Canada unveils first balanced budget since 1970

TORONTO (AP) — The government Tuesday presented Canada’s first balanced budget since 1970, a milestone resulting from billions of dollars in spending cuts since the Liberal Party came to power in 1993.
Finance Minister Paul Martin offered modest tax breaks in the 1998 budget, plus a new scholarship fund for post-secondary students, but he promised the books would remain balanced for at least the next three years.
Martin was the official on the spot when the Liberals, under Prime Minister Jean Chretien, took office in 1993 facing a $42 billion (more than $30 billion U.S.) deficit. Big cuts followed, especially in transfer payments to the 10 provinces for health care and education.
Martin received a standing ovation from his colleagues when he announced that the deficit had been erased and declared, “This is a turning point in our history.”
The biggest new program in the budget is the so-called Millennium Scholarship Fund, allocating $2.5 billion ($1.75 billion U.S.) to aid college and university students who have been complaining about rising tuitions and heavy post-graduation debt loads.
Scholarships averaging $3,000 ($2,100 U.S.) will be awarded to about 100,000 students over a 10-year period.
Martin also offered tax relief for low-income families and increased child care credits, but there were no major tax reductions for middle- and upper-income Canadians.
He proposed an annual contingency fund of $3 billion ($2.1 billion U.S.) that would be used to help pay off the $580 billion ($406 billion U.S.) national debt if the funds were not needed elsewhere.
The budget calls for spending of $104.5 billion ($73.1 billion U.S.) on programs in 1998-99.