Returning to Balance
- Economic Action Plan 2015 returns our Government to a Balanced Budget with a surplus of $1.4 billion and a contingency of $1 billion.
- A balanced budget is the only way to ensure long-term prosperity for Canadians.
- It clears the way for further tax relief, protects health and education funding, and strengthens our ability to respond to unavoidable and unexpected events in a volatile world.
- Most importantly, it means we can leave our children and grandchildren with an even more prosperous country.
- The opposition have been clear: they would drastically increase spending and put us back into a deficit.
- This path leads to the crushing structural deficits that plagued this country for years.
- When the Liberals finally figured out the disaster this country was facing, they were forced to make brutal cuts that put in great danger public health care and education.
- We will not follow that path to economic decline.
Balanced Budget Legislation:
- Economic Action Plan 2015 will enshrine the Harper Government’s prudent and pragmatic fiscal approach in law, through proposed balanced budget legislation.
- Acceptable deficits would occur only in times of recession or extraordinary circumstances, such as war or natural disaster.
- Within 30 days of a published deficit, the Finance Minister would be required to appear before the House of Commons Committee on Finance and present a plan with firm timelines to return to balanced budgets.
- The plan would include a freeze on operating spending and a wage freeze for ministers and deputy ministers, to be implemented when the recession is over.
- When deficits occur outside of extraordinary events, the salaries of ministers and deputy ministers would be reduced by five per cent.
Responsive: Why has your government run deficits for the last 7 years?
- When our government came to power we reduced the national debt by $37 billion through aggressive debt repayment.
- In 2008, the world was rocked by the greatest financial meltdown since the Great depression.
- We responded with extraordinary measures to protect the financial security of Canadians.
- But we did so temporarily and with a clear promise to return to balanced budgets as soon as possible.
- Through Economic Action Plan 2015, we are fulfilling that promise.
- While other countries continue to struggle with debt that is spiralling out of control, Canada remains in the most enviable fiscal position among all G-7 countries.
- In 2014, the IMF expects Canada’s net debt-to-GDP ratio to be 39.5%, the lowest level among G-7 countries (87% average).
- Canada has a strong Triple-A credit rating that only a few of our international allies can boast.
Protecting Transfer Payments:
- Unlike the previous Liberal government, we will NOT cut major transfers to persons (i.e. seniors, pensions, children, etc.) or other levels of government (i.e. health, education, social services, etc.).
- We’ve restored fiscal balance through long-term transfer support to provinces and territories.
- Federal support has reached historic levels (nearly $68B) – that is a 62% increase since the Liberals were in government.
- Federal support for health, education, and social services has increased 59% since we formed government.
- We’ve also made changes to ensure that transfers grow in the line with the economy – allowing the program to remain affordable and sustainable.
Cost Saving Measures:
- Since 2006, we have taken a number of actions to make Government spending more efficient and cost-effective. Actions to date include:
- Making public sector wages and benefits affordable for taxpayers by ensuring compensation is fair and in-line with other public and private sector employers.
- Improving the fairness of the tax system by closing tax loopholes and strengthening tax enforcement to ensure low taxes for all taxpayers – not only a select few. In fact we’ve closed over 85 tax loopholes, ensuring all Canadians pay their fair share.
- Controlling the size and cost of government by freezing departmental budgets to ensure efficiency in government operations and administration.
- Reviewing Government Assets, to ensure assets that can better create wealth and jobs for Canadians if were owned by the private sector are divested.
- Our Government has reduced government departmental spending for four straight years – a trend that has not been observed in decades.
- Overall, since 2010, actions we’ve taken to make government more effective and efficient are saving taxpayers roughly $19 billion a year.