13.2 Billion Canadian Surplus
September 26, 2006
The federal government posted a whopping $13.2-billion surplus last year that has gone straight to paying down the national debt.
Finance Minister Jim Flaherty made the announcement yesterday in his annual financial report, crediting big revenues and tighter spending controls — including the lack of a traditional year-end Liberal spending spree, he said.
Flaherty and Treasury Board President John Baird also announced the Conservative government is chopping $1 billion in program spending it describes as “fat,” including medical marijuana research and funding for groups to sue the government.
The debt payment lowers Canada’s debt to $481.5 billion from its peak of $562.9 billion nine years ago.
“Anyone with a mortgage or credit-card balance knows that paying down the debt makes good sense,” Flaherty said.
The days of huge, unanticipated surpluses are over, due in part to the softening U.S. economy and the Conservatives’ intention to improve budgeting practices, Flaherty said.
“We’re budgeting closer to the line,” he said.
The surplus in 2003-04 was $9 billion. It was $1.6 billion in 2004-05 after the Liberal government of the time spent unexpected revenues prior to the fiscal year-end.
Baird said the cuts, spread over this year and next, allow the government to focus its spending on the priorities of Canadians, including safer streets, cleaner air and secure borders.
Flaherty said they found “numerous examples of waste and duplication.”
The cuts are expected to eliminate up to 340 jobs, all of which should be erased through attrition, Baird said.
Liberal finance critic John McCallum said the cuts include adult literacy programs, youth employment programs, internships, regional development programs and social programs.
“I question why we need to have over $100 million of cuts to programs of that kind in a year when we have a $13-billion surplus,” he said.
Taxpayer and conservative groups applauded the end of the Court Challenges program, through which legal groups are paid to challenge federal laws in court.
John Williamson of the Canadian Taxpayers Federation said the surplus ends all doubt that every Canadian should see more tax relief in next year’s budget.
“A big reason for today’s surplus is not managerial competence, but Canada’s sky-high taxation,” Williamson said.