TORONTO, Sept. 27 /CNW/ - Canada's Chartered Accountants applaud the
federal government's announcement today that the national debt has been
reduced by $14.2 billion.
"Debt charges are a significant element of federal finances, which remain
exposed to rising interest rates," Kevin Dancey, President and CEO of the
Canadian Institute of Chartered Accountants (CICA) said today. "Continued debt
reduction remains vital to improving the government's financial condition,
enhancing prosperity and providing the flexibility needed to deliver on
meaningful tax reductions. We're very pleased that the government has taken
further action on the debt," said Dancey.
Canada's federal debt at the end of 2006/2007 is now $467.3 billion, down
$95.6 billion from its peak of $562.9 billion in 1996/1997. Federal debt as a
percentage of GDP is now at 32.3 per cent. "We're encouraged that interest
savings derived from reducing the debt will be passed along in the form of
personal income tax reductions. However, we continue to urge the federal
government to reduce corporate taxes, which are effectively a tax on labour
because they lower employee wages," continued Dancey.
The CICA has long called on the federal government to lower corporate
taxes to match those paid by small business as a means to enhance the
productivity, competitiveness and overall growth of the Canadian business
sector. "Having prosperous and growing businesses generates jobs and tax
revenue, and that benefits all Canadians," Dancey said.
In its submission to the federal government's Standing Committee on
Finance this year, the CICA called on the government to accelerate the pace of
reducing the debt (accumulated deficit) so that a debt-to-GDP ratio of 20 per
cent is reached by 2013/2014 - and for minimum annual debt payments of $5
billion per year. CICA also recommended that the federal government establish
a framework to ensure that program spending does not rise at rates which are
in excess of the rate of inflation, taking population growth into account.
The Canadian Institute of Chartered Accountants (CICA), together with the
provincial, territorial and Bermuda Institutes/Ordre of Chartered Accountants,
represents a membership of approximately 72,000 CAs and 10,000 students in
Canada and Bermuda. The CICA conducts research into current business issues
and supports the setting of accounting, auditing and assurance standards for
business, not-for-profit organizations and government. It issues guidance on
control and governance, publishes professional literature, develops continuing
education programs and represents the CA profession nationally and
internationally. CICA is a founding member of the International Federation of
Accountants (IFAC) and the Global Accounting Alliance (GAA).
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