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Paul Martin, deficit buster

The Story

Canada has a new deficit slayer. Paul Martin Jr. is the minister of finance in the new Liberal cabinet of Prime Minister Jean Chrétien, and he's a man on a mission. As we see in this clip from his first speech as a minister, Martin calculates the federal deficit to be almost $46 billion - more than $11 billion over what his Tory predecessors estimated. But Martin is unphased. At a Montreal business school, he unveils his plan to eradicate the deficit.

Medium: Television
Program: Prime Time News
Broadcast Date: Nov. 29, 1993
Guest: Paul Martin
Host: Peter Mansbridge, Pamela Wallin
Reporter: Keith Boag
Duration: 3:28

Did You know?

• The position of finance minister is regarded as the most powerful in the country after the prime minister, though the portfolio also has a reputation as being a political death sentence. There were suggestions that Martin would have resigned from the Liberals had he not been promised the job. Martin was sworn in on Nov. 4, 1993.

• At the time of the 1993 Liberal victory, Canada's deficit was one of the highest among G7 countries. Martin blamed the "deficit spiral" on new grants, lower tax collections and a weak economy.

• Martin broke from the traditional secrecy surrounding the planning of the federal budget. He hired independent financial specialists to review finance estimates and organize a series of conferences on the economy (The CBC's Joe Schlesinger pointed out that Brian Mulroney did the same thing in 1985.)

• Martin's tough fiscal management did indeed eventually result in the elimination of the deficit. He overhauled the Canada Pension Plan, recorded five consecutive budget surpluses and paid down more than $36 billion of the national debt. But Martin drew fire for his methods, which included slashing federal departments, decreasing transfer payments to the provinces and raiding employment insurance and federally controlled pension funds. Critics accused him of cutting too deep, overestimating costs and collecting too much tax revenue to achieve the surplus.

•. In 1999 Martin became the first chair of the G-20 (G7 nations plus emerging markets) and in December 2001 was named to the World Economic Forum's "dream cabinet." With Mexican president Ernesto Zedillo, Martin also co-chaired the United Nations Commission on the Private Sector and Development, a group charged with boosting entrepreneurship in developing nations.


Paul Martin: Prime Minister in Waiting more