The Canadian Institute of Chartered Accountants is urging the federal government to secure Canada’s future by focusing on the immediate safety concerns stemming from the September 11 terrorist attacks, while also safeguarding our economic prosperity through a continued commitment to debt reduction and tax cuts.

“We understand and fully support the government as it contemplates new expenditures to address national security issues,” said CICA vice chair Pierre Brunet. “However, let us not forget that in recent years the government has made considerable progress in putting in place an ambitious overall agenda that provides for debt reduction and tax cuts. To ensure this country’s long-term financial soundness, the government should continue to assign a high priority to debt reduction and tax cuts, while reallocating existing funding to the extent possible to ensure the safety and security of Canadians.”

Interest on the debt still consumes close to one quarter of federal revenues, and Canada’s debt to GDP ratio, while lowered over the past five years through debt reduction initiatives, remains at 52%, higher than that of most of Canada’s trading partners. CICA believes that Canada will be in a stronger financial position when its debt to GDP ratio reaches 40%. “As the Finance minister himself has acknowledged, lowering the debt to GDP ratio increases the flexibility the government has to address key priorities of Canadians,” said Brunet.

The CICA is also urging the government to stay the course on tax cuts, which it believes could serve as an economic stimulus at a time when it is badly needed. “Tax cuts increase GDP growth, consumer spending and business investment, while boosting personal savings rates, reducing unemployment and improving corporate pre-tax profits,” said Brunet. “Given the slowing economy and the economic impact of September 11, we believe this stimulus is desirable, viable, and crucial to the Canadian economy.” CICA warns that additional or new spending programs or commitments would jeopardize the government’s ability to deliver on its current debt and tax reduction commitments.