As the G20 and G8 approach in Ontario, Canada has made it clear that we will urge debt reduction among the foreign governments of the world:
Canada will push for the Group of 20 countries to develop clear plans for cutting their budget deficits when leaders meet later this month in Toronto, Canadian Finance Minister Jim Flaherty said on Monday.
Meanwhile, the new British Prime Minister has made it clear that the UK needs change. The change is in the form of the UK looking to Canada for radical debt reduction programs, like those that Canada adopted in the 90’s:
The Chancellor will announce a "once-in-a-generation" revolution in public spending inspired by Canada in the mid-1990s, when the government turned a budget deficit of nine per cent of GDP into a surplus.
Canada brought public spending under control guided by the principle that people should ask "what needs to be done by government and what we can afford to do".
Today the UK spends more money on financing debt than they do on education. The UK spends 70Bn GBP annually to service debt. I do not relish what the UK is about to go through, and I remember those times in Canada. But it was a worthwhile endeavour, note the trajectory after Paul Martin’s 1995 budget, the year when the government got serious about debt reduction.
A full history of Canada’s debt can be found here, complete with charts. Interesting read.
Hopefully Canada will take their own medicine. After running a positive budget for the last 13+ years while paying down debt, this recent recession and massive stimulus spending has really put a dent in the debt meter.