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Ottawa, September 20, 2000
2000-070 

Minister Announces Highest Debt Paydown Ever

Related documents:

• Minister's speech - Annual Financial Report - The federal government recorded a surplus of $12.3 billion (2000-071) (News Release 2000-071).
• Annual Financial Report.
• Fiscal Monitor (July 2000).
• Fiscal Reference Tables.

Finance Minister Paul Martin announced today that the federal government recorded a budgetary surplus of $12.3 billion for 1999-2000. This surplus has been applied to reducing the public debt and represents the single largest debt paydown ever by the federal government. The Minister made the announcement with the release of the seventh Annual Financial Report of the Government of Canada.

In the last three years, the Government has reduced the debt by close to $19 billion. "This is tremendous news for Canada and Canadians," said Minister Martin. "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."

The debt paydown, together with Canada's strong economic growth, allowed the debt-to-GDP ratio to decline to 58.9 per cent in 1999-2000, down more than 12 percentage points from 71.2 per cent four years ago. "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."

The Minister explained that, thanks to stronger than anticipated economic growth, revenues grew faster than expected, while solid expenditure restraint resulted in program spending remaining virtually constant.

"This means we will have greater resources to build a better future," Minister Martin said. "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."

The report highlights other important financial results for 1999-2000:

• total budgetary revenues were up by $10 billion to $165.7 billion;
• total expenditures rose by only $600 million to $153.4 billion;
• as a percentage of GDP, program spending fell to 11.7 per cent, its lowest level in 50 years; and
• over the last three years, $20.4 billion in market debt has been retired.

The 1999-2000 Annual Financial Report of the Government of Canada and the Fiscal Reference Tables are available free of charge on the Department of Finance Web site, at the address listed below. Printed copies of both documents are available for $16.00 and may be obtained by calling the Department of Finance Distribution Centre at (613) 943-8665.

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