In his speech to the House of Commons on Tuesday, Finance Minister François-Philippe Champagne tried to position his budget as a successor to the seminal 1995 effort of Paul Martin.

“I am reminded of the words of a previous Finance Minister, when in 1995, he presented his budget,” he said. “‘Our very way of life as Canadians is being tested and there are times in the progress of people when fundamental choices must be made, and a new course charted. For Canada, this is one of those times.’ And Mr. Speaker, I would say that today we are also facing a unique moment.”

Last week’s fiscal plan does indeed read like a Paul Martin budget: that of 1994, which played so badly at home and on international markets that it propelled the Liberals to a much more ambitious attempt the next year.

Wearing new boots, former Finance Minister Paul Martin shakes hands with then-Prime Minister Jean Chrétien ahead of delivering the 1994 federal budget.FRED CHARTRAND/The Canadian Press

The Chrétien government’s original plan of reducing the deficit below 3 per cent of gross domestic product by fiscal 1997 through modest cost-cutting didn’t last long.

The Mexican peso crisis in the fall of 1994, a scathing Wall Street Journal editorial and, more substantively, a February, 1995 warning about Canada’s credit rating from Moody’s all set the stage for a far more ambitious second budget from Mr. Martin. Program spending dropped, whole government departments transformed and transfers to the provinces were cut.

By 1997, the deficit had fallen to just 1 per cent of GDP. The next year, Ottawa would record its first budget surplus in 28 years.

Mr. Champagne may be trying to channel the mojo of 1995, but his own budget more resembles the milquetoast effort of 1994. Once again, the Liberals are promising to reduce the deficit-to-GDP ratio. Once again, their cost-reduction plan falls flat.

And once again, ratings agencies are similarly unenthused. On Thursday, Fitch Ratings flagged its concerns about Ottawa’s “persistent fiscal expansion and a rising debt burden,” which could put pressure on Canada’s credit rating in the medium term.

The warning could scarcely be clearer: The Liberals will need to do more to shore up Ottawa’s fiscal position. But there is a bigger concern than the balance-sheet worries of ratings agencies – the generational inequity at the heart of last week’s budget. Rising debt costs and the soaring cost of payments to seniors will increasingly squeeze the federal budget.

Mr. Champagne’s first........

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