Canada records $13.8B budget
surplus Politics Watch® News Services
September 27, 2007, updated 2:30 p.m.
|Prime Minister Stephen Harper and Finance
Minister Jim Flaherty .
The Conservative government announced Thursday that it posted a
$13.8 billion budget surplus for the last fiscal year.
Prime Minister Stephen Harper, who in opposition characterized
surpluses as over taxation, made the announcement along with Finance
Minister Jim Flaherty in Toronto.
This year's surplus is substantially larger than the $9.2 billion
surplus that was forecasted.
The government will direct the entire surplus to pay down Canada's
The resulting $725 million in interest savings will be returned to
Canadians in the form of tax cuts under a "tax back"
policy introduced by Flaherty last year.
Canada's national debt now stands at $467.3 billion down from its
$562.9 billion in 1996-97.
Using the entire surplus to pay down debt differs from the approach
of the previous Liberal government, which would often use some of
the surplus for new government spending.
"We're not going to use this extra savings the way the previous government
did," Harper told reporters.
The prime minister said his government would stay the course and
continue to hold the line on government spending and use any future
surpluses to pay down debt.
Flaherty said the large surplus "confirms Canada's economy has posted another strong year."
However, the finance minister said the economy continued to face
"challenges," such as the impact Canada's strong dollar is
having on the manufacturing sector.
While Harper and Flaherty described the large surplus as good news,
the Canadian Taxpayers Federation criticized the Conservatives for
embracing large budget surpluses now that they are in
"Ottawa continues to take too much money out of the pockets of Canadian families and
businesses," John Williamson, federal director of the Canadian Taxpayers
Federation, told PoliticsWatch in an interview.
"I tend to think Canadians increasingly view these massive surpluses as an over taxation and recognize they are being gouged."
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