Minister of Finance
Ottawa, Canada
K1A 0G5
July 24, 1995
Mr. Vincent G. Krako
P.O. Box 60525, Granville Park
Vancouver, British Columbia
V6H 4B9
Dear Mr. Krako:
Thank you for your letter of April 6, 1995 regarding the 1995 budget. I welcome the opportunity to respond.
I have noted your comments and appreciate your kind words of support. The February 1995 budget is the culmination of many of the suggestions Canadians provided, focusing on spending cuts, not tax increases. While we could not act on all of the ideas we received -- and we know we face more difficult decisions ahead -- the views of Canadians are certainly well represented in this budget.
As you know, budget measures will ensure we can meet our interim deficit target: 3 per cent of GDP by 1996-97 -- $24.3 billion. We will secure three-year savings of $29 billion, of which an important $25.3 billion comes from expenditure cuts. Each Minister continues to examine his or her budget to determine where the next cuts will come. We know that, to become more efficient, government programs will be merged, consolidated or commercialized, major reforms and reductions will be carried out. Let me emphasize that, for the second year, my budget proposed no increases in personal income tax rates.
With regard to interest groups, Program Review (a year-long, top-to-bottom review of all departmental programs, covering about $52 billion in spending) conducted under the leadership of my colleague, the Honourable Marcel Massé, indentified the key changes needed to ensure that taxpayers' dollars are wisely and effectively spent. As a result, some programs will be eliminated or substantially reduced; others will be redesigned or consolidated to become more efficient and cost-effective; and program activities will, in some cases, be devolved to other levels of government, commercialized or privatized.
In the area of particular concern to you -- allocations to interest groups -- Program Review resulted in an important decrease in overall funding. Comprehensive guidelines were developed and applied by departments to reduce and rationalize funding, and the final outcome will be refected in departments' Main Estimates this year and in years to come. Individual departments can thus best explain the impacts of reductions on the groups they fund.
In closing, I am complimented that you have requested a picture and am pleased to enclose one. I have also enclosed material related to the 1995 budget. I trust you will find it informative.
Once again, thank you for writing and please accept my best regards.
Sincerely,
[Signed "P. Martin"]
The Honourable Paul Martin, P.C., M.P.
Enclosures