The Largest Debt Pay-Down Ever

September 20, 2000

The government today announced a surplus for 1999-2000 of $12.3 billion.

All of this amount will be paid against the public debt -- making it the largest debt pay down in Canadian history.

It also marks the third straight surplus – the first time a federal government has achieved this in over 50 years.

A few years ago we said we would cut up the federal government’s credit card—now we’re paying the credit card off.

This record debt payment is yet another dividend from the extraordinarily effective economic and balanced fiscal management that the Liberal government continues to provide Canadians.

In the last three years, we have reduced the debt by close to $19 billion. As a result more than $1 billion a year in interest payments will now be freed up to address the top priorities of Canadians -- like health care, access to higher education, investing in knowledge and innovation and lower taxes.

Since balancing the books, fully two-thirds of all new spending has been directed to health care, education and innovation.

Ongoing surpluses mean that we can afford the $23-billion new investment announced for the Health Action Plan that will sustain and renew Medicare.

It means that we can accelerate the $58 billion we’ve already allocated to our Five-Year Tax Reduction Plan.

It means that we can keep the debt burden on a permanent downward track.

In 1995, the debt to GDP ratio was 71 per cent – an all-time high. It has now fallen to 58.9 per cent - a drop of more than 12 percentage points.

And the fiscal plan outlined in Budget 2000 projected it to fall below 50% by 2004-05.