Ensuring Sound Budgeting

Canada’s relative success in weathering the global economic turmoil thus far can be attributed in no small measure to our country’s solid fiscal fundamentals, the best among all major industrialized countries.

A strong fiscal foundation is not an end in itself, but it is the bedrock on which a resilient economy is built. Responsible budgets, significant debt repayment, and declining corporate and personal income taxes have provided an important competitive advantage. As Canada navigates today’s economic uncertainties, it is even more important that we keep our sights fixed on responsible fiscal management.

The Minister of Finance will provide details on our Government’s approach to economic and fiscal management in the Economic and Fiscal Statement to be delivered next week.

Ongoing, unsustainable deficits are quite rightly unacceptable to Canadians. These structural deficits must never return. At the same time, in a historic global downturn, it would be misguided to commit to a balanced budget in the short term at any cost, because that cost would ultimately be borne by Canadian families.

Hard decisions will be needed to keep federal spending under control and focused on results. Grants, contributions and capital expenditures will be placed under the microscope of responsible spending. Departments will have the funding they need to deliver essential programs and services, and no more. Our Government will engage Parliament and encourage members to take a more active role in scrutinizing spending and suggesting areas for restraint.

Our Government is also committed to responsible fiscal management of public sector compensation, and will table legislation to ensure sustainable compensation growth in the federal Public Service.

Our Government will ensure that the provinces receive the generous transfer payments planned for health care and social programs. We will ensure that Equalization payments also grow, but that they do not grow more quickly than our economy as a whole.

Any new measures to support the economy will also be carefully chosen and targeted for maximum benefit.

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Full Speech

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