Fortunate Miscalculation

The Canadian government has rolled up a record $722 million budget surplus in the first nine months of the current fiscal year, but not all Canadians are happy about it. Some critics point to the surplus as proof that taxes are too high. Others argue that it is evidence of bad financial planning, that government estimates of income and expenses must have been far out of line.

Last week, Finance Minister Douglas Abbott, possibly the only finance chief of any major nation with such a pleasant embarrassment to explain, replied to his critics. Abbott took the view that the surplus was a fortunate miscalculation. Besides holding down inflation, he said, the surplus provided the government with funds to stockpile defense material and to pay off nearly $400 million in maturing bonds and national debt. With cash on hand for these purposes, the government did not have to borrow money during the year. And that left the investment market wide open for Canada's booming oil, mining and manufacturing companies to raise capital for expansion.

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