This year marks the 30th anniversary of the Chrétien Liberal government's 1995 federal budget one of the most important budgets in Canadian history which contains key lessons for today's federal and provincial policymakers, finds a new study published by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

"To improve the dismal state of federal finances, policymakers in Ottawa should apply the key lessons of the 1995 budget to the upcoming 2025 federal budget," said Jake Fuss, director of fiscal studies at the Fraser Institute and co-author of 30th Anniversary of the 1995 Budget: Lessons to Improve Canada's Federal Finances Today.

After decades of budget deficits and debt accumulation brought Canada to the brink of a fiscal crisis, the 1995 federal budget reduced spending, imposed clear and effective limits on new spending and borrowing, and established a swift path to a balanced budget. In addition, the stronger financial foundation set by the 1995 budget allowed for largescale tax relief over several years aimed at making Canada more competitive and attractive to investors and entrepreneurs. The results were almost two decades of prosperity.

Fast-forward to today due to successive years of large deficits and debt accumulation, federal finances have markedly deteriorated. To reverse course, in its upcoming budget the federal government should emulate the 1995 budget reforms including:

• Produce a plan to balance the budget within three years and impose clear and strict rules for spending and borrowing.
• Conduct a comprehensive review of all federal programs and agencies (with no exceptions) and reduce or eliminate wasteful spending.
• Use spending reductions not tax increases to reduce the deficit.

"Back in 1995, the comprehensive nature of spending reductions and reforms produced a smaller but more effective federal government, which should be the goal for today's policymakers," said Grady Munro, study co-author and policy analyst at the Fraser Institute.

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