Canada PM Trudeau tells finance minister to avoid additional permanent spending

FILE PHOTO: Canadian Prime Minister Justin Trudeau speaks at a news conference in Ottawa
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OTTAWA (Reuters) - Canadian Prime Minister Justin Trudeau, under fire for the massive aid Ottawa has unveiled so far to combat the coronavirus, on Friday told his finance minister to avoid additional permanent spending.

By March 31 Canada will have spent a total of C$320 billion - or around 13% of gross domestic product - on measures to help firms and people and is planning to spend an additional C$100 billion over three years to kick-start the recovery.

As a result the budget deficit and national debt are on track to set new records, prompting opposition parties to complain about unsustainable expenditures. Finance Minister Chrystia Freeland is due to present a budget at some point in the next few months.

"You will use whatever fiscal firepower is needed in the short term ... until the economy improves. Doing so, you will avoid creating new permanent spending," Trudeau said in a letter to Freeland.

He also said she should produce a plan to grow the economy while presenting a new fiscal anchor to guide her work.

The so-called mandate letters - which formally outline what is expected of cabinet members - were sent to every member of the Liberal government.

(Reporting by David Ljunggren, Editing by William Maclean)