archived - Chapter 4: Plan to Return to Budget Balance and Fiscal Outlook

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Highlights

• Budget 2010 outlines a three-point plan for returning to budgetary balance over the medium term and well before any other Group of Seven (G7) country.
  • First, the Government will follow through with the "exit strategy" built into the Economic Action Plan. Temporary measures in the Action Plan will be wound down as planned.
  • Second, the Government will restrain growth in spending through targeted measures. Towards achieving this objective, Budget 2010 proposes $17.6 billion in savings over five years.
  • Third, the Government will undertake a comprehensive review of government administrative functions and overhead costs in order to identify opportunities for additional savings and improve service delivery.
• The Government will not raise taxes. The Government will not cut major transfers to persons and other levels of government.
• As a result of the planned wind-down of the Economic Action Plan and the spending growth restraint measures in this budget, the deficit is projected to be cut by almost half to $27.6 billion in 2011–12, and cut by two-thirds to $17.5 billion in 2012–13.
• The debt-to-GDP (gross domestic product) ratio is expected to peak at 35.4 per cent in 2010–11 and then fall to 35.2 per cent in 2011–12 and 31.9 per cent by 2014–15.
• Program spending as a share of GDP is expected to decline from 15.6 per cent in 2009–10 to 13.2 per cent in 2014–15.

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