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Prehistory | 2 Worlds Meet | New France | England Arrives | Clash of Empires | Revolution | British America | Reform/Revolt | Responsible Government | Confederation | Nation Building | Laurier | The Great War | Roaring 20's | Great Depression | WWII | The Peace | Cold War | Trudeau | PC's in Power | Modern Canada

Chretien | 1995 Referendum  | 1998 Seperation Ruling | Nunavut | Budget Surplus | Reform Party | The Bloc

As Finance Minister, Martin quickly went to work and made the tough decisions that previous Liberal and Conservative Governments had failed to make. In 1994 Canada had one of the highest deficits compared to GNP of any of the G7 countries with no relief in sight. He cut back on transfer payments to the provinces, reduced spending on many social programs, froze increases on most others and reformed the CCP (Canada Pension Plan) in order to increase pension amounts and increase revenues, and increased some taxes. The results were financially spectacular. A yearly $42 Billion deficit was eliminated by the fourth year with ever increasing budget surpluses after that.

He then began to pay down the national debt which reduced Canada's debt to GDP ration each year and eventually led to the best ratio of all G7 countries with a reduction from about 70% to around 50% by the late 1990's. Martin managed to reduce Canada's debt to GDP ration form 70% to about 50% after just 5 years.

The process which Martin instituted caused a certain amount of hardship with many of the social and cultural programs across the country and a the time of his actions the Liberal's were ideally suited to make the hard decisions over financial matters which Martin made. The conservative opposition had fractured into the Progressive Conservatives and the Reform Party in the West and the PC and the Bloc in Quebec. The NDP were unable to present themselves as a viable alternative during this period fro many reasons.

Many Canadians were deeply concerned about the budget deficits and were willing to endure the hardships asked of them in order to get the finances of the country back on track. This was also a period of high growth in the North American marketplace and as a result of  the North American Free trade Agreement, the high tech economic boom and Martin's actions, the measures he took were even more effective then was expected.

The fiscal responsibility and success which  Paul Martin put in place and continued on with as Prime Minister had only recently been reversed with a return to deficit spending but that can be mainly attributed to the world economic crisis of 2008/9. Canada entered that crisis better prepared and in much more stable shape then almost any other country in the world.




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Reference: www.canadahistory.com/sections/eras/eras.html