Paul Martin: no new federal cuts

Canada’s finance minister said this week that the era of federal government cuts is coming to an end – and that by the time Nunavut is created in 1999, Ottawa may have a balanced budget.


Federal Finance Minister Paul Martin boasted this week that good times are just around the corner for Canadians.

“The era of cuts is ending. The finances of the nation are finally being brought under control,” Martin said in a Feb. 18 speech laying out the federal government’s 1997-98 budget.

Martin gleefully reported to Canadians that their federal government’s current account deficit for the 1996-97 fiscal year will rise no higher than $19 billion.

That’s $5.3 billion lower than the $24.3 billion deficit that Martin predicted last year.

It’s also a whopping $9.6 billion less than Ottawa’s 1995-96 deficit, making it the greatest year-to-year federal deficit reduction in Canadian history.

And Martin predicted that his government will either meet or exceed its deficit targets of $17 billion for 1997-98 and $9 billion for 1998-99.

He even predicted that by the year 2000, the federal government may not only bring in a balanced budget for the first time in many years, but may also produce a small budget surplus.

Martin also bragged that Canada’s financial stability is now better than any of the other G-7 nations, and that Ottawa’s debt to GDP ratio is better even than the U.S. government’s.

And he promised that there will be no more cuts to federal government programs and no new taxes.

“We are at the point where we are now able to forge a new destiny for ourselves,” Martin said.

He also suggested that the Liberal government will soon start paying less attention to the deficit and more attention to the needs of the poor.

“If we have been forced to spend much of our energy addressing financial problems inherited from the past, now, with those problems on the way to resolution, we can focus on the promise of the future – on the great national challenges that lie ahead,” Martin said.

“Let us never come to believe that there is a such a thing as a tolerable level of child poverty or that a growing gap between the rich and the poor is ever acceptable.”

No tax cuts for now

But Martin said it’s still to early to bring in sweeping tax cuts that would allow all Canadians to share in the benefits of federal deficit reduction.

And he did not utter the phrase “Goods and Services Tax.” Last year, the Liberal government had to apologize for breaking an election promise to get rid of the hated GST.

But he did announce some selective changes to the tax system aimed at putting more money into the hands of low income families, disabled people and students.

Action on child poverty

During his budget speech, Martin repeated earlier commitments to develop a national child benefit system aimed at putting more money into the hands of low income people with children.

By July of this year, the maximum Working Income Supplement will be increased to $605 a year for one-child families, $1,010 a year for two-child families, and to $330 for each additional child.

By July of 1998, that benefit will be raised to $1,625 for one-child families, $3050 for two-child families, and to $1,425 for each additional child.

At the same time, Ottawa will seek an agreement with Canada’s provincial and territorial governments under which they will promise not to cut social assistance payments, and will put new money of their own into child poverty programs.

More for infrastructure, education, housing

The Liberal’s make-work infrastructure program will also be extended for the 1997-98 fiscal year, Martin said.

Ottawa will put and extra $425 million into the program this year, bringing its contribution up to $600 million, Martin said.

Provinces, territories and municipalities will be expected to make their own contributions, resulting in $1.8 billion in infrastructure programs for 1997-98.

Many Nunavut communities have already used infrastructure program money for various local projects.

As well, Martin said Ottawa will spend $50 million to pay for home renovations for low income Canadians, seniors, persons living in indadquate housing in remote communities and Indian reserves, and for shelters for victims of family violence.

There will also be higher tuition fee deductions for students, and more money for universities and research institutes.

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