Deputy Prime Minister and Minister of Finance John Manley announced today
that the federal surplus was $8.9 billion for the fiscal year 2001-02 . This is the fifth consecutive year the federal budget has been in surplus. The entire amount will be used to reduce the public debt.

The public debt was $536.5 billion at the end of 2001-02.

In total, Canada’s public debt has been reduced by $46.7 billion from its
peak in 1996-97. “The result of prudent planning, responsible fiscal management and a commitment to not return to deficit, has enabled Canada to continue to achieve a budgetary surplus while most other major economies have recorded deficits,” said Manley in a news release. “The reduction in the debt translates into ongoing interest savings of $3 billion per year. This leaves us more resources available to reduce taxes and tofund valued programs and services such as health care and education.”

The minister added that this approach enabled the government to cope with economic slowdown and fund a comprehensive package of security measures following last year’s terrorist attacks without jeopardizing its five-year
$100-billion tax reduction plan. The plan was introduced in 2000.

Also, the debt-to-GDP ratio is now 49.1%, down sharply from its peak of almost 71% in 1995-96. It is now at its lowest level since 1984-85. Market debt has declined to 40.5% of GDP from 57.9% in 1995-96. The amount of revenue generated by federal taxes in 2001-02 was 15.9% of GDP, a significant decrease from 16.9% the previous year. This reflects tax savings realised by all Canadians under the Government’s tax reduction plan. Program spending increased by 6.1% in 2001-02 to $126.7 billion, $3.9 billion lower than estimated in the December 2001 budget.