Canada Unveils Balanced Budget
Feb. 24, 1998
TORONTO (AP) _ The government presented Canada's first balanced budget since 1970 on Tuesday, a milestone resulting from billions of dollars in spending cuts since the Liberal Party came to power in 1993.
Finance Minister Paul Martin offered modest tax breaks in the 1998 budget, plus a new scholarship fund for post-secondary students, but he promised the books would remain balanced for at least the next three years.
``Canadians have paid to see the movie `The Deficit,''' Martin told the House of Commons in Ottawa. ``They don't want to pay to see the sequel.''
Martin was the official on the spot when the Liberals, under Prime Minister Jean Chretien, took office in 1993 facing a more than $30 billion deficit. Big cuts followed, especially in transfer payments to the 10 provinces for health care and education.
Martin received a standing ovation from his colleagues when he announced that the deficit had been erased and declared, ``This is a turning point in our history.''
The biggest new program in the budget is the so-called Millennium Scholarship Fund, allocating $1.75 billion to aid college and university students who have been complaining about rising tuitions and heavy post-graduation debt loads.
Martin also offered tax relief for low-income families and increased child care credits, but there were no major tax reductions for middle- and upper-income Canadians.
He proposed an annual contingency fund of $2.1 billion that would be used to help pay off the $406 billion national debt if the funds were not needed elsewhere.
The budget calls for spending of $73.1 billion on programs in 1998-99.
Technically, the budget was a secret until Tuesday afternoon, but Chretien gave a broad hint on Monday when he publicly presented Martin with a bottle of black ink.
Opposition parties already have offered criticisms. The right-wing Reform Party said there should have been bigger tax cuts rather than any new spending, while the left-wing New Democratic Party said Martin should have set firm targets for reducing the country's jobless rate of nearly 9 percent.