The Budget in Brief 1995 - 3
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Archived - Securing the Deficit Targets

"We have said from the beginning that we would meet our targets - come what may. Therefore, those gaps must be closed. With this budget we are closing them."

"We have always said that our 3-per-cent interim target was a station on the way, not our ultimate destination. Interim means interim."

The budget closes the gaps and meets the targets. It achieves cumulative savings of $15.6 billion over the two fiscal years, 1995-96 and 1996-97.

In 1997-98, the measures in the budget will continue to pay off, with further savings of $13.3 billion.

The budget delivers cumulative savings of $29 billion over three fiscal years. This is the largest set of actions in any Canadian budget since postwar demobilization.

The savings come primarily from $25.3 billion of cumulative spending reductions - nearly $7 of spending cuts for every $1 of new tax revenue.

There will be a reduction in program spending from $120 billion in 1993-94 to under $108 billion by 1996-97.

The budgets of government departments are being reduced dramatically, in several cases halved over the next three years.

The budget proposes a small number of tax measures to increase fairness and tighten the tax system and to help meet deficit targets. Personal income tax rates are not being raised.

Impact of budget measures
3-year ^[1]

	1995-96	1996-97	1997-98	impact
	(billions of dollars)
Expenditure reductions
Program review	3.9	5.9	7.2	16.9
Other	0.2	3.5	4.7	8.4
------------------------------
Total	4.1	9.3	11.9	25.3
Revenue measures
Increase fairness and tighten tax system	0.1	0.4	0.6	1.1
Tax increases	0.9	0.9	0.8	2.6
Total	0.9	1.3	1.4	3.7
Total direct impact of fiscal actions	5.0	10.6	13.3	29.0
Ratio of expenditure reductions/ tax revenue increases	4.4:1	7.3:1	8.3:1	6.9:1
[1] Three-year cumulative impact of deficit reductions shows the reduction in net debt, by the end of the 1997-98 fiscal year, arising from fiscal actions.

Numbers may not add due to rounding.

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