Paul Martin’s term as Canada’s finance minister from 1993 until 2002 will be remembered as historically significant primarily for his bold and successful  attack on the federal budgetary deficit. He provided the strategies and leadership that eliminated a $42 billion deficit in just five years, at a time when Canada was described by the Wall Street Journal as ”œbankrupt.”

Against all odds he built the necessary consensus in Canada to aggressively attack the deficit, and he communi- cated his vision and economic goals with clarity and sincer- ity. Some will say that Canadians were ready for such action. Perhaps they were, but it could only have been accom- plished with the tenacity and forthrightness of a leader like Paul Martin, acting decisively, in the best interests of all Canadians.

Eliminating the deficit in record time, however, was only a prelude of things to come. The absence of deficits also paved the way for the onslaught on the federal debt that had been allowed to grow to nearly $600 billion. To date the federal debt has been reduced by some $40 billion. This is just a start, but it has resulted in savings to Canadian taxpayers of $3 billion every year in interest costs, funds that are being redeployed for more tax cuts and for invest- ments in health-care, post-secondary education and other national priorities such as research and innovation.

In 2000, Paul Martin engineered a tax cut of $100 bil- lion, the largest tax cut in Canadian history. Unlike some provinces, he introduced large general tax reductions when deficits were eliminated and surpluses could sustain the lost revenues.

He also helped rein in federal government program expenditures to more sustainable levels. As a percentage of gross domestic product (GDP), they have declined to just over 10 percent, from a high of just under 20 percent reached in the early 1970s and again in the early 1980s. This momentum of reduced federal program spending in relation to GDP is continuing, and is currently at the lowest level in 50 years. Federal program spending under previous admin- istrations had crowded the private sector and exceeded the economic capacity of the domestic economy. This has been reversed.

While we all recognize the independence of the Bank of Canada, during Paul Martin’s mandate monetary and fiscal policy were highly complimentary and reinforcing.

Inflation targets within a range of one to three percent have consistently been met, resulting in a high level of favourable price stability. Interest rates have correspondingly hit record lows, fos- tering healthy levels of business investment and consumer spending.

Paul Martin is often described as a fiscal con- servative and not given enough credit for his social conscience. But, as the nation’s fiscal health began to show new signs of life, the budg- ets he delivered in the House of Commons began to reflect the social program priorities of Canadians. As his parliamentary secretary, I saw Paul Martin arguing forcefully and successfully with departmental officials and other advisors for increased Canada Health and Social Transfers to the provinces and territories; for investments in research, innovation and training; for tax policies favouring the disadvantaged and persons with disabilities; and for investments in the area of environmental protection.

Under Paul Martin’s stewardship, the National Child Benefit grew to over $7 billion annually, benefiting children and families with low or modest income. Budget 2000 announced a commitment and funding to develop a set of indi- cators to measure environmental performance in conjunction with economic performance. Paul Martin has been outspoken about the need to continuously evaluate our country’s environ- mental performance against agreed-to domestic benchmarks.

It should also be recognized that Paul Martin played an influential role on the international stage. As a key participant in the G7 finance min- isters’ fora, he was one of the key drivers behind strategies aimed at relieving poor nations of the stifling burden of unsustainable debt levels. He successfully pushed for action, not just words, at key points.

As chair of the more recently formed G-20 Finance Ministers, he was a major supporter of better early warning systems for international financial crises, accompanied by a sounder inter- national financial architecture. He has also pro- moted the idea that globalization will succeed only if everyone, not just a few, reaps the benefits.

It is not surprising that Paul Martin was reluctant when asked by the prime minister in 1993 to serve as finance minister. Given the task he faced, it was reasonable for him to assume that the job would lead to political ostracism. Yet despite administering the heavy doses of fiscal restraint and cutbacks that affect- ed every Canadian, Mr. Martin’s popularity has grown. One reason clearly is that Canada’s economy in the last few years has consistently out-performed that of most other industrialized countries.

Paul Martin accomplished his objectives by establishing fiscal targets that were realistic and obtainable””and then meeting or beating them”” demonstrating his business acumen and commu- nications expertise. Unlike his predecessors, he understood, and understands, the need to posi- tively reinforce good performance. Martin enhanced the pre-budget consultation process and took it to new levels by consulting regularly with Canada’s leading economists, and by listen- ing to the priorities and aspirations of Canadians from coast to coast.

He is also a team player and acknowledges the support he had from the prime minister and others to achieve the extraordinary results. But in the end he was the one, as finance minister, who was responsible and accountable for the fiscal health of the federal government.

While all the policy successes I have recount- ed will rightly form part of Paul Martin’s legacy as minister of finance, his ability to listen and com- municate, to read the pulse of Canadians and then to lead us to the economic prosperity we now enjoy, in my view, will distinguish Paul Martin from other finance ministers in Canada’s recent history. He is a master consensus-builder, a superlative communicator and, perhaps most importantly, a disciplined and visionary leader of men and women.

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