Morneau still committed to deficit reduction despite slower economy

Finance Minister Bill Morneau concedes that Canada's red-hot economy is likely to slow this year.

And he says that makes it all the more important for the federal government to continue making investments that will boost economic growth and job creation.

But Morneau says the government also recognizes the importance of being fiscally responsible and remains committed to reducing annual deficits over the long term.

In his fall economic update, Morneau projected a deficit of $19.9 billion in the 2017-18 fiscal year _ almost $9 billion less than predicted in his budget last spring.

He also projected that the deficit would drop over the next five years, to $12.5 billion in 2022-23.

This year's deficit projection includes $1.5 billion for ``risk adjustment'' _ a figure that might be increased going forward to account for additional risks to the economy, such as the potential demise of the North American Free Trade Agreement.