This is Mr Chrétien's third consecutive appointment as PM, and in a press conference held on Tuesday he promised: 'I intend to exercise this mandate, it was a very clear mandate, and I'm very honoured and pleased.' Mr Chrétien said he would stick to his promise of employing a proportion of the country's budget surplus to introduce significant tax cuts across the board.

The tax cuts were part of a package of reforms announced in a mini-budget that took place last month. In an Economic Statement and Budget Update press release Finance Minister Paul Martin stated: 'A strong economy and sound fiscal management have produced an era of budgetary surpluses that give Canadians more choices than they have had in decades. The choices we make will mirror our values as a society and our obligations to each other as citizens.'

Since eliminating the deficit in 1997-98, the Minister noted close to three-quarters of all new spending has been devoted to health care, children and education. C$28.7bn in debt will have been retired by 2000-01; C$100bn in tax cuts will have been implemented by 2004-05, and an average personal income tax cut of 27 per cent, and 35 per cent for families with children, will have been delivered.

Banking reforms are likely to include new rules to give foreign banks a time-limited window to move operations from a Canadian subsidiary into a Canadian branch without undue tax consequences. There is also a proposal that that foreign currency deposits be permitted investments for registered retirement savings plans and other deferred-income plans.