It was the budget speech that several generations of finance ministers could only dream of delivering.
Last week, finance minister Paul Martin announced the first balanced budget in 28 years, predicted at least two more years of balanced budgets and debt pay-down, and a bevy of spending programs and selective tax cuts.
“Let me simply say to Canadian business, consumers, employers and workers, there has not been a time in the last 25 years when our prospects have been better,” Martin told the House of Commons Feb. 24.
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He said he can promise three years of balanced budgets for the first time in almost half a century.
And for students facing high debt loads, Martin announced a $2.5 billion “millennium” scholarship fund, a break on interest for students trying to repay large student loans, help for parents setting aside money for their children’s’ education and grants of up to $3,000 annually for impoverished students with children.
“The demand for knowledge and skills spans all occupations, at all levels, in all sectors, from factory to farm, from software to sales, from medicine to mechanics,” said Martin.
Surtax axed
The finance minister also announced what he said were $7 billion in tax cuts over three years – an increase in tax-exempt income for lower income Canadians and an end to the 12-year-old three percent surtax for those earning less than $50,000 and a reduction for those earning up to $65,000.
Martin said it is just a beginning. “Let there be no doubt. As soon as we can afford it, taxes will be further reduced.”
Many times during his 85-minute budget speech, Liberal MPs were on their feet applauding the advent of good news.
But opposition critics were quick to condemn.
Reform leader Preston Manning conceded that the first balanced budget in 28 years was a “milestone, but the budget was balanced on the backs of taxpayers.”
He complained that Martin concentrated more on new spending than on tax relief.
New Democratic Party leader Alexa McDonough, along with labor leaders, criticized the Liberals for not making job creation and unemployment reduction more of a priority.
The budget projects unemployment above eight percent for at least the next two years.
Economists who watched the budget presentation also suggested that Martin was being too conservative in his projections.
They predicted that rather than a balanced budget next year, there likely will be a surplus of several billion dollars.
Martin consistently has under-estimated the good news. The last estimate for the fiscal year ending March 31 was for a $17 billion deficit but revenues have been strong enough to balance the books.
