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Finance Minister Predicts Growth

May 17, 2001

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OTTAWA (AP) _ A global economic slowdown has affected Canada, but not enough to prevent growth of 2.4 percent this year, Finance Minister Paul Martin said Thursday.

In an assessment of the Canadian economy delivered to a Parliament committee, Martin also said the government expected a record surplus of more than $15 billion Canadian ($10 billion) in the budget year that ended March 31.

The surplus, the fourth straight by the Liberal Party government, would help pay down the $564 billion Canadian ($375 billion) national debt, he said.

``This is the payoff of a prudent planning approach,″ said Martin, a known aspirant for the prime minister’s office.

While describing the overall economic outlook as uncertain, Martin said the government would keep a close watch on developments to prevent harm to Canada.

``That the global economy is slowing is clear,″ he said. ``Our job is to enable Canadians to ride through the downturns and to take advantage of the upturns.″

The government would meet all its spending commitments and also fulfill the promise of last November’s federal election campaign to cut taxes by $100 billion Canadian ($65 billion) over five years, Martin said.

He forecast another large surplus in fiscal year 2001-2002, and said growth would be about 2.4 percent.

``Looking ahead, our long-term plan means we will continue to cut taxes, it means we will continue to cut debt and it means we will continue to control spending,″ Martin said.

He said the core inflation target agreed to with the Bank of Canada would remain at 1 to 3 percent for the next five years.

Martin’s Liberal Party won a third straight Parliament majority in the November election, giving Prime Minister Jean Chretien another five-year term in the post he has held since 1993.

Martin is considered a top candidate to succeed the 67-year-old Chretien if he steps down before his term ends.

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