesthat are "a little bit greater than we might have expected,"but said it's important to "make sure that you're making those investments that might actually allow us to improve our situation."

Sticking to that $10 billion deficit promise?

Whether or not the Liberals will stick to their commitment of a $10 billion deficit remains to be seen Morneauwouldn't offer up any clues, saying Canadians would have to wait until the federal budget in the spring.

"I'm not actually going to write the budget here in December," he said. "What I am going to commit to is lowering that net debt to GDP, and we're going to be transparent. Canadians will understand a lot more when we put forth our budget in 2016."

• ANALYSIS:Finance Minister Bill Morneau won't be nailed down on $10B deficit

Morneau also discussed his recent decision to tighten mortgage rules on homes over $500,000.

"One of our key roles in managing the economy is managing the housing market for Canadians," he said, pointing to "pockets of risk" in Vancouver and Toronto markets.

"We want people to have a little bit more equity in those markets, and that makes them more resilient in the face of any potential changes in the economy."

"It will help the economy broadly because if we create more stability at that top end, it makes it more stable for all Canadians," he added.

Opposition questionsthe government's math

What does the Opposition think about the government's tax changes?

"They didn't do their homework when they put it in their platform, simply put," Conservative finance critic Lisa Raittsaid in a separate interview onThe House.

"They made a promise it would be revenue neutral and it turns out it isn't, and that means they're going to have to deal with a structural deficit right out of the gate on promise number one."

The NDP's finance critic, Guy Caron,told The House he's concerned with the government's handle on the numbers, especially because manyobservers hadbeen saying since the beginning that the tax cut and tax hike were unlikely to cancel each other out.

"One important thing in this isif everything stays the same," Caron said. "If we are seeing changes in the economy, if interest rates in two, two-and-a-half years start to climb, then they will actually have more difficulties and be a worse predicament."