Economists praise Canada's debt reduction record
Last Updated: Wednesday, September 27, 2006 | 4:08 PM ET
CBC News
Many economists say Canadians should congratulate themselves for the steady progress in reducing the country's national debt.
At a time when many industrialized countries are still running deficits, the federal government announced this week that Canada's national debt will drop by another $13.2 billion when last year's fiscal surplus is applied to debt repayment.
Canada's Budget Surplus to Shrink to C$2.3 Billion (Update4) Wed Feb-27-08 12:20 AM
By Theophilos Argitis
Feb. 26 (Bloomberg) -- Canada's
budget surplus will shrink to the lowest since 2004 in the next fiscal year and to the smallest in a decade in the year after that, as the country suffers from the U.S. economic slowdown.
Finance Minister
Jim Flaherty released a C$239.6 billion ($244 billion) budget today that projects a C$2.3 billion surplus for the fiscal year that starts April 1, down 77 percent from the current year. The surplus will drop further to C$1.3 billion in 2009-10, the smallest since 1998.
Revenue will drop this year for the first time since 2001, leaving the government little room for new tax cuts and spending programs as Prime Minister
Stephen Harper seeks to protect a decade of consecutive budget surpluses in the world's eighth- biggest economy.
``We've prepared well for a period of slowdown,'' Flaherty, 58, told Bloomberg Television today, calling his budget ``prudent'' and ``realistic.''
The Bank of Canada says the country's economic growth will slow to 1.3 percent by the middle of 2008, compared with 3.7 percent in the same period last year. The government today lowered its own forecast for 2008 growth to 1.7 percent from an October projection of 2.4 percent.
Revenue will decline 1.1 percent to C$241.9 billion next fiscal year, from C$244.5 billion. Program expenses will rise 3.4 percent to C$208.1 billion, about half the projected pace for the fiscal year that ends next month.
Sending Signal
Canada has benefited from a global commodities boom that allowed governments to reduce the national debt by almost C$100 billion since 1997 even as spending rose. Debt reduction over the next three years will total C$6.6 billion, compared with C$37 billion over the previous three years.
Paying off Turdoh and Baloney's debt.