Madam Speaker, I am certainly very proud to rise on behalf of the government in this debate to highlight our dramatic, in fact historic, balanced budget and our budget of balance.
Up until yesterday one in every three Canadians, everyone under 27, had never seen their federal government deficit free. As this House will see, the era of credit card governance is over. One would have to be almost 50 to remember when Canada was deficit free for three consecutive years. We are changing that too.
Starting now and with the 1998 budget, we announced our commitment to balance the books this year and continue to balance the books for each of the next two years. In other words, Canada will enter a new millennium with the type of positive financial performance we have not seen in a half century. That is a milestone, a new beginning and it is worth celebrating.
It is no surprise that the official opposition and other opposition parties are standing in their place today ranting and raving that we have not gone far enough or fast enough, whether it is cutting debt or cutting taxes. Let me refer to a word that the leader of the official opposition has never heard of, let alone understands its meaning, balance. That is a word they do not like, it appears.
I remember how members opposite consistently attacked our approach in each of our past budgets, an approach that combined real fiscal discipline with reasonable, responsible investments in areas of strategic economic benefit and for Canadians in jeopardy and in need.
It is no wonder that today's budget leaves a very bitter taste in their mouths, because the results of our approach are clear, concrete and convincing.
This government not only balanced the budget but took a balanced approach. Unlike the Reform Party which continues to put forward programs of extremes, this government has chosen to take a balanced plan for the future.
Today we heard the leader of the official opposition say that his party has a national job strategy. That is what he said. But we know what the name of this job strategy is, Reaganomics. It is called voodoo economics of the 1980s. It did not work then and it is not going to work now.
I think what we need to do is look at the facts of our balanced approach. These are the facts. Canada's pace of economic growth and job growth is positioning us as a world leader among the major industrial nations. Our deficit performance is absolutely the best of any G-7 nation. That is the benefit we get from a balanced approach.
It is an approach that the 1998 budget sustains. It combines continued fiscal progress through our debt repayment plan with a program of general tax relief and investments in learning and skills, in helping to manage student debt, in aiding children in need, in boosting research and in funding to provinces for health care and education.
What I want to focus on is our fiscal track record, because it is our success as financial managers that has made possible these tax cuts and strategic investments.
Achieving a balanced budget this year means that the deficit has in fact declined by $42 billion in just five years. This dramatic turnaround is the combined result of two factors. The first is the sharp drop in federal program spending due to our review of all federal programs. Program spending this year is estimated at $106 billion, down from $120 billion in 1993-94. That is real cuts in real dollars. Second, the deficit has been cut thanks to higher budgetary revenues, primarily from a growing economy.
Taken together, these factors highlight a dramatic transformation in Canada's economic and fiscal policy. In 1993-94, high deficits were pushing interest rates up and depressing economic activity.
This meant higher interest charges on the debt, fewer jobs for Canadians and, in turn, lower revenues for government, creating further deficit pressure. It was a vicious circle.
Today Canada enjoys the benefits of a virtuous circle with fiscal progress contributing to lower interest rates which in fact fuel economic growth and job creation, leading again to an ever improving fiscal situation.
As the minister told this House, while we have won a major battle, we understand full well that we have not yet won the war. Interest charges on our debt, the result of decades of deficits, will cost us $41.5 billion this year. That is money that cannot go to health care or further tax reduction or addition debt reduction.
For a strong economy and a secure society, this debt must be brought down. Our commitment is to make that happen, steadily and permanently. That is why we are instituting a two track strategy.
First, we will continue to follow policies that will pay off in better economic growth. Second, we will bring down the absolute level of debt itself through the debt repayment plan.
Under this plan we will continue to present two year fiscal plans based on prudent economic assumptions. Next, we will continue to build a buffer into our budgets. The $3 billion contingency reserve is there to make sure we meet our balanced budget targets despite any unforeseen pressures.
Finally, if the contingency reserve is not needed, just as it has not been needed in each of the last four budgets, thanks again to our prudent economic assumptions, it will go directly to pay down the debt.
Again, as the minister said, this is how since coming into office we have brought the deficit down year after year after year. This is how in the future we will bring the debt down year after year after year.