Thank you very much, Madam Chair.
Friends and colleagues, it is an honour for me to be here today to discuss the expenditures of the Government of Canada.
I will just make a few opening remarks. I'm looking forward to your questions and your insights, and I'm sure your positive criticisms and guidance, as we move ahead.
One of the things that's interesting about responses to the budget, and I say this with some self-admission here, having also served in opposition, is that right after the budget comes out, many times--and I'm sure present audience excluded--the response from the opposition, and again I'm talking from painful experience, having been there, is that there is nothing in this budget. I just want to assure members...as you know, there is about $280 billion in this budget. Now there may be disagreement on how it gets spent and is dispensed, and I accept that, but I do think it's important to let Canadians know there is a lot of money in this budget. Some people may like that thought, some may not.
When it gets drilled down on the critics' side, someone will say, for instance, that there is nothing in the budget for seniors. There is actually $36 billion in the budget for seniors. People say there is nothing for agriculture. Just for the Department of Agriculture alone there is $2.9 billion.
So I think we can have agreement. Certainly there is a partisan nature to what we do, but I hope we all agree that there is a lot of taxpayers' hard-earned money that goes to running this government day to day, which is about $34 million a day just to keep the basic operations going.
I'd like to reflect on the fact that we hear concerns about a deficit, and quite rightly. This budget, as we indicated before it came out, was going to have the initial steps of a road map to get us back to a balanced budget. Just over two years ago, recognizing that we were moving into what has been seen largely as the worst global downturn probably since 1929, we said, “We're going to take on some deficit; we're going to intentionally, temporarily, go into debt so that we can provide some stimulus to the economy in this down time and in this downturn.” I'm sure there will always be debates on whether there was enough or whether it was too much, but this was an intentional move. We knew we would be moving into a deficit situation. We also said that at the end of this year that deficit spending will stop.
We now have a deficit, as you know from the figures, of about $53 billion. That means we're borrowing about $53 billion to complete all the spending to keep things moving day to day in government. And we have said we're going to get to a basically balanced position--almost all of that $53 billion taken care of--by the year 2014-15. People have said that's a gigantic and improbable--and some are saying impossible--task. It's a matter of how you break it down, and that's what this year's budget is about. First of all, we've sent the indicators, but you've seen many areas of increase in this particular budget. In the years following this budget, of course, the actual increase in spending itself is going to come to an end. We have debt charges that will continue to go up for a while.
With this budget and the numbers that are before you, people are quite rightly asking, how do you get rid of that $53 billion? Actually, we're trying to break it down into three large bite-sized pieces. The stimulus spending, which includes infrastructure, is about $19 billion. That's over at the end of this year.
If this glass of water represents let's say $50 billion plus.... Any time I round off a billion, please don't think I don't think a billion dollars isn't a lot of money. It's a pile of money. But for rounding purposes, if you look at this glass of water as representing about $50 billion plus worth of deficit, once we take out $19 billion, which will end this year, that part of the deficit right away in one year is going to shrink by about 40%. So for the purpose of illustration--and Paul is catching on--the deficit is going to go down about 40% just in one year along that pathway.
We also said we're going to put a lid on departmental spending. Departments spend about $54 billion, all added together, to run their operations. We've said there's going to be a lid on that $54 billion. The 2010-11 lid you have in front of you will continue for the next two years. Just doing that stops the increase we've been seeing in our budgets, which we take full responsibility for. Just by doing that, by the time we get to 2014-15, that's about a 37% reduction, which takes us down to about there.
The final portion of what we are going to be embarking on, and what we've been embarking on over the last three years, is strategic reviews of every department and agency. About a third of those come before the government each year. We say to the department heads that we want them to take responsibility for this, and we want them to find approximately 5% of their overall budget that they would classify as low priority, things that if they didn't get done...and we'd like to get it all done. We don't want people programs hurt, and we're not going to reduce the transfer payments to provinces. We're not going there, but we want them to help us find 5% in each department and agency. That, combined with what we think will be some upward movement on income revenues to the government, which basically means taxes without raising taxes, is the remaining approximately 23% or so. It will not be as easy as drinking a glass of water, but I wanted to show you the three main approaches we're taking to get there.
I know there has been some speculation as to whether we are being overly optimistic on the revenue side. In other words, are we really going to see an increase in economic activity that can help make up that remaining 23% to get rid of the deficit? I believe we will, obviously. We're already hearing from around the world signals about how this government has been handling its economic matters. The manager of the largest bond portfolio fund in the world out of the United States, Pacific Investment Management, a trillion dollar fund—a trillion takes a long time for my brain to compute—said not long ago that he's directing major institutional investors to Canada. A week ago, in a financial report, Russia said they want to strengthen their currency reserves by buying Canadian dollars. So already we're getting signals that internationally we're becoming more and more attractive on the investment side. Of course, when people invest in businesses here in Canada, that means more jobs, more people working, and more taxes without raising taxes.
The chair is giving me a signal. I will happily conclude my overview, and I'll look to you for your questions, direction, and insight.
Thank you.
