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Foreword by the Minister of Finance

The global recession has created unprecedented uncertainty for the world economy. Although there have been early signs of stabilization, the situation remains fragile and we can expect to continue to feel the impact of the economic slowdown. The Canadian economy is not immune to the effects of this global recession and this economic uncertainty. That is why our Government will stay the course and ensure the implementation of stimulus measures included in Canada’s Economic Action Plan in order to create and maintain jobs.

Canada is much better off than most of its G7 colleagues. Our deficit and debt levels are manageable and small relative to other countries. Our banks and financial system are the strongest in the world. The unemployment rate in Canada is 1 percentage point lower than in the U.S. We will weather the storm.

As private sector forecasts for the Canadian economy have changed, the Government is providing an update on the fiscal situation for the country. The global economic outlook has shifted drastically in the eight months since Budget 2009 but the Government remains committed to its plan to follow through on the implementation of stimulus measures and to return to balanced budgets in due course. Although the timing of this return to balanced budgets has changed, our commitment to achieving this goal has not. When the time is right—when our plan has been implemented, our recovery is entrenched and private sector forecasts become more certain—we will determine what additional spending restraint is necessary. The speed of our return, and the extent to which we would look at restraining growth in direct program spending will depend on the speed of the global economic recovery. But given the uncertainty in private sector forecasts in the outer years, those measures may be unnecessary.

The Government is staying the course on policy measures included in Budget 2009 and the Government will return to a balanced budget as the economy recovers. Our number one priority is to ensure timely recovery by continuing to implement the Action Plan to create and maintain jobs in the near term.

Sincerely,

The Honourable James M. Flaherty
Minister of Finance