The man who shored up Canada's books after decades of structural deficits says Bill Morneau's plan to eschew balanced budgets is a prudent fiscal plan.

"I think Bill Morneau's budget was dead-on. I think it's exactly what had to happen," Paul Martin said of the finance minister's budget that includes a $29.4 billion hole this fiscal year.

"The hit to the economy has been much worse than even people anticipated [during the election]. But that's all the more reason for them to do what they're doing. You've got to stimulate the economy," Canada's 21st prime minister said in an interview with Chris Hall on CBC Radio's The House. "They're doing exactly what they have to do."

Martin faced a $43 billion budget deficit when he was appointed finance minister in 1993. Not to mention two international agencies, Standard and Poors and Moody's, had slashed Canada's credit rating and The Wall Street Journal was calling Canada a "Third World banana republic."

He cut government spending deeply — slashing $25 billion from the federal budget in just three years — but he then went on to post five budget surpluses and ramp up spending when Canada got back on its fiscal footing.

And yet he still approves of this government's plan to run budget deficits right up until the next election, but he says the government has to remain laser focused on a healthy debt-to-GDP ratio.

"Ours is in very, very good shape thanks to some of the stuff we did much earlier," he said of his own fiscal achievements. "You do not want to get your debt ratio out of whack. That's the real global problem right now in Europe and some parts of Asia.

"As long as what [the Trudeau government] has done is put their money into the long-term needs of the country, then borrowing to do it is really not the problem. The problem only occurs if you're borrowing to pay for today's groceries."

Martin pointed to their plans to earmark billions for infrastructure as key to building the "new" economy, in an era of increasing economic disruption.

"We have a massive infrastructure deficit in this country. If we don't act on that, we're going to run deficits into eternity."

Morneau's budget has been criticized for being far too cautious by building in a sizable contingency reserve — but not calling it that outright — possibly overestimating the size of the deficit, low balling growth figures and pegging the price of oil at $25 a barrel.

Critics have argued that this will give them the room to then post better-than-expected numbers down the line earning them much political praise.

Martin says he is nonplussed about the fiscal room Morneau has built into his budget.

Prime Minister Justin Trudeau, left, poses with Minister of Finance Bill Morneau as he arrives to table the budget on Parliament Hill March 22, 2016. (Justin Tang/Canadian Press)

"The kind of economy that we're going into, what's going on, is unpredictable. My view was that if you're going to make a mistake in your predictions, make sure you make them the right way. Don't put yourself into a situation where, in fact, you say you're going to do something and then all of a sudden you can't," he said.

He reserved effusive praise for the government's plans to spend billions on First Nations, including education — an issue of particular importance to Martin, who has spent the better part of his retirement focused on improving educational opportunities for Indigenous children.

"We're 34 million and we're going to waste a whole generation of young Aboriginal Canadians and think we're going to compete with countries of 100 million people? We're not," he said. "A substantial portion of that budget was in fact for Indigenous education. Of course, that's what they should do. That's how you build the future."

Chrétien a no show

Martin's official portrait was unveiled Thursday, and it will hang next to his predecessor — and political foe — Jean Chrétien in Centre Block.

The two men worked closely together for many years before the relationship was strained by a rivalry that led to internal spats over leadership. Martin's portrait will hang to the left of Chrétien, with a stone pillar standing between the two portraits.

Paul Martin gives a thumbs up as his official prime ministerial portrait is unveiled during a ceremony on Parliament Hill in Ottawa (Adrian Wyld/Canadian Press)

Virtually all the political Liberal bigwigs were at the portrait unveiling save for Chrétien, but Martin said he wasn't bothered by the absence.

"It was a great day. The whole thing was called on relatively short notice and people who couldn't get there, couldn't (get) there. But I've got to tell you, nothing is going to take away from that day," he said.