A sound fiscal base for government is essential

In 2005-06, under the Liberals, the federal budget surplus was $13.2 billion. In 2009-10, the deficit was $56 billion, the largest in Canada's history.

From 2006 to 2008, the Harper government increased spending at three times the rate of inflation, eliminated the contingency reserves included in previous budgets, and went from surplus to deficit before the recession hit.

That last point is important -- the poor fiscal position of the government began before the recession. The huge deficit started when the economy was good.

Brian Mulroney left Canada in a terrible fiscal mess. It took years for Jean Chrétien and Paul Martin to put the federal government back into good economic shape. Unfortunately it seems the same story has repeated itself and Conservative mishandling needs to be fixed again.

A fiscally sound base for government is essential regardless of spending priorities. Whether, as with Stephen Harper, you want to build mega-prisons, or, with the Liberals you want to provide for family caregivers looking after ageing parents, you need a solvent government. The Liberal platform will ensure that fiscal base is available.

A Liberal government will commit to reducing the deficit to one percent of GDP within two years, down from 3.6 percent in 2009-10. We will set subsequent, rolling targets to continue decreasing the deficit every year after that until the country is returned to surplus. All fiscal planning will be consistent with this anchor.

We will restore a two-year budgeting framework to increase transparency and make steady, measurable progress in deficit reduction. That progress will be driven by rolling, near-term targets that are firm and achievable.

In addition, Liberals will restore prudent budget planning, starting with this platform. By its second year, our plan frees up $7 billion through better choices. We will put some of that money aside in a $3 billion Prudence Reserve, to manage any unforeseen events without missing our targets. If the reserve isn't needed, it will go toward the deficit.

These unshakable commitments – rolling deficit reduction targets, a realistic budgeting timeframe, and a tangible commitment to prudence – worked the last time a Liberal government had to clean up a fiscal mess left by Conservatives. It will work again.