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Ottawa, September 9, 2004
2004-047

Minister of Finance Commits to Balanced Budgets and a Balanced Approach to National Priorities

Minister of Finance Ralph Goodale today pledged that the Government of Canada will make significant investments in health care-but not at the expense of balanced budgets and other national priorities.

“The Government of Canada, as promised, will meet the financial benchmarks set out by Mr. Romanow in his 2002 report,” said Minister Goodale. He explained the Government will fill the so-called “Romanow gap” by:

• investing $15 billion in new funding by 2005-06 to support specific health priorities, taking into account funding already committed under the 2003 Health Accord;

• getting the annual “base” for ongoing federal cash contributions up to the appropriate level that Mr. Romanow calculated for 2005-06; and

• creating an escalator to ensure growing and predictable funding for the provinces and territories in the future.

Mr. Goodale noted that funding is only part of the solution to resolving our medicare challenges. He stressed that, “to be sustainable in the long run, our health care system requires important, thoughtful reform.” To this end, the Government of Canada is committed to pursuing that reform with its provincial and territorial partners and with health care providers.

“Addressing health care above other priorities does not mean addressing health care instead of all other priorities,” said Minister Goodale. “Canadians want to see real progress on many other important fronts.”

In his remarks, Minister Goodale stressed the benefits of balanced budgets: a declining debt burden, rising consumer and business confidence, low interest rates, the largest tax reduction in Canadian history, strong economic growth and world-leading job creation. Balanced budgets have also provided the Government with the ability to both respond to unpredictable challenges-such as sudden security threats and the impacts of severe acute respiratory syndrome and BSE-and invest progressively in the key priorities of Canadians such as health care, children, education and innovation.

Minister Goodale pointed to positive signs that the fiscal numbers for 2003-04 and 2004-05 could be stronger than expected at the time of the 2004 budget. He emphasized, however, the need to prepare for uncertainties such as geopolitical tensions and the impact of higher oil prices over a protracted period of time.

To ensure Canada is equipped with the best possible projections, the Minister announced a comprehensive review of the Government’s economic and fiscal forecasting.

“The time has come to test our assumptions and make sure that we are still using best practices-benchmarking ourselves against the best in the world,” he said. The review, the first since 1994, is expected to be completed in time for the next federal budget.

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