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Federal debt repayment as an instrument of fiscal centralization

28 Jun 2004

Under such conditions, it is surprising to hear new calls for speeding up the Having reached its deficit elimination rate of decline of the federal debt-to-GDP ratio target in 1997, the federal government has such as the plan by the federal Minister of Finance enjoyed budget surpluses ever since, and can to reduce that ratio to 25 percent in ten years. [...] This lances and the reluctance of the federal govern- ratio, which in the mid-1990s exceeded the 100 ment to renew its commitment as an equal partner percent mark, has been reduced to less than 70 in the financing of national programs – namely, percent in 2003-04 and will continue to be driven programs of national interest delivered by the lower by the forces of economic gravity resulting province [...] We will show that, in such a fiscal setting, achieve the 25 percent target by 2013-14 (after the 10-year target of a 25 percent debt-to-GDP which the federal debt is assumed constant for ratio becomes an instrument of fiscal centrali- the rest of the period). [...] The requirements of debt repayment requires a debt repayment of $7.5 billion per would prevent the federal government from par- year, which exceeds the projected federal surplus ticipating as an equal partner in the financing over the next three years. [...] In this paper we use the measure of debt decline in the debt-to-GDP ratio, Scarth [2004] derived by the Conference Board [2002], which suggested a target of about 50 percent within is equivalent to the measure of gross debt found ten years.
government politics public finance economics economy taxation finance public debt debt economic policy government policy government budget government debt deficit government budget balance federal budget deficits government finances budgets and budgeting balanced budget amendment debt-to-gdp ratio debts, public debt-to-gdp ratios the federal debt

Authors

Myatt, Anthony

ISBN
1553821106
Pages
6
Published in
Canada

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