• Ottawa aims to eliminate Canada's debt in less than a generation
  
• Spending to rise 7.1% this year, up from '06 budget projection of 5.3%

OTTAWA:The Canadian Taxpayers Federation (CTF) reacted to the Economic & Fiscal Update delivered this afternoon by Finance Minister Jim Flaherty before the House of Commons Standing Committee on Finance.

Minister Flaherty announced a policy to reduce Ottawa's debt by 2021. At the end of 2005/06 the federal debt stood at $481.5-billion. Last year, Ottawa spent $33.8-billion on debt servicing. Another $34.8-billion will be spent on interest this year. That works out to $95-million a day.

"Since 1997, the Canadian Taxpayers Federation has called for Ottawa to implement a legislated debt relief schedule and eliminate the debt in a generation," said CTF federal director John Williamson. "Today, Finance Minister Jim Flaherty announced the Government of Canada will do just that."

Williamson continued, "We applaud Mr. Flaherty for embracing and adopting policy advanced by the taxpayers' federation, but for this policy to be meaningful the Conservative government must table legislation to make it the law of the land. Otherwise it is an empty promise. With the national debt standing at $481.5-billion, lawmakers cannot afford to not take debt repayment seriously."

Federal Spending Rising

Government Policy Commitment from today's Economic & Fiscal Update:

"Canada's New Government is committed to keep the rate of growth of program spending, on average, below the rate of growth in the economy."

"-as a matter of principle, the Government's approach to fiscal planning will limit the rate of growth of program spending, on average, to below the rate of growth in the economy."

"In the May budget, Minister Flaherty reported program spending would grow by 5.3 per cent this year yet today he reported the annual spending increase will instead be 7.1 per cent," observed Williamson. "The government has already betrayed its commitment to keep program spending below the growth rate of the economy. Economic growth is estimated to be 2.8 per cent this year. It is disappointing the Conservative government's spending is already way off target. And if spending targets are missed, meaningful tax relief in the next budget can't happen and debt repayment just isn't possible either."