ARCHIVED - Canada's Fiscal and Economic Progress
Transcript of the Minister's video presentation

You've heard it a lot lately:

"We are facing challenging and uncertain times."

It's true. Economies around the world, including our own, have slowed.

But this is not the first time we have faced difficult economic times.

In the early 90s, Canada faced another downturn.

At that time, Canada's unemployment was in double digits.

The annual deficit was more than $40 billion.

The national debt was rising, and interest rates were high.

But thanks to prudent planning, and the sacrifices and hard work of all Canadians, our nation's economic health was restored.

Indeed, it's thanks to that hard work that Canada is not only ready to face this latest economic downturn...

...we are, in fact, poised for recovery.

In fiscal year 2000-2001, the government recorded a surplus of $17.1 billion - the largest in Canadian history.

Our accumulated debt has fallen by almost $36 billion from it's peak five years ago.

Unemployment has dropped to about 7.5 per cent and interest rates are at their lowest levels in 40 years.

And now, in Budget 2001, I can confirm that for the fifth year in a row, the Government will again balance the budget.

This strong fiscal position allows the government to keep its commitments.

Such as its five-year, $100 billion, tax reduction plan.

And its commitment to enrich the Canada Health and Social Transfer that helps provinces and territories provide additional funding for health care and education.

And we will honour these commitments without forcing the country back into deficit.

In fact, not only is the Government forecasting a balance budget for 2001-2002...

...but for both the next two years we forecast budgets that are balanced or better.

And what does all this mean for Canada's $3 billion Contingency Reserve - that money we set aside each year as protection against unforeseen economic circumstances?

Well, I don't think anyone would disagree that a global downturn, accelerated as it was by the events of September 11th qualifies as an unforeseen circumstance.

For 2001-2002, to guard against going back into deficit the government has reduced the Contingency Reserve to $1.5 billion.

For the next two years, with two more balanced budgets, we will establish Contingency Reserves of $2 billion in 2002-2003 and $2.5 billion the following year.

If by then, as we expect, the recovery is underway and the Contingency Reserve will not be needed, we'll use it to pay down the debt.

The Government has had to make some difficult choices...

...choices that reflect a clear-eyed assessment of what we can and cannot do.

Budget 2001 demonstrates our determination to help Canadians through these tough times, to increase opportunity, enhance security and protect the integrity of the nation's finances.

To learn more about these choices, please take some more time to explore this website.