As part of our 2004 federal election coverage, Investment Executive asked the major national political parties to outline their fiscal platforms.

Ralph Goodale is the Minister of Finance with the Liberal government.

First elected as Member of Parliament in 1974, Goodale returned to the House in October 1993. He was re-elected in the 1997 and 2000 general elections. In November 1993, he was appointed Minister of Agriculture and Agri-food.

He served as Minister of Natural Resources from June 1997 until January 2002, when he became leader of the government in the House of Commons.

On May 26, 2002, he was appointed Minister of Public Works and Government Services. He has also been the Minister responsible for the Canadian Wheat Board and Federal Interlocutor for Métis and Non-Status Indians. In addition, he has been responsible for the Office of Indian Residential Schools Resolution. He was appointed Minister of Finance on Dec. 12, 2003.

How low do you think federal public debt needs to be as a percentage of GDP? When would you expect to reach it?
The Liberal platform for Election 2004 is clear: we intend to maintain a contingency reserve of $3 billion that if unused, will be put toward debt reduction. In fact, this policy combined with prudent planning assumptions has allowed us to pay down the national debt by over $52 billion. This is saving Canadians $3 billion annually on interest payments. While debt charges consumed nearly 37¢ of every revenue dollar in the early 1990s they only consume 21¢ today.

A Liberal government would like to see the debt-to-GDP ratio fall. That is why the government has set an objective of reducing the debt-to-GDP ratio to 25% within the next 10 years. (Budget 2004)

Are you prepared to run deficits if necessary?
Working with prudent budget planning assumptions and maintaining the $3 billion contingency reserve to guard against unforeseen economic events, is a strategy that has and will continue to serve us well in staying in the black. The Liberal record — seven consecutive budget surpluses and the only G7 country in the black — speaks to our position on fiscal management and this record will continue to guide us into the future.

What areas of program spending can be cut to pay for election platforms such as health care, defense and funding the cities? How high are you prepared to let program spending go as a percentage of GDP?
Program spending, at about 11.8% in 2003-04, is near a post-war low relative to the size of the economy and well below the 16% of GDP recorded in the early 1990s. Budget 2004 projects that program spending will grow an average of 4.5% over the next two years, less than the rate of growth of nominal GDP over that period.

The Government recognizes the importance of managing tax dollars responsibly and delivering cost-effective and efficient government services. Following on the 2003 budget commitment to reallocate $1 billion from existing programs, programs have been cut and reductions have been made to all departmental budgets in 2004-05 and beyond.
We have also established the Expenditure Review Committee with a mandate to review all expenditures to ensure that spending remains under control and in line with the Government’s priorities. The expenditure review will generate savings annually, growing to at least $3 billion within four years.

Will you allow Canada’s banks to merge?
The Government is in the process of establishing clear guidelines for possible mergers in the financial sector. The government realizes that a viable financial sector is important to all sectors of the Canadian economy. The public interest, including all sizes and types of clients of the financial sector — both individuals and companies — will considered. A formal position on this issue will be provided by the Liberal government sometime in the fall.

Do you support a national securities commission?
Vibrant and efficient capital markets are essential to Canada’s continued economic growth and prosperity. We must ensure that our capital markets are regulated in the most effective way possible. That is why the Liberal government struck the Wise Persons’ Committee, an independent body formed by the federal government on March 4, 2003, to study the current securities regulatory framework and recommend the structure that will best meet Canada’s needs.

The Committee has submitted its final report in December 2003, which is currently being studied by the provinces, stakeholders and the federal government. I look forward to a solution on this issue in the near future.