By Stewart Lewis

(February 4 – 17:00 ET) – Since the federal surplus is predicted to grow, Ottawa should develop a medium-term fiscal plan, urges economist Thomas Wilson.

Wilson delivered his comments yesterday at the Canadian Tax Foundation conference on competitiveness. Wilson is director of the Policy and Economics Analysis Program (PEAP), Institute for Policy Analysis at the University of Toronto.

Surplus growth should not come as a surprise, says Wilson. “We should have surpluses in a strong economy,” he says. But we should not forget that the role of government is to prepare for times when the cycle turns down again.

This will be more difficult, he concedes, with many in Canada’s government insisting on zero-deficit policies. He and his PEAP colleagues are urging Ottawa to divide surpluses, devoting 25% to debt reduction, 25% to new spending and 50% to tax reduction.