The structural fiscal deficit – that is, the deficit corrected for the business cycle – will have shrunk by almost 20 percentage points of GDP by end2013. A few years ago the primary fiscal deficit exceeded 10 per cent of GDP. This year the primary balance is in surplus.
I doubt that many of you here tonight remember those days of high and variable inflation. High inflation exacted a heavy toll on Canadians. Borrowers faced high and volatile interest rates. Incomes and savings were eroded by rising prices. Speculation was rampant. And the economic booms that led to rising inflation ended up in recessions.