Canada Says It Will Introduce Balanced Budget LawTheophilos Argitis and Andrew Mayeda
Canadian Prime Minister Stephen Harper pledged to introduce legislation that would keep the nation’s finances at or near balance to maintain the country’s status as one of the world’s most creditworthy nations.
Harper, in a mid-term update of his agenda released today, said he will legislate a rule that requires balanced budgets in “normal economic times, and concrete timelines for returning to balance in the event of an economic crisis.”
Canada is the only Group of Seven country with stable AAA credit ratings from three major rating companies, an advantage that helped the country escape the worst of the global financial crisis last decade. Balancing the budget has been a key plank of the government’s economic agenda.
“We cannot be complacent,” Harper said in the so-called Speech from the Throne that marks the ceremonial opening of a new legislative session in Ottawa. “The global economy still faces significant risks from factors that we do not control.”
Harper also pledged to freeze the federal government’s total operating budget, and make the public service more efficient, including a review of federal assets to determine whether they need to be sold.
Harper reiterated his pledged to balance the budget by 2015 and lower the nation’s debt-to-gross domestic product ratio to 25 percent by 2021, bringing debt levels to the lowest since the 1970s, as part of commitments by Group of 20 nations to establish longer-term fiscal strategies.
Jobs and growth remain his government’s top priorities, Harper said, adding the nation’s prosperity depends on the “responsible development” of its natural resources. He reiterated his pledge to keep them out of foreign-government control.
“Our government will continue to ensure that our natural resource sectors remain open to foreign investment when it is market-oriented,” according to the text of a speech provided to reporters.
Other growth-promoting efforts will include investing C$70 billion ($67.8 billion) on infrastructure projects over the next decade, he said.
Harper also turned his focus to consumer issues such as the cost of telephone and cable TV. Harper said the government’s initiatives will include changes to cable television practices to “require channels to be unbundled,” rather than being making consumers pay for packages, as well as lowering domestic roaming fees for wireless phones.
Other consumer friendly measures will include efforts to expand “no-cost” basic banking services and efforts to close the gap between U.S. and Canadian prices for consumer products.
Canada will also require railways to boost insurance coverage.
The speech reiterated that Canada and the European Union are close to an agreement in principle on a free trade pact.