As I said before, at that time, Canada was facing an unsustainable fiscal situation. Compounding this immediate fiscal problem were the looming challenges posed by our aging population. Spending had to be put on a viable long-term course, and the ratio of public debt to GDP on a steady downward track.
By the middle of the decade, governments - federal and provincial - had begun to take the painful steps to balance their books and reduce their debt burdens. It did not take long for the benefits of those tough decisions to materialize. In most jurisdictions, the vicious circle of rising deficits and debts became a virtuous circle of balanced budgets and falling debt burdens.