BUDGET ADDRESS
Hon. Eric Stefanson (Minister of Finance): Madam Speaker, today I stand before the members of the Legislative Assembly and the people of Manitoba to proudly unveil our government's ninth budget. I do this with confidence, knowing that the path we have chosen for Manitoba is the right one. It reflects the priorities that Manitobans have told us are important to them.
A year ago, the people of Manitoba reaffirmed their confidence in our stewardship of our province's affairs and the principles which have been the centrepiece of our first eight budgets.
They reaffirmed their confidence in us to create jobs, protect vital programs, keep our streets and neighbourhoods safe and create new opportunities for Manitobans.
Manitobans across our province reaffirmed these priorities once again during our budget consultations in Flin Flon, Neepawa, Morden, Gimli, Steinbach and Winnipeg. I want to thank all the people who gave their time to participate in these consultations, as well as those who wrote to me, and those who passed on their advice through my colleagues in government.
Madam Speaker, Manitobans made it crystal clear what their objectives are. They want our government to keep taxes down.
They want us to maintain an economic environment that generates investment and jobs.
They want our government to protect priority social services such as health, education and support for families.
They want us to live within our means, consistently balance our books year in and year out, and start paying down the debt.
Madam Speaker, these objectives can be summed up in one short phrase: building confidence!
Both local and out-of-province businesses have expressed their confidence in Manitoba by investing almost $10 billion here over the past four years, and by creating lasting jobs in the process. Each of these investment dollars is an indication of confidence in our province.
It is the drive and enterprise of many individual Manitobans which has made Manitoba strong. In 1995, Manitoba recorded the greatest improvement in the unemployment rate in a generation. Manitobans must have confidence that the finances and operations of their government are under control. This confidence enables local businesses and investors from all over the world to keep making the investments that will generate lasting jobs, incomes, and security. This confidence is not an overnight success; it is the result of eight years of foundation-laying and hard work by all Manitobans.
As a result of those efforts, Madam Speaker, Manitoba is a wonderful place to live, to work, to invest, to raise a family, and to pursue our dreams.
Madam Speaker, over these past eight years, working with Manitobans, our government has created a path to prosperity that is serving as a model for the rest of Canada. In March, the McGill Graduate Business Conference chose Manitoba as the best example in North America of a government "Doing the Right Thing, Right . . .Consistently." Manitoba is of one of the real success stories in Canada today, and we should all take pride because everyone is responsible.
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Madam Speaker, this budget pays tribute to the contributions Manitobans have made to achieve these advances. It addresses the challenges forced upon us by the federal transfer cuts announced last year and confirmed in the federal budget last month. It keeps faith with the commitments we made to Manitobans last year. This budget delivers on our promises.
Continuing the Freeze on Major Taxes
Madam Speaker, I am pleased to announce that this budget:
contains no personal income tax increases; and
it contains no sales tax increases.
In fact, Madam Speaker this budget contains no tax increases of any kind.
Instead, this budget extends the longest-running tax freeze in Canada to a ninth consecutive year. Balanced budgets and stable taxes are the cornerstone of our government's economic policies. Our commitment to these principles was put into law last year with The Balanced Budget, Debt Repayment and Taxpayer Protection Act.
Today, we are continuing to build on that foundation.
Madam Speaker:
This budget delivers the first back-to-back surpluses since 1971.
This budget promotes investment and jobs in manufacturing, mining and housing through targeted incentives.
This budget protects priority social programs and confirms that our commitment to health care is second to none.
This budget introduces a $12 million Manitoba Learning Tax Credit for students.
This budget maintains our commitment to capital investment.
This budget reaffirms Manitoba's status as the most efficient government in Canada with the lowest overall cost of government in Canada.
And this budget does not add to public debt.
In short, Madam Speaker, this budget continues our commitment to protect priority social programs while living within our means, and promotes confidence for continued investment and job creation.
Federal Funding Reductions
Madam Speaker, in last year's budget, we alerted Manitobans to the prospect of sharply dropping federal support for health, post-secondary education and social services in 1996-97 and 1997-98. However, we hoped, along with other provincial governments and individual Canadians, that the federal government would reconsider its priorities and not proceed with massive funding reductions for vital social programs. Unfortunately, Ottawa has reconfirmed that it is proceeding with, and extending, those cuts.
This year federal cash transfers for social programs are cut $116 million. A further reduction of $104 million in 1997-98 brings the annual decline to $220 million. Madam Speaker, that is more than the operating budgets of all five community hospitals in Winnipeg. Reductions will continue for at least two more years. Over the next five years, Manitoba will have received in total about $1.1 billion less in federal cash support for health, higher education and social services.
The federal reductions are too large to be accommodated without affecting our budgets for health, education and social services. Manitobans have already seen the inevitable result of the $116 million federal social transfer cut in some of the program announcements made earlier this year:
changes to the Pharmacare program;
rate reductions to social assistance recipients;
reductions in education funding; and
the moratorium on the health capital program.
Madam Speaker, we do not question the need for the federal government to address its spending and deficit problems. However, we do take issue with the priorities they have set--their plan is to reduce spending by cutting disproportionately the very programs which set Canada apart as one of the best countries in the world.
I ask Manitobans to consider the matter of accountability. Budgets are about setting priorities. Federal transfer payments for social programs will be cut by fully 32 percent over a two-year period. All other federal program expenditures will be cut by only 2 percent. The federal government has chosen to attack its deficit problem by slashing support to health, higher education and social assistance programs. The federal social transfer reductions represent 77 percent of all federal cuts over the next two years. Madam Speaker, the federal government's priorities are wrong. They must be held accountable for reductions made to our programs this year.
Manitoba's Strong Economy
Madam Speaker, when our government first came to office in 1988, we recognized that the perilous state of government finances and continual tax increases were threatening the province's economic vitality. Taking a planned and steady approach, we worked hard to restore stability to public finances and keep major tax rates frozen--not just because these are important objectives in their own right--but also because they are keys to building confidence in the economy and creating more permanent jobs.
In 1993, our Framework for Economic Growth laid out a 10-point economic strategy built on a long-term commitment to fiscal management as the foundation of sustainable economic growth. As Premier Filmon wrote in the foreword, "Economic growth is not the sole objective, but rather the means to several more important goals. Manitoba's ability to provide jobs, vital social services and a high quality of life can only be sustained through the creation of new wealth and industry."
Madam Speaker, this budget continues to make jobs for all Manitobans a key priority.
The economic benefits of our strategy are evident. Our economy is strong, and it is getting stronger. Indeed, the latest provincial outlook from the Conference Board of Canada states Manitoba's economy is "streamrolling ahead."
I would like to highlight some of the impressive accomplishments of the past year.
We have:
10,000 new jobs;
the largest drop in the unemployment rate in a generation;
the lowest youth unemployment rate in Canada;
population growth at a nine-year high;
retail sales growth at double the national rate;
another strong increase in foreign exports, with exports to the United States doubling in the last four years;
the largest percentage increase in total investment in Canada;
a 58 percent surge in manufacturing investment to an all-time high;
the largest increase in manufacturing shipments in over 20 years;
a third consecutive double-digit increase in cash receipts from farm crops; and
a 15-year low in business bankruptcies.
Overall construction activity increased 5 percent. The First-Time New Homebuyer Program has helped nearly 600 Manitoba families buy their first home and create over 1,000 construction jobs. There are signs that the housing sector will improve in 1996, thanks to lower interest rates, rising employment and pent-up demand. Accordingly, as a measure of further assistance, Madam Speaker, I am pleased to announce that the First-Time New Homebuyer Program will be extended to March 31, 1997.
Madam Speaker, private sector jobs in Manitoba rose by a strong 2.7 percent last year. For jobs and incomes to continue growing, a high level of investment by the private sector is crucial. Manitoba was the only province in Canada to record consecutive increases in private investment in each of the past four years. The rate of increase was almost seven times greater than Canada's, and reflects the high level of confidence in Manitoba.
Recent announcements of $1 billion in investment underscore the confidence that the private sector has in Manitoba's future. I would like to highlight some of these important projects:
Repap will invest over $250 million in the next five years to build a new pulp mill and upgrade existing operations at The Pas. This will create 75 to 100 direct jobs in the mill and 175 to 200 jobs in logging operations.
Canadian Agra announced a $55 million canola crushing plant in Ste. Agathe which will employ approximately 45 people. The plant is part of a planned food processing complex which could involve some $200 million in investment over five to seven years.
J.R. Simplot is undertaking a $200 million expansion of its fertilizer plant in Brandon, and has just announced an agreement with Continental Nitrogen and Resources of Minnesota to build another $33 million plant in Brandon.
Schneider intends to construct a $40 million hog processing plant in Manitoba. At full capacity it will employ about 500 people. And,
Standard Knitting and its subsidiary, Tundra Manitoba, is creating 121 jobs as a result of a $2.3 million expansion of their Winnipeg garment manufacturing capacity.
Our favourable taxation climate has been identified as a major factor in building confidence in our province and our economy.
Madam Speaker, as an added boost to jobs and investment, I am pleased to announce that the Temporary Manitoba Manufacturing Investment Tax Credit will be extended for another full year--to June 30, 1997.
The Canadian Federation of Independent Business recently observed that "Manitoba has become one of the most small-business friendly governments in Canada. With an eight-year tax freeze, stable workers' compensation premiums, and some strategic reductions in key taxes, Manitoba has set a standard that many other provinces should follow."
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Madam Speaker, Manitoba will continue to set the standard.
Investing in People
Madam Speaker, it is because Manitoba's economy is performing so well that we are able to sustain our government's record of investing in Manitobans, despite federal cuts. We recognized that sound fiscal management is the foundation of economic growth, and that economic growth in turn is essential to create the wealth necessary to maintain our vital social services and quality of life.
Fully 90 percent of the increase in spending since we first assumed office is allocated to health, education and family services programs. In this year's budget, we have earmarked nearly $1 billion more for these services than the 1987 level.
This budget dedicates almost $3.5 billion to health, education and priority social services. We are confident that with the continued commitment of all stakeholders, this will maintain quality services for Manitobans when they need them.
Protecting Health Care Now and in the Future
Despite the federal cuts in social transfers, our government's commitment to health care is second to none. Madam Speaker, 34 cents of every dollar we spend is devoted to health care.
We are working in consultation and partnership with all stakeholders, including medical practitioners, nurses, administrators and the consumers of health care to find new ways of delivering quality care to Manitobans. The traditional ways of delivering services have not kept pace with rapid advances in technology. We must work together as a community to develop innovative alternatives which will result in high-quality care and give us value for each taxpayer dollar.
The Urban Hospital Partnership is finalizing plans to integrate Winnipeg hospital clinical and administrative functions. Madam Speaker, $38 million has been allocated to support this initiative. The overall budget for hospitals, including this Hospitals Transition Support, is down slightly, but more support is targeted to personal care homes and home care.
This budget increases support for the Personal Care Home Program by $2.5 million, for total support of $267.5 million. Residential rates for personal care homes will be adjusted effective August 1, 1996. While there will be an increase in rates at the upper end, this change will benefit the majority of personal care home residents who currently pay the lower rates.
Madam Speaker, Home Care is the underpinning of a community-based health care system. To deal with increasing demand, the Home Care budget is increased by almost $8 million, to $91 million. Manitoba Health has also begun to expand the number of contracts for nursing and home support services in an effort to promote greater flexibility. We estimate, over the medium term, this measure will reduce home care cost escalation by some $10 million, and allow these dollars to be used to sustain this valuable service. There will be no change in the services provided to Manitobans, and these services will continue to be provided at no cost.
Since taking office in 1988, the Home Care budget has more than doubled, while funding for personal care homes increased by close to $100 million.
In light of the federal transfer reductions, the anticipated restructuring of urban hospitals, and the introduction of Regional Health Authorities in rural and northern Manitoba, my colleague the Minister of Health has announced a pause in the Health Capital Program. We are taking steps to ensure that future hospital and personal care home development plans will meet community needs within the available resources.
Madam Speaker, the Pharmacare program is being reformed. We have been careful to ensure Manitobans with the most need will receive the most coverage. Pharmacare coverage above the deductible will increase to 100 percent--up from the current 60 percent to 70 percent levels. We believe tying the deductible to income, as Saskatchewan has done since 1993, introduces an important element of ability to pay. I am proud to say our Pharmacare program remains among the most comprehensive and generous in the country.
Effective April 2, 1996, routine eye examinations for people aged 19 to 64 will no longer be covered as an insured service. This brings Manitoba's coverage in line with other provinces.
Madam Speaker, across North America and in all advanced nations, practices and procedures are now being subjected to rigorous scrutiny to promote a healthier population. Manitoba must be a leader in these developments and put them to use in delivering the best and most effective health care to all Manitobans.
Protecting Those in Need
Madam Speaker, this budget allocates $655 million to support families in need while encouraging their independence. We continue to believe that providing people with a hand up when they need it, and not just a handout, is the best approach to securing the future of Manitoba's families.
Last year, Manitoba's economy produced 10,000 new jobs. Our unemployment rate was second-lowest in the country. We firmly believe there is no better time than now to provide the incentives and supports needed to encourage people to enter the workforce.
Madam Speaker, we believe that all Manitobans want to work. They want the dignity, experience, and skills that go with work and independence. The best form of social security is a job. We are helping people become more independent through employment. We are investing in their future--a future which breaks the cycle of dependency and allows Manitobans to reach their full potential.
The welfare reforms announced last month by my colleagues, the Minister of Family Services and the Minister of Education and Training, emphasize this point. The reforms will secure savings for taxpayers while providing basic assistance rates in the mid- to upper-range nationally. Since taxpayers are already paying the full housing costs and sales taxes on necessary purchases for welfare recipients, they will no longer qualify for property or cost-of-living tax credits.
Madam Speaker, we have kept our commitment to protect the most vulnerable in our society, single parents with children under six, the elderly, the disabled and women in crisis shelters.
Other recipients are being encouraged to seek jobs and contribute to their communities. In the first year, the number of people receiving assistance is expected to decline by up to 700. If someone receiving social assistance turns down a reasonable job offer, benefits will be reduced or eliminated.
Our government is continuing with its plans to merge the provincial and municipal welfare systems in Winnipeg. The new system will streamline administration, reduce welfare abuse and emphasize employment.
Madam Speaker, our government knows the community wants to be involved in helping people gain independence. We will continue to strengthen community involvement through partnerships with groups such as the Mennonite Central Committee, and with local governments, including the City of Winnipeg. We are convinced these sorts of partnerships are the best way to work with the community to develop opportunities so all Manitobans can achieve their full potential.
Madam Speaker, daycare is extremely important to parents who need to be assured of a safe and nurturing environment for their children. Since 1987-88, our government has added over 3,000 subsidized spaces in Manitoba. In 1996-97, we will continue to ensure child care will be available to the same number of children who received subsidized care last year, including support for single parents on social assistance who are going to work. The daycare budget is lower this year reflecting the actual usage of this program in the last two years. However, our commitment to the daycare program remains firm.
This budget provides additional funding to support those Manitobans most in need, including nearly $2 million more for adults with disabilities, and a further $4 million for children in care.
Madam Speaker, family services and protection of the most vulnerable in our society remain top priorities for our government.
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Preparing for the Future
Madam Speaker, $1 billion has been allocated for education and skills development. We must ensure young people in Manitoba have the very best education and training opportunities so they are properly prepared to succeed in whatever their chosen field may be. The education system must be measured by how well it prepares our children for the challenges facing them--how well they are prepared to seek and obtain meaningful employment. It must also be able to adapt to the job opportunities currently available to our students now and in the future.
We have already brought in many reforms:
to provide more meaningful parental involvement;
to ensure students can read, write, compute and problem-solve at a high level;
to require standards and testing; and
to provide a safe, secure learning environment.
However, there is still more work to be done.
I am pleased that an additional $1.7 million has been allocated for education renewal in 1996-97, bringing the total to $5.4 million.
Madam Speaker, we believe the quality of education is best measured by how much our children learn, not by how much we spend. Public school operating funding will be reduced by an average of 2 percent this year, with a more flexible funding formula. Our government is confident that the quality of education can be maintained with this level of support. Manitoba public schools have the third-lowest pupil-educator ratio in Canada, and the second-highest operating costs per pupil. Provincial funding in support of capital expenditures for public schools totals $27.6 million, an increase of $2.1 million from last year.
Madam Speaker, federal grants in support of official languages training have been reduced. As a direct result of these federal cuts, supplemental grants to Français and French Immersion programs have been reduced from $250 per student last year to $205 in 1996-97. In addition, support to St. Boniface College for community college programming has been drastically reduced. We have asked the federal government to reconsider these reductions.
Over the next two years, we will honour our agreement with independent schools. We will provide support equal to 50 percent of the average actual per pupil operating costs in public schools. For 1996-97, the support level is 46 percent. The independent schools remain responsible for their own capital expenditures and do not share in local property taxes.
Madam Speaker, in sharp contrast to the massive cut in federal support for health, higher education and social services, operating grants to universities are being reduced by only 2 percent this year, while capital support is maintained at last year's level. Provincial support to community colleges, both operating and capital, is also maintained at last year's level.
We are not imposing a cap on post-secondary tuition fees this year. We do not believe fee restructuring, as outlined in the University Education Review Commission report, should be ruled out. However, our clear preference is for universities and colleges to reform their operations to deliver top-quality education on a more cost-effective basis.
Madam Speaker, to encourage students to invest in their own education and training, it gives me great pleasure to announce that a new $12 million Manitoba Learning Tax Credit will be implemented for the 1996 taxation year. Manitoba will become the first province in Canada to provide a refundable learning tax credit.
The Post-Secondary Strategic Initiatives Fund will be enriched by $2.5 million for a total of $3.5 million, to further encourage all advanced education institutions to focus more on marketable skills and innovation. Madam Speaker, $2.5 million is targeted to community colleges, and $1 million is dedicated to universities through this fund.
Madam Speaker, 160,000 people received training and skills upgrading through Workforce 2000, which helped Manitobans weather the second-worst recession in our history. The value of continuous employee upgrading is recognized by virtually all Manitoba businesses.
As the next phase, Workforce 2000 will be refocused. The Apprenticeship Program is being restructured and consolidated with Workforce 2000 to bring together these two workplace-based training initiatives. The Workforce 2000 element of the program will provide support, on a sectoral basis, for strategic industry-wide training partnerships. The training subsidies provided by Workforce 2000 and the related payroll tax credit for larger businesses have been eliminated effective April 2, 1996.
Over 100 training partnerships with local sectoral associations have already levered a $20 million investment from industry and other levels of government. The aim is to identify and address training priorities in key sectors: aerospace, health care products, fashion, tourism, agri-foods and transportation.
Madam Speaker, the federal government has announced its intention to withdraw from the direct purchase of training. Manitoba has called on the federal government to provide transition funding for current apprentices who would be affected by federal reductions in training commitments.
Madam Speaker, our government recognizes the desire of young Manitobans to work and contribute to Manitoba's growing economy. Accordingly, we have increased youth employment initiatives to $8.4 million, up 9 percent over 1995-96 budgeted levels. These programs provide training and employment services for students and unemployed youth in our province. In 1995, Manitoba had the lowest youth unemployment rate in Canada.
Making Our Streets and Communities Safe
Madam Speaker, all Manitobans want to be safe and secure in their communities. Ensuring that our streets and neighbourhoods are protected is key to achieving this goal. That is why our government continues to support initiatives that promote and maintain public safety. Provincial support to Winnipeg's Downtown Watch civilian safety teams will help deter crime and create a more secure environment in the city's downtown. This budget maintains our election commitment to provide the City of Winnipeg with $2 million in added funding to put more police officers on the street.
The Minister of Justice is taking steps to protect victims of stalkers. Last year, legislation was passed to permit victims' names to be removed from voting lists to ensure their privacy. We are currently reviewing other lists and will take steps wherever possible to guard against stalkers who seek personal information about their victims. Most recently, the Land Titles system has been modified to do just that.
However, these measures alone are not enough. We must also address the human costs of criminal activity. Our government will be undertaking a Victims Assistance Study to determine how we can best meet the needs and uphold the rights of crime victims. Preventive measures must also be encouraged so that all of our youth have an opportunity to become productive members of society. For example, Manitoba Justice will be implementing the Urban Sports Camp Program, which will provide a positive alternative to crime and violence for high-risk youth.
Members will recall the Premier and the Mayor of Brandon recently announced a partnership arrangement for the phase-in of the new 911 emergency response communications services to most communities south of the 53rd parallel. This initiative will provide comparable access for communities to emergency response dispatch services as are presently available in Brandon and Winnipeg.
Our government has also assured the RCMP that provincial funding will be available for an improved $3.6 million telecommunications system to further deter crime in rural Manitoba.
Grants to Agencies
Madam Speaker, many organizations and agencies receive part of their funding from the Manitoba government. In 1996-97 many of these grants will be reduced between 1 percent and 2 percent from last year's level.
Jobs and Economic Development
Madam Speaker, I have discussed Manitoba's impressive economic performance, and I am confident that we have established a firm foundation for continuing improvements. But our government is not about to become complacent. We do not believe that this province has achieved all that it can be.
In particular, we must do better for our young people. We are pleased with the very large improvement in the youth unemployment rate last year. It is encouraging to see an increasing proportion of young people able to find work here at home. However, the youth unemployment rate is still too high. Accordingly, our government will continue to work with Manitobans to develop the maximum potential of our economy so that more young Manitobans can pursue their careers right here at home.
Sustaining Growth in the Rural Economy
Madam Speaker, we are proud of the way Manitoba's farmers and the agri-food industry are meeting the challenge of reduced subsidies. They recognize that vast new opportunities exist.
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They recognize that vast new opportunities exist. They are diversifying production and adding value to quality Manitoba agricultural products for export to world markets. The large investments in new and expanded processing facilities for meat, oilseeds and vegetables reflect the newfound confidence throughout our province. More exports mean more jobs for Manitobans. We will continue to work in partnership with our farm community to reap the full benefits of new products and marketing opportunities.
To support diversification, it is essential to provide farmers with easier access to capital so they can make successful transitions. The Manitoba Agricultural Credit Corporation is providing financing programs to encourage diversification into livestock and value-added products and processes.
Madam Speaker, to ensure an adequate water supply for expanded agricultural development, we are pleased to announce the establishment of an Irrigation Initiative. My colleague the Minister of Agriculture will provide further details shortly.
I am especially pleased that a new Enhanced Crop Insurance Program has been developed with the federal government to allow producers access to affordable, quality crop insurance coverage. The enhanced Program is the first in Canada and will operate for a three-year trial period.
Madam Speaker, rural communities are a vibrant and growing element of our society. Despite the major pressures on provincial finances, Manitoba continues to provide significant financial support for rural development to ensure that growth continues. This year, we are increasing our funding for rural economic development programs to over $19 million, up 10 percent from 1995-96.
The Department of Rural Development has successfully launched the $12.5 million Community Works Loan Program. Communities will now be able to take a direct role in sustaining their economic future and creating jobs by providing capital to small business ventures.
Rural Development's Grow Bond Program now totals 19 projects. Over $7 million in investment has been raised, leveraging additional investment of more than $21 million. The Program has created an estimated 450 jobs.
The Rural Economic Development Initiative (REDI) has helped to create over 1,300 jobs in rural Manitoba. REDI has provided over $21 million to the rural economy, generating more than $170 million of investment.
Rural Development's Youth Programs, the Green Team and Partners with Youth, have now created over 3,000 jobs for rural youth since their inception in 1992.
Reflecting the province's strong economic performance, rural municipalities will receive an increase of over 6 percent in provincial-municipal tax sharing payments, bringing the total to over $23 million.
Promoting Trade and Tourism
Madam Speaker, Industry, Trade and Tourism is strengthening its efforts to promote economic development in Manitoba. Financial programs are also being restructured to reduce grants and increase third-party financing.
The Small Business Expansion Fund addresses the need of small, expanding businesses to access capital. This Fund will be administered entirely by lending institutions and is expected to assist approximately 440 small businesses.
Another program, the Manitoba Capital Fund, will access private capital pools and pension funds to address venture capital needs in the $250,000 to $1.5 million range. To date, $20 million has been committed, including $5 million from our government.
Madam Speaker, supported by Manitoba and federal tax credits, the Crocus Fund has proven a successful vehicle for raising venture capital. The Crocus Fund provides capital for dynamic smaller and medium-sized Manitoba businesses to expand, create jobs and involve Manitoba workers more directly in the success of the firms they work for. Last month, the federal budget announced changes to the tax credit rate and other rules governing the Labour Sponsored Venture Capital Corporation Program. Our government will be introducing legislation to parallel these changes this Session.
As we promised in last year's election campaign, the province will place additional emphasis on international trade and investment promotion. Manitoba Trade, our new trading corporation, will provide a single highly visible export identity for Manitoba and will raise Manitoba's profile in the global economy. Our new trade and investment strategy will build on the strength of our successful exporters. Our reputation for quality will provide opportunities for small to medium-sized firms to access world markets.
One promising approach is to foster alliances to gain better access to export markets. For example, the "Export House" project brought government together with several Manitoba companies to showcase local and western Canadian building products.
While government has a role to play in promoting development, it is important to note that Manitoba's positive climate for investment has encouraged many companies to invest here without direct government support. Recent examples include Simplot in Brandon, Repap in The Pas, Louisiana Pacific in Swan River, and PR Response West in Winnipeg.
Madam Speaker, hosting major national and international sporting events provides Manitobans with a variety of important benefits. Visitors attending such events inject millions of dollars into the economy. New facilities are often constructed which improve our quality of life for years to come.
In recent years, through the dedicated efforts of thousands of volunteers, Manitoba has successfully hosted the Grey Cup and the men's and women's World Curling Championships. Brandon will host the Canada Games in 1997. In 1999, Winnipeg and Manitoba will host the Pan-Am Games. Our government will continue to provide financial and other support for these events. By raising Manitoba's profile, tourism, trade and investment are enhanced. In 1995, tourism alone provided more than $1 billion to the provincial economy, driven principally by increased travel at home and increased visits by U.S. residents.
Support for the City of Winnipeg
Madam Speaker, financial assistance to the City of Winnipeg through the Department of Urban Affairs will increase to $51 million, 1.3 percent higher than last year's level. This increase incorporates a 2 percent reduction in the Unconditional Current Programs Grant and the Urban Transit Operating Grant offset by a $1.4 million increase in the unconditional VLT grant. Capital grant assistance will be $16 million, unchanged from last year. The City of Winnipeg will also receive an increase of over 6 percent in provincial-municipal tax sharing payments, bringing that total to $32.5 million.
In addition, $500,000 is budgeted for rehabilitation of the Red River Floodway Control structure. A further $16 million has been provided for various economic development initiatives within the city. This represents an increase of $3.5 million over the 1995-96 budgeted level.
In addition, $2.2 million has been provided to fund the province's share of 1996-97 costs under the Winnipeg Development Agreement. Under the Agreement, Canada, Manitoba and Winnipeg will each contribute $25 million toward the economic, physical and social renewal of our capital city. Under the transportation component, Manitoba will provide up to $5 million, primarily for the development of the Winnport multimodal transportation initiative. Winnport, a private sector consortium, was established to market Winnipeg as an international cargo distribution centre. This project will help secure Manitoba's place as a transportation hub, and provide new opportunities for investment and job creation.
Developing our Resources
Madam Speaker, 1995 was a banner year for new mine openings. Snow Lake, Lynn Lake, Bissett, Flin Flon, Thompson and Lac du Bonnet all are beneficiaries of mine openings or expansions. Planned capital expenditures on these development projects of $170 million in 1996 will bring hundreds of needed jobs to those communities.
Over the past year, 25 new companies have investigated the mineral potential of Manitoba. A new mining investment strategy has been launched aimed at increasing exploration in our province and ultimately the opening of new mines.
Madam Speaker, mining is Manitoba's second most important resource industry. We are making Manitoba the best place in Canada, if not in the world, to invest in mining.
The Manitoba Mineral Exploration Assistance Program (MEAP) builds on and replaces the Mineral Exploration Incentive Program. The new program will actively foster increased mineral exploration in our province. Funding for MEAP in 1996-97 has been increased to $3 million. A new $1-million Petroleum Exploration Assistance Program (PEAP) has been created to encourage higher-risk exploration for oil and natural gas in Manitoba.
This budget also removes a number of irritants that have proven to be obstacles to further exploration in Manitoba.
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Capital Spending
Madam Speaker, during the election last year, we promised to spend at least $1.5 billion on capital over the next five years. The $313-million commitment included in this budget reflects our determination to keep that promise.
We recognize how important it is to keep investing in Manitoba's infrastructure for jobs, for economic development, and for our quality of life.
Madam Speaker, our government is fully maintaining our commitment to the transportation network in Manitoba, as it provides more opportunities for investment, exports and job creation. A total of $100 million is allocated for highway construction this year.
Madam Speaker, provincial allocations under the Canada-Manitoba Infrastructure Works Program are almost completely committed after three years, even though the program was extended to five years. We were disappointed this program has not been renewed by the federal government. We have called for a renewal of this successful approach to partnership and co-operation between the federal government, provinces, municipalities and other organizations.
Spending Smarter
Madam Speaker, Manitobans have emphasized the importance to economic development of lean and efficient operations in government. We started almost a decade ago to eliminate duplication, to spend smarter and to increase efficiencies. We now have the lowest-cost government in Canada. Our government will continue to offer the most innovative and the best possible service at the lowest possible cost.
Over the past four years, we have reported on the impressive results being achieved by special operating agencies. Special operating agencies are helping the government continuously improve the quality of public services and test and implement innovative management practices. The Fleet Vehicles Agency alone is meeting government transportation needs with 25 percent fewer vehicles than in 1987, at an estimated annual saving of $3 million.
Building on this success, seven new agencies are established in this budget. The new agencies are:
The Companies Office
The Manitoba Textbook Bureau
The Mail Management Agency
The Industrial Technology Centre
The Public Trustee
The Office of the Fire Commissioner and
The National Agri-Food Technology Centre
The fifteen Special Operating Agencies in place represent 3 percent of the civil service and $65 million in business for government. Increasingly, other governments view our initiative as a model for their operations. The Institute of Public Administration of Canada recently acknowledged the important role played by Manitoba in pioneering special operating agencies as an innovative way to deliver and finance programs.
As well, our Service First and Better Methods initiatives are seeking ways in which government can work better, cost less and become even more user-friendly. Drawing on the considerable talent and dedication of our public service, these initiatives seek ways to reduce internal administrative costs, to create a sense of entrepreneurship within the public service, and to promote innovation in the way we interact with people and businesses.
Reducing overlap and duplication as well as increasing the efficiency and effectiveness of programs are also key objectives. In 1996-97, we have continued these efforts with reorganizations and management delayering in several departments. We will continue to examine opportunities to provide lower-cost government for Manitobans. These include partnership arrangements with the private sector such as the recent announcement concerning the Environmental Sciences Centre.
Collective Bargaining
Madam Speaker, 1996-97 will be a significant year for public sector negotiations, with a variety of major agreements expiring during the year. Annual salary expenditures for the broad public sector in Manitoba are $3.7 billion, not including the cost of benefits. Managing wage costs is an essential element of our efforts to protect important public services and jobs, to balance the budget, and to keep the lid on taxes. We are committed to dealing with these matters in a fair, reasonable and consistent manner. We are determined to find the appropriate balance between the legitimate interests of public sector employees, and the fiscal capacity of our province and taxpayers.
We have already indicated that agreements based on a status quo framework would be acceptable with respect to negotiations with the Manitoba Government Employees' Union and other public sector groups. In the civil service, this would include continuation of current wage rates and the Reduced Work-Week Program. This budget is based on this framework. However, we are prepared to consider other alternatives within the same overall cost parameters.
In January, we released a discussion document on public school teacher collective bargaining. The level of teachers' salaries relative to those in other provinces and salary settlements for teachers, compared to those for most other public servants in Manitoba, suggest that some modification of the current method of determining teachers' salaries may be warranted. While the collective bargaining system must be able to address legitimate teacher concerns, it must also allow school divisions to control, and be accountable for, the costs of their operations. Teachers' salaries represent the majority of those costs.
Manitobans, public employees included, recognize we must live within our means. We have reduced the size of government today to pre-1980 levels. In doing so we have endeavoured to minimize the impact on our employees. The Reduced Work-Week Program has allowed us to maintain 500 jobs which would otherwise have had to be deleted. In addition the workforce adjustment process has allowed us to limit permanent layoffs to fewer than 200 employees since 1991.
We anticipate that we will have similar success this year. So far, fewer than 75 employees are likely to be impacted by the 350 positions that are being eliminated. In the coming months, we would expect many of the remaining affected employees to be offered alternative employment opportunities. We value the support we have received from our employees, and we are committed to continuing our efforts to minimize the impact on them of the necessary restructuring of government.
Madam Speaker, it has been a long-standing practice of the Manitoba government to disclose salaries of civil servants and payments made directly by government to corporations, firms and individuals. In keeping with our desire to strengthen accountability, legislation will be introduced to require public disclosure of compensation for individuals whose compensation is paid either directly by the provincial government or by other public sector bodies or organizations that receive significant support from Manitoba taxpayers. In this way, the taxpayer will have the full benefit of knowing how their tax dollars are being spent.
1995-96 Surplus
Madam Speaker, our government was elected on a mandate to live within our means. Every single person in this province must do that, and so should government. We take that commitment seriously and our policies reflect that mandate.
I am proud to say that historic legislation, The Balanced Budget, Debt Repayment and Taxpayer Protection Act, was passed by the Legislature and received Royal Assent last November. Manitobans are now assured that their government will balance its budget each and every year. They are assured that the debt will be paid down in 30 years or less. Manitobans are assured that major tax rates will not be increased unless they have given their prior approval in a referendum.
This legislation has been widely praised. The Canada West Foundation and the International Centre for the Study of Public Debt both rated it as the "best balanced budget law" in all of Canada. The Canadian Taxpayers Federation and the Canadian Federation of Independent Business both described it as "model" legislation for other jurisdictions. Indeed, the CFIB described it as "a historic balanced budget law that will change the face of the province permanently, and for the better."
The financial results for the year just concluded, and the fiscal projections for 1996-97 and future years, reflect the hard work and sustained commitment to the principles enacted in the balanced budget legislation.
On the advice of Manitobans, our practice of accounting for lotteries revenue was changed in 1995-96. Net lotteries revenue is now drawn into general revenue in the year it is earned. Own-source revenue in 1996-97 includes a full years net income from the Manitoba Lotteries Corporation.
Madam Speaker, as outlined in the Third Quarter Financial Report, a surplus of $120 million is projected for 1995-96. This exceeds the $48 million projected in our 1995 budget, primarily due to stronger own-source revenue. In accordance with the provisions of the balanced budget legislation, this surplus will be deposited in the Fiscal Stabilization Fund. It would have been irresponsible to spend this surplus on programs that could not be sustained over the long term. Depositing the surplus to the fiscal stabilization fund means the resources remain available in the provincial savings account, to be used to protect public services in our province when unforeseen events put pressure on the province's treasury.
1996-97 Budgetary Plan
Madam Speaker, for the first time in over a quarter century, Manitoba has back-to-back surpluses. The 1996-97 budgeted surplus is $22 million.
In 1996-97, we will continue to provide what the Investment Dealers' Association described as "consistent and responsible fiscal management." We will continue to live within our means. We will not draw on the Fiscal Stabilization Fund for base-budgeting purposes.
Prior to federal transfers, revenue is down $76 million. That revenue reduction could have been accommodated without further spending actions due to the $73 million reduction in public debt costs.
However, despite our cushioning efforts, the massive withdrawal of federal funding support for provincial health, higher education and social assistance programs of $116 million in 1996-97 necessitated significant spending reductions.
Current program expenditure is down $54 million or 1.2 percent from 1995-96 budgeted levels. Capital program expenditure is down $30 million, largely reflecting the expected lower expenditure under the Canada-Manitoba Infrastructure Agreement.
Madam Speaker, last April we were re-elected on a record which included the longest-running freeze on major tax rates in Canada. High taxes kill confidence. Consequently, competitive tax rates are a necessary foundation for sustained economic growth. The foundation of competitive taxation has been laid over the past eight years in Manitoba. As CIBC/Wood Gundy stated: "The Province's relative competitiveness has improved significantly since 1987, when Manitobans paid the highest personal taxes." The results of this improvement are evident in Manitoba's strong economic performance.
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Medium-Term Fiscal Plan
Madam Speaker, our 1996 Manitoba budget provides fiscal planning projections through the fiscal year 1999-2000. The projections are based on cautious economic assumptions and prudent fiscal forecasts.
For 1997-98, the fiscal plan includes the further cuts to federal transfers for health, education and social programs. As well, the first deposit to the Debt Retirement Fund is due in 1997-98. The $75-million deposit is the first instalment on our debt reduction program.
Further program spending reductions of 2.2 percent will be required to accommodate the $104 million reduction in federal social transfers in 1997-98.
Economic growth will generate moderate own-source revenue increases. As a result, Madam Speaker, we are projecting surpluses in 1997-98, 1998-99 and 1999-2000. These surpluses will provide us with a number of options including:
reducing taxes;
enhancing programs;
increasing capital investment; or
reducing the provincial debt.
In our extensive and ongoing consultations with public sector stakeholders, we have been asked to consider providing publicly funded bodies with longer-term funding targets. In particular, a two-year funding target would provide greater certainty for their planning purposes. As a result, during 1996, we are prepared to undertake discussions with those groups to review options for two-year funding targets for possible future implementation.
Madam Speaker, the medium-term fiscal plan, together with The Balanced Budget, Debt Repayment and Taxpayer Protection Act, will ensure that debt levels decline and borrowing requirements are reduced.
Results are already evident. Debt is down from 1994-95 levels. Our plan for debt retirement provides for the full elimination of general purpose debt within 30 years.
Conclusion
Madam Speaker, Manitoba is truly a province of great people, people dedicated to the task of ensuring a bright and successful future for this place we all call home.
One year ago, Manitobans expressed their confidence in our government and the leadership of Premier Filmon and in our plans to make Manitoba strong together. These plans were built on the foundation of balanced budgets.
Manitobans recognized then, as they still do now, the benefits of a plan aimed at paying down debt. The benefits to be derived are not just for this generation but, more importantly, for the generations that are to come.
Let there be no mistake. Balanced budgets are not about statistics and debt forecasts. Balanced budgets are about people, about Manitobans, about ensuring government is able to continue providing the services our citizens have come to expect and trust.
That is the greatest legacy our balanced budgets will leave, the legacy of health and education programs that comfort us in times of need; nurture us as we strive to learn more.
Madam Speaker, we live in a changing Canada, a Canada that will not allow our province to stand still.
Let there be no doubt. We will not stand still. Manitoba will continue to lead the way.
We will act with confidence and determination:
to create jobs and economic prosperity;
to ensure quality health care is there for all Manitobans;
to ensure our young people have the knowledge and skills they need to succeed;
to lead the fight against those who threaten our safety and security;
to give Manitobans a hand up when they need it and not just a handout;
to provide the lowest-cost government possible;
to keep taxes down;
to balance budgets; and
to pay down the provincial debt.
Madam Speaker, in Manitoba, we have a quality of life that is virtually unsurpassed in the world today. I want to pass that on to my children and their children. I know Manitobans share that vision.
Madam Speaker, the foundations have been laid for this generation and for generations to come. This is truly a great province with a great future.
In closing, Madam Speaker, I would like to acknowledge and thank Manitobans for their support and understanding. It is their hard work, dedication and commitment that makes Manitoba the best place in the world to live, to work, to invest, to raise a family, and to pursue our dreams.
Thank you, Madam Speaker.
Mr. Gary Doer (Leader of the Opposition): I move, seconded by the member for Wolseley (Ms. Friesen), that debate on the budget be adjourned.
Motion agreed to.
Mr. Stefanson: Madam Speaker, I move, seconded by the Minister of Environment (Mr. Cummings), that this House at its next sitting will resolve itself into a committee to consider of the Supply to be granted to Her Majesty.
Motion agreed to.
Mr. Stefanson: Madam Speaker, I move, seconded by the Minister of Justice (Mrs. Vodrey), that this House at its next sitting will resolve itself into a committee to consider of Ways and Means for raising of the Supply to be granted to Her Majesty.
Motion agreed to.
Mr. Stefanson: Madam Speaker, I have two messages from His Honour the Lieutenant Governor.
Messages
Madam Speaker: The Lieutenant Governor transmits to the Legislative Assembly of Manitoba Estimates of sums required for the services of the province for the fiscal year ending the 31st day of March 1997 and recommends these Estimates to the Legislative Assembly.
The Lieutenant Governor transmits to the Legislative Assembly of Manitoba Estimates of sums required for the services of the province for capital expenditures and recommends these Estimates to the Legislative Assembly.
Mr. Stefanson: Madam Speaker, I move, seconded by the Minister of Health (Mr. McCrae), that the messages together with the Estimates accompanying the same be referred to the Committee of Supply.
Motion agreed to.
Hon. Jim Ernst (Government House Leader): Madam Speaker, I wonder if I might have leave to introduce a motion, that motion being concurring in the Report of the Standing Committee on Rules.
Madam Speaker: Does the honourable government House leader have leave? [agreed]
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PRESENTING REPORTS BY
STANDING AND SPECIAL COMMITTEES
Hon. Jim Ernst (Government House Leader): I move, seconded by the Minister of Education (Mrs. McIntosh), that the Report of the Standing Committee on Rules of the House, received on April 2, 1996, be concurred in.
Motion agreed to.
Hon. Jim Ernst (Government House Leader): Madam Speaker, I would again seek leave to introduce a further motion with respect to Private Members’ Business.
Madam Speaker: Does the honourable government House leader have leave to introduce a further motion? [agreed]
Mr. Ernst: Madam Speaker, the motion that I am about to present is some page and a half long and contains a lot of technical information. I provided copies of this motion to the member for Thompson (Mr. Ashton) and the member for Inkster (Mr. Lamoureux) yesterday to try and expedite matters.
So if the House will bear will me, I move, seconded by the Minister of Education (Mrs. McIntosh),
THAT the rules of this Rules of this House be further amended as follows:
(a) in Rule 3 the word “sittings” be substituted for “sessions” in line 4;
(b) in subrule 5(1)“2” be inserted immediately before “(3) and (4)”;
(c) in Rule 24 “Subject to subrules 25(2), (3), (4) and (5)” be substituted for “Subject to Rule 63.9"; and
(d) the following be inserted immediately after Rule 24;
Definition of “Resolution” 25.(1) In this rule, “resolution” means any vote, motion, resolution or address of which notice has been given or that has been introduced, but does not include any motion for first reading, second reading or third reading of a bill, or a motion to refer a bill to a committee.
Private Members’ Resolutions (2) Where a resolution of a private member, other than a resolution for an Order for Return or an Address for Papers, is reached for the first time on the Order Paper during Private Members’ Business, and it is not disposed of within that period, the resolution shall be placed on the Order Paper at the bottom of the list of resolutions of that type.
Request to “stand” or “adjourn” matters (3) During the Private Members’ Business, no request shall be made by a member to allow a matter to “stand” and no motion to “adjourn” will be entertained, with respect to private members’ resolutions.
Matters not proceeded with (4) Where the resolution of a member, other than a resolution for an Order for Return or an Address for Papers, is reached for the first time on the Order Paper during Private Members’ Business, if the member is not present, or does not proceed with the resolution at that time, the resolution shall be placed on the Order Paper at the bottom of the list of resolutions of that type.
Matters not proceeded with second time (5) When a resolution of a Member, other than a resolution for an Order for Return or an Address for Papers, is reached for the second time on the Order Paper for introduction, if the Member is not present or does not proceed with the resolution at that time, the resolution shall be removed from the Order Paper.
Time Limit on debate 26.(1) The total time allowed for the consideration of any private members’ resolution and any amendment thereto shall not exceed three hours.
Termination of debate (2) When the time allowed by subrule (1) has expired, the Speaker shall terminate debate on the item being considered.
Motion agreed to.
Hon. Jim Ernst (Government House Leader): Madam Speaker, I move, seconded by the Minister of Education (Mrs. McIntosh), that the House be now adjourned.
Madam Speaker: It has been moved by the honourable government House leader, seconded by the honourable Minister of Education, that this House be now adjourned (1:30 p.m. Wednesday).