Getting Things Done Economically

September 28, 2007

As the Member of Parliament for Stormont Dundas and South Glengarry, I am happy to report that this year Canada’s New Government posted a budgetary surplus of 1.0 per cent of gross domestic product (GDP), or $13.8 billion.  The surplus reflects strong revenue growth and effective management of spending by the Government.  The surplus was $4.6 billion higher than forecast in the March 2007 Budget due largely to stronger-than-expected revenue growth.

The surplus of $13.8 billion for 2006-07, combined with a gain in other comprehensive income, resulted in a $14.2 billion reduction in the federal debt.  The debt reduction will result in approximately $725 million in ongoing personal tax reductions under the Tax Back Guarantee.  Combined with the interest savings and tax relief associated with debt reduction achieved in 2005-06 and planned in 2007-08, this will bring total annual personal tax relief provided under the Guarantee to $1.5 billion.

The Tax Back Guarantee is a legislated commitment to dedicate all effective interest savings from federal debt reduction each year to ongoing personal income tax relief.  It ensures that Canadians benefit directly from federal debt reduction.  Every dollar of interest saved puts more money directly into the pockets of Stormont Dundas and South Glengarry residents.

For 2006-07, budgetary revenues were 1.6 per cent higher than forecast, while program expenses were 0.4 per cent lower than forecast.  The Government is committed to managing overall spending to ensure they are consistent with Canadians’ priorities.  Public debt charges were 0.5 per cent lower than estimated.  Over the past two years, the federal debt has been reduced by an amount equivalent to $1,142 for each Canadian.  Our long term goals, is to ensure every Canadian is “debt free”.

Federal debt as a percentage of the economy was 32.3 per cent in 2006-07, less than one half of its peak of 68.4 per cent in 1995-96 and down to its lowest level in 25 years.  In Budget 2007, the Government set an objective of reducing the debt-to-GDP ratio to 25 per cent by 2012-13.  The results for 2006-07 indicate that the government is well placed to exceed that objective.

The Organization for Economic Co-operation and Development estimates that Canada was the only Group of Seven (G-7) country to post a surplus in 2006.  In addition, Canada’s total government net debt burden is the lowest in the G-7 (this includes debt of federal, provincial-territorial and local governments as well as assets of the Canada Pension Plan and Quebec Pension Plan).

I believe each and every constituent in the riding of Stormont Dundas & South Glengarry should be extremely proud of the financial performance of their federal government.