Stronger than expected economic growth last year pushed the federal surplus to a record $15 billion, but Finance Minister Paul Martin says none of that windfall will go to repairing Canada's social infrastructure.
In his economic statement delivered in Ottawa last month, Martin announced that the entire surplus will be applied to the public debt and that program spending will be contained.
"Our long term plan is to continue to cut taxes, to continue to cut the debt, and continue to control spending," Martin told the House of Commons Finance Committee.
Critics say the $15 billion debt payment means that since the budget was balanced in 1997, more than 80 per cent of the fiscal dividend has gone to debt reduction. They urge Martin to consider addressing other priorities.
"There are a lot of urgent social needs that need to be met," noted CAUT president Tom Booth. "The Finance Minister was well positioned to put a dent in some of those needs, but he chose not to."
While Martin acknowledged the current slowdown in the U.S. economy would have an impact on Canada, he said Ottawa will still post a surplus of more than $7 billion in this fiscal year.
Booth said that gives Martin ample room to increase program spending without running the risk of slipping back into a deficit situation. "Over the past years, federal program spending as a share of GDP fell from more than 17 per cent to near 11 per cent. This represents billions that would have been available for education, health and social programs as well as the basic infrastructure of the country."