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Ottawa, September 18, 2001
2001-078

Largest Ever Paydown Made on Canada’s Public Debt

Related Documents:

• Fiscal Reference Tables, September 2001.
• Annual Financial Report of the Government of Canada Fiscal Year 2000-2001.

Finance Minister Paul Martin announced today that the federal government paid down $17.1 billion in debt in 2000-01, the largest debt paydown in history by a Canadian government.

Canada’s public debt has been reduced by $35.8 billion from its peak of $583.2 billion in 1996-97 to $547.4 billion in 2000-01. This represents an ongoing saving of $2.5 billion each year in lower interest payments to service the debt.

"This is the real fiscal dividend," said Minister Martin. "Reducing the debt burden also means that Canada’s fiscal framework is less vulnerable to economic shocks, such as higher interest rates or slowdowns in economic activity."

Minister Martin announced the debt paydown in the eighth Annual Financial Report of the Government of Canada, which was released today and reviews the Government’s financial performance for the 2000-01 fiscal year.

This marks the fourth consecutive year in which the federal government has recorded a budget surplus – a feat that was last accomplished in the four-year period leading up to the 1951-52 fiscal year.

Minister Martin added that Canada’s sound fundamentals will help the country deal with any economic consequences resulting from the tragic events which took place in the U.S. on September 11, 2001.

The Annual Financial Report also highlights other important financial results for 2000-01:

• the debt-to-GDP (gross domestic product) ratio stood at 51.8 per cent, down from a peak of 70.7 per cent in 1995-96;
• more than $30 billion in market debt has been retired since 1996-97; and
• as a percentage of GDP, total program spending declined to 11.3 per cent, its lowest level in more than five decades and down from 16.4 per cent in 1993-94.

Minister Martin cautioned, however, that Canada cannot escape the impact of the current slowdown in global economic markets. "With slower economic growth, surpluses will be correspondingly lower," he said.

The 2000-01 Annual Financial Report of the Government of Canada and Fiscal Reference Tables can be viewed free of charge on the Department of Finance Web site at the address listed below. Printed copies of the documents are available for $16.00 from the Department of Finance Distribution Centre at (613) 943-8665.

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