The 2000 Economic Statement and Budget Update
A Renewed Debt Repayment Plan

October 18, 2000

Thanks to the commitment and dedication of hard-working Canadians, Canada has entered a new era of strong economic growth and budget surpluses.

Just as Canadians pay down their credit cards when times are good – so must governments.

Reducing the public debt burden is one of the most important steps we can take as a government to ensure a brighter future for our children. We owe it to them.

In 1998 – having eliminated the deficit - we announced a Debt Repayment Plan, based on continued unswerving fiscal discipline, prudent economic forecasts and an annual $3 billion Contingency Reserve - any unused portion of which would be used to pay down the debt.

The goal of our plan was to put our debt-to-GDP ratio – once among the highest in the G-7 – on a permanent downward track. And it has worked.

In 1999-2000, the debt-to-GDP ratio fell to 58.9% -- down from a post-war peak of 71.2% in 1995-96.

A few weeks ago, we announced a $12.3 billion pay down of the national debt in 1999-2000- the largest in Canadian history – bringing our total debt reduction over the past three years to $18.7 billion.

The 2000 Economic Statement and Budget Update adds an important new dimension to the Debt Repayment Plan.

In addition to the $ 3 billion Contingency Reserve, from now on, we will also announce each fall whether fiscal and economic circumstances will allow us to pay extra against the debt

This fiscal year, the government is committed to paying off at least $10 billion of the public debt.

With a renewed Debt Repayment Plan and the continued vigour of the Canadian economy, our debt-to-GDP ratio will continue on its permanent downward track.

By 2005-06, we estimate it will have fallen to 40%.