Contents                                 MARCH 1994

Editor's notes
Charting the structural economic effects of the deficit and the debt
Laurels
Robot dreams
Requiem for a nobody
Is Canadian health care a good model for others to follow?--part I
Three myths about corporations and taxes
Will Mr. Martin's budget be successful?
March graph
To revolt or not to revolt
The health of a nation and its wealth are directly linked
The federal debt in perspective
Letters

Feature Article

Charting the Structural Economic Effects of the Deficit and the Debt

by

Robert Crozier

Editor's notes

POLLS CONSISTENTLY SHOW that one primary concern of Canadians in the mid-1990s is the country's debt and deficit. This concern varies in intensity across the nation, but the topic did form a considerable part of the discussion in the recent federal election and in the consultations Finance Minister Paul Martin had with Canadian economists prior to his late February budget.

Certainly the issue is one that has absorbed the attention of Institute economists and policy analysts for years. These people have consistently predicted, over and over, in an endless variety of ways, that not only do Canada's debt bugbears exist, but the deficit and resulting ever-building debt absolutely must be dealt with, and dealt with now. In a way that is both satisfying (because our calculations are right) but unfortunate (for the same reason), we can see our predictions coming horribly true. Canadians are burdened by such a weight of interest payments and such a corresponding weight of taxation that the economic recovery which has taken hold in the United States seems to be at best manifesting itself only weakly here.

As we are all too aware, each year, despite the Institute's best efforts, and despite the increasing calls from Canadians to tackle the crisis, the government makes the problem worse by spending more than it can afford. (Paul Martin's recent budget may be a case in point, as Michael Walker points out in his article in this issue, "Will Mr. Martin's budget be successful?")

In an attempt to bring home the urgency of Canada's current economic situation, this issue of Fraser Forum examines the debt and deficit again, this time from the perspective of someone who has looked at the cold, hard numbers daily for much of his working life. Robert Crozier, now retired from Statistics Canada, details clearly and succinctly how bad the debt and deficit problem is in this country, and why it is so urgent that we act now to save the nation from economic disaster.

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