Making Choices - The 1998 Pre-Budget Public Consultation
The federal and provincial governments for many years had large deficits. When government expenses are greater than revenues, the difference is "the deficit". These deficits forced governments to borrow large amounts of money and greatly increased the size of the public debt. The cost of making interest and debt payments began to erode the ability of governments to maintain essential public services.
All governments in Canada found it necessary to reduce their deficits and strived to eliminate them. In 1997-98 five provincial governments are forecasting a balanced budget or surplus. The federal government now too forecasts a 1997-98 balanced budget.
We have also reduced our deficit. By taking prudent measures, we have accomplished this while ensuring essential public services are protected. Last year we implemented multi-year budgeting, bringing forward our first three year budget plan. This plan calls for us to move toward a balanced budget by 1999-2000. We can attain this goal only if we keep expenditures under control. Yet there is pressure in many areas for increased spending.
This is the challenge of budget preparation. On one hand, we must eliminate the deficit if we are to have sustainable public services over the longer term. On the other hand, many public services could be improved by funding them at higher levels.
The art of budget preparation is striking a balance between the legitimate needs of the people for public programs and services and the need for prudent financial management to ensure those services can be maintained and improved over time.