By Gord McIntosh
(October 18 – 16:20 ET) – In its economic update today the Chretien government boasted of a fiscal position that has grown far stronger since 1997-98 when it balanced the budget with a $3.5 billion surplus.
After surpluses of $2.9 billion and $12.3 billion in the fiscal years of 1998-99 and 1999-2000 respectively, Ottawa expects to reduce the federal debt by $10 billion in the current year.
It is forecasting surpluses of $11.9 billion in 2000-01, $8.3 billion in 2001-02 and $7.6 billion in 2002-03.
As a result, federal debt as a percentage of the gross domestic product is now expected to fall to 48% at the end of 2002-03 from 58.9% at the end of 1999-2000.
Moody’s rating agency said when it took away Canada’s triple-A debt rating in February 1995 that the debt-GDP ratio should be below 50% before it would be returned. The ratio hit a peak of 71.2% in 1995-96.
In absolute terms, Ottawa’s debt has fallen to $554.5 billion in the current fiscal year from $579.8 billion in 1997-98.