Surplus
Robair @ Wed Oct 13, 2004 7:28 am
$1:
Surplus bigger than we thought: Goodale
Canadian Press
Wednesday, October 13, 2004
ADVERTISEMENT
OTTAWA (CP) -- The federal government confirmed Wednesday that its tax intake massively outweighed spending in the past fiscal year _ producing a budget surplus of $9.1 billion.
The surplus for the year ended March 31, the seventh annual surplus in a row, was almost five times the $1.9 billion the government originally forecast.
"Consistent with generally accepted accounting principles, the $9.1 billion has been applied to reduce Canada's federal debt," said a news release from Finance Minister Ralph Goodale.
That debt stood at $501.5 billion at the end of March, down by $61.4 billion from its peak in 1996-97.
Wednesday's release noted that the federal debt as a proportion of the total economy is down to 41.1 per cent, compared with a peak debt-to-GDP ratio of 68.4 per cent in 1995-96.
"The government's bottom line received a $5.1-billion boost from stronger-than-expected revenues," Goodale stated.
"Thanks to a resilient economy, the level of incomes and government revenues were higher than estimated in the last federal budget, illustrating that the Canadian economy successfully weathered the problems of 2003, which included BSE, SARS and the significant appreciation of the Canadian dollar."
Despite tax reductions which took effect in 2003, tax revenue rose faster than both personal incomes and corporate profits, and the overall budgetary take increased by $8.4 billion or 4.7 per cent.
Program expenses grew 5.8 per cent, but public debt charges declined by $1.5 billion. Ottawa's interest expenses for the year swallowed 19.2 per cent of revenue, down from the early-'90s level of 39 per cent.
The report of the unexpectedly large surplus came one day after federal public servants walked off the job to press for a pay raise, and amid a clamour from provincial and municipal governments for a bigger slice of the revenue pie.
The surplus is finalized only now because it takes Ottawa five or six months to collect all its taxes, pay its bills and close each year's books.
When he delivered his first budget in March, Goodale predicted a $4-billion surplus for the current 2004-05 fiscal year _ a forecast that now looks ultra-conservative
Canadian Press
Wednesday, October 13, 2004
ADVERTISEMENT
OTTAWA (CP) -- The federal government confirmed Wednesday that its tax intake massively outweighed spending in the past fiscal year _ producing a budget surplus of $9.1 billion.
The surplus for the year ended March 31, the seventh annual surplus in a row, was almost five times the $1.9 billion the government originally forecast.
"Consistent with generally accepted accounting principles, the $9.1 billion has been applied to reduce Canada's federal debt," said a news release from Finance Minister Ralph Goodale.
That debt stood at $501.5 billion at the end of March, down by $61.4 billion from its peak in 1996-97.
Wednesday's release noted that the federal debt as a proportion of the total economy is down to 41.1 per cent, compared with a peak debt-to-GDP ratio of 68.4 per cent in 1995-96.
"The government's bottom line received a $5.1-billion boost from stronger-than-expected revenues," Goodale stated.
"Thanks to a resilient economy, the level of incomes and government revenues were higher than estimated in the last federal budget, illustrating that the Canadian economy successfully weathered the problems of 2003, which included BSE, SARS and the significant appreciation of the Canadian dollar."
Despite tax reductions which took effect in 2003, tax revenue rose faster than both personal incomes and corporate profits, and the overall budgetary take increased by $8.4 billion or 4.7 per cent.
Program expenses grew 5.8 per cent, but public debt charges declined by $1.5 billion. Ottawa's interest expenses for the year swallowed 19.2 per cent of revenue, down from the early-'90s level of 39 per cent.
The report of the unexpectedly large surplus came one day after federal public servants walked off the job to press for a pay raise, and amid a clamour from provincial and municipal governments for a bigger slice of the revenue pie.
The surplus is finalized only now because it takes Ottawa five or six months to collect all its taxes, pay its bills and close each year's books.
When he delivered his first budget in March, Goodale predicted a $4-billion surplus for the current 2004-05 fiscal year _ a forecast that now looks ultra-conservative
Kicks ass eh? At that rate it would only take about 60 more years to pay off the debt.
-Mario- @ Wed Oct 13, 2004 7:46 am
How does that work... Alberta is debt free, but not Canada???
Rev_Blair @ Wed Oct 13, 2004 2:58 pm
That's the provincial debt, Mario. Ralph paid it off on the backs of the poor and is still all he can to deny them any help whatsoever.
Alberta is still part of Canada though, and very much owes a share of the national debt. When Mulroney, somebody who drew a lot of support from Alberta, was in office; he pushed the debt up massively. At the same time Alberta was in a slump for much of that time period and using a lot of federal money. In fact, due to direct and indirect subsidies to the oil and gas industry, Alberta still sucks up a lot of federal funds.
Some of that surplus and every other surplus should be put into a rainy day fund for when the outlook is not so rosy. Some should be put into one-time expenditures, such as infrastructure programs. Martin's preoccupation with paying down the debt early has very little long-term effect and this country has been cash-starved for far too long. He really is paying the mortgage off early instead of fixing the roof so that there is still a house around when the mortgage is paid off.
Canadaka @ Wed Oct 13, 2004 6:59 pm
that is an interesting analogy Rev. I really don't know enough to have an opionion if paying down the debt is good or bad. I just know its good to be in the green, Not like our friends to the south who are plumiting more into debt.
Rev_Blair @ Wed Oct 13, 2004 8:22 pm
Don't get me wrong, I do believe in paying off the debt and not running deficits. I wouldn't cut gross taxation until there is no debt, although I would shift the base away from the working and middle classes. That includes cutting the GST.
The thing is that if you divide 9 billion into thirds, you can still make $3 billion in extra payment on the debt; put $3 billion away for the future because we all know that this can't continue indefinitely; and have $3 billion to invest in Canada.
Just dumping it all on the debt shows a lack of planning for the future and a mistaken faith that growth and surpluses will continue indefinitely.
sk1d @ Wed Oct 13, 2004 10:11 pm
There is good side to paying down tha debt.
The government has to pay interest on that debt wihich takes up a lot of money, 20% of the entire budget i think is what that article said.
If they had roughly $10Billion a year for the next 5 years, that entire debt is gone, which not only frees up that $10B, it also frees up the 20% of the budget which i'm sure is several 10's of billions of dollars., then they can spend billions of dollars, and pocket a few for themselves.
there some theories that eliminating the debt would be bad because of a reduction in demand for the dollar which reduces it value and so on.....
Rev_Blair @ Thu Oct 14, 2004 5:06 am
Having $10 billion a year for the next five years is doubtful though, sk1d. As it is we are the only G7 country to run a surplus for seven years in a row...stretching that to twelve is very much a long shot. Doing so at such a high rate is almost impossible.
Putting a third away for when we have a deficit instead of a surplus will keep us in the black when things get tough. Using the other third for one-time expenditures (no continuing programs because the money will not always be there) helps to create jobs, fix problems within Canada, and keep the economy growing.
Robair @ Thu Oct 14, 2004 5:28 am
sk1d sk1d:
If they had roughly $10Billion a year for the next 5 years, that entire debt is gone...
Ummm... debt = 500 billion. So at 10 billion a year (with no interest) that's 50 years...
Canadaka @ Thu Oct 14, 2004 8:58 am
can someone clarify the difference between debt and deficit?
Canadaka @ Thu Oct 14, 2004 1:30 pm
good show, cup o tea
Scape @ Thu Oct 14, 2004 1:58 pm
Total Canadian Federal Debt 2.7 Trillion
Now that's according to the conservative think tank The Fraser Institute. There are three levels of Debt in Canada Municipal (pays for roads, schools, police) Provincial (Education, Healthcare) and Federal (Defence, International trade). Alberta has payed the debt by slashing commitments to the municipal and federal as well as provincial levels so that they can also use the huge income being generated in the boom in the oil industry (Now at 54$/barrel and rising). The Klein government has done admirably in reducing it's debt and is now beginning to spend. The important part is the balanced budget. Think of the debt as a mortgage and the deficit is you monthly payments. It is supremely important that the budget be balanced, that's why the surplus was such a media splash as it could have been used to pay the debt down and prevent higher interest payments rather than be used as political hay.
The Party I represent (CAP) main political platform is trying to allow all three levels of government to be able to borrow from the Bank of Canada directly thus eliminating interest on taxes payed to private banks.
Rev_Blair @ Thu Oct 14, 2004 2:10 pm
The Fraser Institute is insane though, Scape. Their plan is privatise everything, including health care and pension plans. They would allow the government to do nothing but supply the military if it was up to them, and like the use of sub-contractors (mercenaries) whenever legally possible.
I like your party's idea for governments borrowing directly from the Bank of Canada, but using the Fraser Institute's data doesn't strengthen your case. In the past they've pushed for switching to the US dollar, which would basically make the Bank of Canada unable to lend anything.