Olympic Victory: Flaherty On Track to Eliminate the Deficit

The stellar performances of our young Canadians at the Sochi Olympics seem to have inspired the Federal Finance Minister as he released his 10th budget today.

He proudly announced that the $55 billion deficit we inherited with the financial crisis will be within $3 billion of elimination by 2015. In addition, a $6.4 billion surplus is anticipated by 2016; which includes a $3.0 billion annual adjustment for risk.

The path to reaching these goals is certainly a significant career achievement by this Finance Minister. According to the budget, the federal debt-to-GDP ratio is expected to fall below its low, pre-recession level in 2017–18. This will help the Federal Government achieve its target of 25 per cent of GDP by 2021, announced at the September 2013 G-20 Leaders' Summit in St. Petersburg, Russia.

In fact, if the mastery over the debt and deficit is achieved as planned in this budget, Canada will be in a very advantageous position against the fiscal performance of other nations. According to the budget, Canada's total government net debt (which includes that of the federal, provincial/territorial and local governments as well as the net assets of the Canada Pension Plan and the Québec Pension Plan) will remain the lowest of any G-7 country and among the lowest of the advanced G-20 countries.

What does this mean for average Canadians? In a nutshell, three key advantages says the Budget: a strong investment climate that will support economic and job growth, lower debt-servicing costs and, as a result of both those factors, lower taxes over the long run. 

The following articles discuss the details of the specific economic and tax provisions in this budget.