Archived - Invitation by the Honourable James M. Flaherty, P.C., MP Minister of Finance to Pre-Budget Web Consultations

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April 6, 2006

Thank you for sharing your views with me. It’s an important opportunity to continue the dialogue that Prime Minister Stephen Harper started during the last election. It’s important that I get your views and advice as I craft our government’s first budget, and set the stage for future budgets.

I take this dialogue seriously. Canadians sent us to Ottawa to set a new standard; to be more accountable, to be prudent and to be fiscally responsible.

This starts by focusing on the five core priorities outlined in our election platform:

  • cleaning up government by passing the Federal Accountability Act;
  • reducing the tax burden of Canadians, starting with a one-percentage-point cut to the GST;
  • making our streets and communities safer by cracking down on crime;
  • supporting families by providing a $1,200 per year Choice in Child Care Allowance for each child under six, and providing tax credits to employers who cover the full cost of creating child care spaces; and
  • working with the provinces to improve health care by establishing the Patient Wait Times Guarantee.

What does this mean for budget making? It means keeping our word and addressing other challenges and opportunities we face. It means making choices: difficult but necessary choices.

As I sit down to craft our government’s first budget I am approaching it much like a typical Canadian family: setting priorities, making realistic choices and finding ways to live within our means.

Yes, Canada is enjoying one of the longest periods of uninterrupted economic growth in its history. In fact, we are in our 15th consecutive year of expansion (the second longest in history). And yes, that means increased revenues for our government. But, while the economy continues positive—with unemployment at a 30-year low—we must not, and we will not, take such growth for granted.

When I met with the other G8 finance ministers in Moscow, both high and volatile oil prices, and global imbalances—such as the $800-billion current account deficit confronting the U.S.—were seen as key risks to the global economy.

We are not immune from such risks. That’s why fiscal discipline is so important to budget planning.

And this means, in preparing the next federal budget, we start from the premise that we can’t do everything all at once. Our action plan must be focused and affordable, and we will stick to that plan.

We believe balanced budgets and debt paydowns are essential to building an even brighter future for Canadians. They’re not something you bargain away during budget deliberations.

And I continue to believe that paying down debt is essential—not only because we have an obligation to the taxpayers of today, but also because we have an obligation to the generations of tomorrow.

We must also keep a lid on spending, making sure Canadians receive good value for their hard-earned tax dollars.

In the previous fiscal year, federal spending jumped by 15 per cent—six times the rate of inflation.

As the Prime Minister concluded, that kind of spending growth is simply unsustainable.

That’s why our government has committed to limit future growth on federal grant and contribution programs and within federal departments and agencies by reallocating money from existing programs.

And that’s why I am now working with Finance and Treasury Board officials to ensure that the spending of taxpayer dollars will be limited only to those programs that are efficient and effective.

So there are certainly some tough decisions ahead, and that’s why I look forward to hearing your ideas and suggestions.

I would like to pose two questions to help get started—not only on our first budget, but also regarding the longer-term objectives and needs you think we should address in later budgets.

First, what are your expectations for our first budget? What needs to be done now, and how can we best lay the groundwork for action later on?

Second, if you believe there are additional, critical investments we must make—be it new spending, or further, faster tax relief—then where should we spend less? What are the specific trade-offs you feel should and could be made? How can we deliver programs more efficiently and effectively?

In closing, let me just say that I believe a budget is one of the most important measures by which any government is judged. Is it living up to its responsibilities, is it keeping its word, and is it being fully accountable for its actions?

Canadians have every right to expect from their government the same behaviour that they themselves must live by every day at work and in their family life.

I’m sure the insight, ideas and advice you share with me will help our government do just that.

Thank you.