Canada's deficit jumps to $50 billion

OTTAWA, May 27 (UPI) -- Canada's Conservative finance minister said the country's deficit has topped $50 billion, some $16 billion more than he forecast four months ago.

Jim Flaherty made the announcement after emerging from Parliament in Ottawa Tuesday, hours after Statistics Canada said federal jobless claims had risen 10.6 percent to 681,400, the Globe and Mail reported Wednesday.

"We are going through a deeper economic slowdown than anticipated … we also have the substantial auto payments that are going to be required," Flaherty told reporters.

Party sources told the Globe and Mail about half of the increase in the deficit estimate is associated with the bailout packages for General Motors Canada and Chrysler Canada. The other half was attributed to sagging tax revenues and the increased payouts to the unemployed.

Flaherty said the deficit amounts to more than 3 percent of the economy. Parliamentary budget officials said deficits in the early 1990s exceeded 5 percent, and in the mid-1980s, 8 percent. The United States' deficit is widely expected to surpass 12 percent of its economy, the newspaper said.