Dear Minister, I write to you today to express our fundamental concern and profound disappointment that the Government of Canada has continually refused to table a full budget before next February. While the world has understandably changed since September 11, it should be noted that economic conditions before this tragedy also warranted the tabling of a budget.

Before September 11th:

Economic growth had slowed to its lowest level in six years according to Statistics Canada;

Unemployment had reached 7.2% in August, the third straight month where this rate had risen;

The Federal Open Markets Committee (FOMC) of the U.S. Federal Reserve Board had already dropped its "target rate" for federal funds (a.k.a. the U.S. prime rate) on seven separate occasions since the beginning of 2001 for total reduction of 300 basis points in eight months;

The Bank of Canada had already lowered the Bank Rate on six occasions since the beginning of 2001 for a total reduction of 175 basis points in eight months;

The average total CPI inflation for the five-month period from April to August inclusive was 3.2% per month; and

It was estimated that the Government had authorized between $3 billion and $4 billion of new and unbudgeted expenditures for the current fiscal year.
Since September 11th:

The FOMC of the U.S. Federal Reserve Board dropped its "target rate" further by another 50 basis points on September 17th bringing the total reduction to 350 basis points over nine months;

The Bank of Canada followed suit on the same day by dropping the bank rate by a further 50 basis points bringing the total reduction to 225 basis points over nine months and the Bank has also pushed back its economic recovery projection to late 2002 at the earliest;

The Conference Board has predicted that for each 1% decline in real U.S. GDP growth, Canadian export volumes will now decline by an equivalent amount; and

Two major Canadian banks now predict a recession for the remainder of this year and early next year.

As a part of the war on terrorism, indications from your Cabinet colleagues point to:

Increased expenditures in public security (the RCMP, CSIS, etc.);

Increased expenditures at Immigration , Customs and Revenue and National Defence;

More development assistance (ODA) to Afghanistan and other countries in this region; and

An airline bailout package, perhaps as high as $2 billion.

This list totals upwards of $5 billion. Combine this amount with the unbudgeted spending by your government already of at least $3 billion and simple math yields an $8 billion figure which wipes out the projected $7.2 billion surplus for the current fiscal year.

Your plans for an Economic Update on October 29th are insufficient given the current economic climate. Canadians will not stand for a glitzy, dog-and-pony, PowerPoint driven, public relations exercise. Instead, you should gather the data and plan to present a full Budget document in early to mid-November. Fiscal leadership in this regard is imperative.

Anything less will be considered by the CTF as a blatant exhibition of contempt for Parliament and Canadian taxpayers.