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Ottawa, May 13, 2005
2005-035

Minister of Finance Outlines Fiscal Impact of Recent Government of Canada Initiatives

Minister of Finance Ralph Goodale today released an accounting of the fiscal impact of all Government of Canada initiatives announced since the budget was tabled on February 23, 2005. These total $9 billion over five years.

"There is no doubt that we remain on track to achieve balanced budgets or better each and every year and to reduce the federal debt as a share of the economy to 25 per cent by 2014–15, as indicated in the last budget," said Minister Goodale. "This commitment is backed by $28.5 billion in contingency reserves and economic prudence over the next five years."

The initiatives announced in recent weeks, some of which overlap and some of which were funded in Budget 2005, are as follows:

• $4.5 billion over the next two years related to initiatives in Bill C-48 for post-secondary education and training, affordable housing, the environment and foreign aid.

• $5.7 billion for a number of shared initiatives with the Province of Ontario over the next five years. Some of these initiatives are covered by Bill C-48 or by funds set aside in Budget 2005.

• $350 million in lower airport rents until 2009–10. Over the lifespan of the rental agreements (most of which have remaining terms of about 50 years), Canadian airports will pay $8 billion less.

• $618 million over the next five years for other initiatives outlined in the table below.

The total cost of the above measures is $11.2 billion. However, $2.2 billion of this amount was funded in Budget 2005 or represents the overlap between Bill C-48 and the Ontario agreement. As a result, the net fiscal cost of these measures is $9.0 billion.

Measures outlined in Bill C-48 will be funded from any budgetary surplus that exceeds $2 billion in this fiscal year and the next. Other new spending commitments will be funded through the use of economic prudence, where appropriate, as well as the reallocation from existing programs, or increased revenues should they materialize.

The table below provides a detailed breakdown of the fiscal impact of these measures over the next five years.

In releasing this information, Mr. Goodale said, "It is important that Canadians have an accurate understanding of the impact of recent decisions on the financial position of the Government of Canada."

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Initiatives Announced Since the 2005 Budget