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Ottawa, September 20, 2000
2000-071
Annual Financial Report - The federal government recorded a surplus of $12.3 billion
Notes for an address by the Honourable Paul Martin, Minister of Finance for Canada
Related documents:
- Minister Announces Highest Debt Paydown Ever (News Release 2000-070).
- Annual Financial Report of the Government of Canada.
- Fiscal Monitor (July 2000).
- Fiscal Reference Tables.
Ottawa, Ontario
September 20, 2000
Delivered text is official version.
Good afternoon.
I am pleased to state today that, for the fiscal year 1999-2000, the federal government recorded a surplus of $12.3 billion.
The full amount has been used to reduce the public debt, the single largest paydown of the national debt ever.
This is tremendous news for Canada and Canadians.
Coupled with the results of the last two years, we have now paid down close to $19 billion in net public debt.
As a result, more than $1 billion a year that otherwise would have been spent on debt servicing will be freed up for critical priorities such as health care, education and lower taxes.
This is the federal government's third straight surplus, a mark that has not been equalled since the late 1940s.
During this same period, our debt-to-GDP ratio has improved dramatically.
In 1995, that ratio was 71 per cent – an all-time high. It has now fallen to 58.9 per cent – a drop of more than 12 percentage points.
How did we manage to make such progress? In two ways: stronger than anticipated economic growth and solid spending restraint.
Economic growth during 1999-2000 was very strong and as a result revenues grew by more than $10 billion to $165.7 billion.
Meanwhile, program spending has remained virtually constant. It was $111.8 billion in 1999-2000, only $400 million higher than the previous year. This increase is substantially below the growth rate of inflation and population.
At the same time that we controlled spending, we also managed to spend smarter – focusing on the things that truly matter. Indeed, fully two-thirds of all new spending since balancing the books has been directed toward health care, education and innovation.
Before turning to your questions, allow me to address two issues.
First, why did the surplus turn out to be higher than forecast?
The answer lies in the fact that much of the world is in the midst of an economic boom that has far exceeded expectations. The resulting increase in revenues has been an experience shared widely.
Beyond our borders, both the U.S. and the UK governments have had to revise their forecasts as well. And within our borders, many provincial governments, including Ontario and Alberta, have done the same.
As you know, our fiscal projections are based on private sector forecasts. Last year, the Finance Department conducted an unprecedented series of consultations with the chief economists of Canada's major chartered banks and four forecasting firms.
We have invited them once again to help us update our economic assumptions. The resulting five-year track of fiscal projections will be made public later this fall.
Finally, allow me to address the question of what this means for the future.
As I have said already, it is very good news. It means we will have greater resources to build a better future. It means that we will be able to finance key priorities like the agreement reached last week by first ministers to secure and sustain medicare. It means we will be able to hasten tax cuts for all Canadians. And it means that we will be able to reduce the debt even further.
A few years ago, we said that we were cutting up the federal government's credit card. Today, I tell you we kept that commitment and now we are paying the credit card off.
Thank you.
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| Last Updated: 2004-10-29 |
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