Editing Jean Chrétien (section)

=== Economic policy ===

Chrétien canceled the privatization of Toronto's Pearson airport.<ref>Martin, Lawrence ''Iron Man'', Toronto: Viking, 2003 pp. 76 & 161–162.</ref> The consortium that was due to take ownership of Pearson sued for breach of contract, which led the government to settle out of court in April 1997 for $60&nbsp;million in damages.<ref>Martin, Lawrence ''Iron Man'', Toronto: Viking, 2003 p. 163.</ref>

[[1994 Canadian federal budget|The first budget]] introduced by Martin, in February 1994, was described as a "mild and tame" budget focused only on the target of reducing the deficit to 3 percent of [[Gross national product|Gross National Product]] (GNP) within three years, and brought in modest cuts, mostly to defence spending.<ref>Martin, Lawrence ''Iron Man'', Toronto: Viking, 2003 pp. 85–86.</ref> Until the terrorist attacks of September 11, 2001, the Chrétien government tended to be hostile towards defence spending with the government's white paper "Defence 94" declaring that in a post-Cold War world there would be less and less need for armed forces, which accordingly meant reduced budgets for the military.<ref name="Bland pp. 964–967">Bland, Douglas Review of ''Who Killed the Canadian Military?'' by J. L. Granatstein pp. 964–967 from ''International Journal'', Volume 59, Issue #4, Autumn 2004 pp. 966–967.</ref> Outside of defence spending, there were few cuts in the 1994 budget. In a radio interview with Ron Collister in March 1994, Chrétien stated: "To go to our goal of 3 per cent of GNP, all the cuts have been announced in the budget. There will not be a new round."<ref name="Jeffrey-p265" /> According to the diplomat [[James Bartleman]], Chrétien told him in early 1994 that major cuts to government spending outside of defence were out of the question, and instead he hoped that the economy would grow enough on its own that the deficit would disappear without any cuts.<ref name="Jeffrey, Brooke p. 246">Jeffrey, Brooke ''Divided Loyalties'' Toronto: University of Toronto Press, 2010 p. 246.</ref> Chrétien's plans in early 1994 for economic growth were to increase exports by embracing globalization and free trade with as many nations as possible, arguing that the export offensive would stimulate the economy out of the early 1990s recession.<ref name="Jeffrey, Brooke p. 246"/> The 1994 budget was widely criticized by journalists such as [[Andrew Coyne]] as useless in even achieving its target of reducing the deficit to 3 percent of GNP within three years, let alone eliminating the deficit, and led to a celebrated clash between Coyne and Martin in the boardroom of ''The Globe and Mail'' newspaper.<ref>Jeffrey, Brooke ''Divided Loyalties'' Toronto: University of Toronto Press, 2010, pp. 264–265.</ref> In April 1994, interest rates in Canada started a steady rise that would continue until early 1995.<ref name="Jeffrey-p265" />

[[File:Jean Chrétien, 1996.jpg|thumb|right|250px|Chrétien in 1996]]

Chrétien was not keen on making deep cuts to government spending, but given the crisis caused by the skyrocketing interest rates had decided "reluctantly" there was no alternative.<ref name="Jeffrey-p266">Jeffrey, Brooke ''Divided Loyalties'' Toronto: University of Toronto Press, 2010, p. 266.</ref> Once he had decided upon making deeper cuts than he promised, Chrétien proved to be firm supporter of the new course, and supported Martin's cuts to other departments despite the complaints of the other ministers.<ref>Jeffrey, Brooke ''Divided Loyalties'' Toronto: University of Toronto Press, 2010, p. 267.</ref> Chrétien's advisor Eddie Goldenberg later recalled that Chrétien was unyielding in the face of efforts by other ministers to "spare" their departments, and that Chrétien kept on saying "If I change anything, everything will unravel".<ref name="Jeffrey-p266" /> In a 2011 interview, Chrétien recalled about [[1995 Canadian federal budget|the 1995 budget]] that: "There would have been a day when we would have been the Greece of today. I knew we were in a bind and we had to do something."<ref name="Palmer 2011 all">{{cite news |last1 = Palmer |first1 = Randall |last2 = Egan |first2 = Louise |title = The lesson from Canada on cutting deficits |publisher = The Globe & Mail |date = November 21, 2011 |url = https://www.theglobeandmail.com/report-on-business/economy/the-lesson-from-canada-on-cutting-deficits/article4252006/?page=all |access-date = July 7, 2013 |location = Toronto |url-status = dead |archive-url = https://web.archive.org/web/20131011231848/http://www.theglobeandmail.com/report-on-business/economy/the-lesson-from-canada-on-cutting-deficits/article4252006/?page=all |archive-date = October 11, 2013 |df = mdy-all }}</ref> In order to silence objections from left-wing Liberal backbenchers and Cabinet ministers, Chrétien ensured that the Program Review Committee chaired by [[Marcel Massé]] that would decide what programs to end and which to cut had a majority comprising the leftist MPs [[Brian Tobin]], Sheila Copps, [[Sergio Marchi (politician)|Sergio Marchi]] and Herb Gray, people who would not normally be supporting cutting programs, and thereby underlined the seriousness of the crisis.<ref>Jeffrey, Brooke ''Divided Loyalties'' Toronto: University of Toronto Press, 2010, pp. 267–268.</ref> It was only with the budget that Martin introduced on February 27, 1995, that the Chrétien government began a policy of cuts designed to eliminate the deficit in order to reassure the markets.<ref>Martin, Lawrence ''Iron Man'', Toronto: Viking, 2003 p. 103.</ref> Much of the Liberal caucus was deeply unhappy with the 1995 budget, arguing that this was not what they had been elected for in 1993, only to be informed by the prime minister that there was no alternative.<ref name="Martin, Lawrence p. 108">Martin, Lawrence ''Iron Man'', Toronto: Viking, 2003 p. 108.</ref> Chrétien himself expressed his unhappiness with his budget in a radio interview with [[Peter Gzowski]] in March 1995, saying about the budget: "It is not our pleasure sir, I have to tell you that. I've been around a long time. It's no pleasure at all. I'm not doctrinaire, a right-winger. I'm a Liberal, and I feel like a Liberal, and it is painful. But it is needed".<ref name="Martin, Lawrence p. 108"/>

The government began a program of deep cuts to provincial transfers and other areas of government finance. During his tenure as prime minister, a $42&nbsp;billion deficit was eliminated, five consecutive budget surpluses were recorded (thanks in part to favorable economic times), $36&nbsp;billion in debt was paid down, and taxes were cut by $100&nbsp;billion (cumulatively) over five years.<ref>{{cite web |url=http://www.fin.gc.ca/toce/2000/update01-1e.html |title=January 2001 Tax Savings |access-date=February 13, 2008 |archive-url=https://web.archive.org/web/20080108171644/http://www.fin.gc.ca/toce/2000/update01-1e.html |archive-date=January 8, 2008 |url-status=dead }}</ref><ref name="CanadianEncyclopedia">{{cite encyclopedia | url=http://www.thecanadianencyclopedia.ca/en/article/joseph-jacques-jean-chretien/ | title=Chrétien, Joseph-Jacques-Jean | encyclopedia=[[The Canadian Encyclopedia]] | access-date=June 6, 2015 | author=Bothwell, Robert}}</ref> Using the low incomes cut-offs after tax measure, the percentage of Canadians who had low income in 1993 was 14.1 percent; in 1995, when the budget was introduced, that figure had jumped to 14.5; in 2003, the end of Chrétien's time in office, that number had fallen to just 11.6 percent.<ref name=":1">{{Cite web|url=https://www.canada.ca/en/employment-social-development/programs/poverty-reduction/backgrounder.html|title=A backgrounder on poverty in Canada|last=Canada|first=Employment and Social Development|date=November 30, 2016|website=gcnws|access-date=May 28, 2019}}</ref> The share of Canadians living in persistent poverty (i.e. low income for at least 3 years out of 6 years) has declined by almost half since the mid-1990s to 2010.<ref name=":1" /> Social spending as a percentage of GDP fell from 20.35 percent in 1993, to 18.35 percent in 1995, eventually falling to 16.94 percent in 1997 and 15.76 percent in 2000, and eventually rising to 16.29 percent in 2003.<ref>{{Cite web|url=http://data.oecd.org/socialexp/social-spending.htm|title=Social protection – Social spending – OECD Data|work=OECD|language=en|access-date=May 28, 2019}}</ref> The 1995 budget, which was called by [[Peter C. Newman]] a "watershed document" that marked the first time in recent memory that anybody had made a serious effort to deal with the deficit, won a favorable reaction from the international markets, and a led to an immediate fall in interest rates.<ref>Martin, Lawrence ''Iron Man'', Toronto: Viking, 2003 pp. 103–104.</ref> There were, however, undeniable costs associated with this endeavour. The cuts resulted in fewer government services, most noticeably in the health care sector, as major reductions in federal funding to the provinces meant significant cuts in service delivery. Moreover, the across-the-board cuts affected the operations and achievement of the mandate of most federal departments. Many of the cuts were restored in later years of Chrétien's period in office.<ref>Martin, Lawrence ''Iron Man'', Toronto: Viking, 2003 p. 429.</ref>

In March 1996, when the Chrétien government presented [[1996 Canadian federal budget|its third budget]], the backbencher Liberal MP John Nunziata voted against the budget under the grounds it failed to repeal the GST as the Liberals had promised in 1993 and singled out for criticism his former [[Liberal Party of Canada Rat Pack|Rat Pack]] colleague Sheila Copps, who had promised during the 1993 election to resign within a year if the GST was not repealed.<ref name="Martin, Lawrence p. 156">Martin, Lawrence ''Iron Man'', Toronto: Viking, 2003 p. 156.</ref> Chrétien's response was to expel Nunziata from the Liberal caucus.<ref name="Martin, Lawrence p. 156"/> However, the expulsion of Nunziata drew attention to the fact that Copps was still in office despite her promise to resign within a year if the GST was not repealed.<ref name="Martin, Lawrence p. 156"/> Chrétien first stated that Copps would stay in Parliament despite her promise of 1993, but then intense public pressure (together with a poll showing Copps would win a by-election) forced Copps to resign from the Parliament.<ref name="Martin, Lawrence p. 156"/> After resigning, Copps then contested the resulting by-election, where she won and then went straight back into the Cabinet.<ref name="Martin, Lawrence p. 156"/> To help defuse anger over the GST issue, in the spring of 1996 the Chrétien government moved to [[Harmonized Sales Tax|harmonize sales taxes]] (GST with provincial taxes) by signing an accord with three of the four Atlantic provinces; the other provinces were not interested in the federal offer to harmonize.<ref name="Martin, Lawrence p. 156"/>

In [[1998 Canadian federal budget|February 1998]], for the first time since [[1969 Canadian federal budget|1969]] a balanced budget was presented by the government.<ref>Martin, Lawrence ''Iron Man: The Defiant Reign of Jean Chrétien'' Toronto: Viking Canada, 2003 p. 203.</ref> Shortly afterwards, the Chrétien government introduced the National Child Benefit program for the children of low-income parents.<ref name="Martin-p204">Martin, Lawrence ''Iron Man: The Defiant Reign of Jean Chrétien'' Toronto: Viking Canada, 2003 p. 204.</ref>