Chapter 4: Plan to Return to Budget Balance and Fiscal Outlook
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Highlights
- The Government is on track to return to balanced budgets in 2015.
- Including measures in Economic Action Plan 2014, the deficit is projected to decline to $2.9 billion by 2014–15. A surplus of $6.4 billion is expected in 2015–16, after taking into account a $3.0 billion annual adjustment for risk.
- The federal debt-to-GDP (gross domestic product) ratio is expected to fall to 27.0 per cent in 2017–18, below its pre-recession low, putting the Government well on its way towards achieving its target of 25 per cent of GDP by 2021.
- The planned reduction in federal debt will help to ensure that Canada’s total government net debt burden will remain the lowest, by far, of any Group of Seven (G-7) country and among the lowest of the advanced G-20 countries.
- Economic Action Plan 2014 advances the Government’s commitment to control direct program spending with proposals to ensure that overall public service employee compensation is reasonable and affordable, including:
- Modernizing the Government’s disability and sick leave management system.
- Transitioning to equal cost sharing for retired employees who choose to participate in the Public Service Health Care Plan (PSHCP) and increasing the number of years of service required to be eligible for the PSHCP in retirement from two to six years.
- The Government is also introducing a number of measures to improve the fairness and integrity of the tax system and to ensure everyone pays their fair share.
- Actions in Economic Action Plan 2014 to return to budgetary balance will produce additional savings totalling $9.1 billion over six years.
- These savings build on previous actions taken to return to budgetary balance. In total, since Budget 2010, the Government has announced savings that will reduce the deficit by more than $19 billion in 2015-16 and beyond, for a total of more than $117 billion in savings over the 2010–11 to 2018–19 period. These actions have prevented a significant accumulation of debt and future costs for taxpayers.