Attack ads follow bank rate cut

The Conservative government tried to turn bad economic news to its political advantage as the Bank of Canada outlined a less-thanrosy financial forecast for the rest of the year that could threaten the government’s pledge to balance the budget.

The central bank projected the economy would grow by just 1.1 per cent this year _ much lower than the 2.0 per cent that was expected when the Conservatives put together their last budget.

If the bank’s dismal forecast comes to pass, the $1.4 billion surplus projected in the 2015 budget could well become a deficit, since federal coffers would be $4.1 billion slimmer, according to a sensitivity analysis in the April budget.

The optics of running a deficit could be tricky for the Conservatives as they head into an election touting themselves as the only party that could manage federal finances in rough economic times. The government could well be forced to find about $2 billion in savings to balance the books, and raid the $1-billion set-aside for contingencies.

The opposition parties could also be forced to rethink their own campaign pledges if the fiscal cupboard is bare.

Prime Minister Stephen Harper’s office used the Bank of Canada’s announcement Wednesday to launch a political volley at the opposition parties, saying in a statement that voters shouldn’t take “unnecessary risks’’ by electing anyone but the Conservatives.

NDP critic Guy Caron said the government’s formula for keeping the economy humming wasn’t working.

“And the message from the government is ‘ well, let’s stick with the formula that is not working because anything else would be more dangerous.’ It really doesn’t make sense,’’ he said.

Liberal critic Scott Brison called the response from the Prime Minister’s Office “an abdication of leadership’’ from a government with “no real economic plan, only political tactics.’’

Brison said the government needs to give Canadians an update on federal finances so voters and opposition parties can make an informed assessment of the fiscal situation. He argued the only reason the government wouldn’t provide such an update was if the Conservatives wanted to hide the fact the federal budget is still in a deficit.