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Hon. Eric Stefanson (Minister of Finance): Madam Speaker, it gives me great pleasure to present our government's 1998 Budget Address to the people of Manitoba. I am also happy to say that this address heralds the 10th anniversary of Gary Filmon's leadership as Premier of our great province.
Under Premier Filmon's outstanding leadership, our province and its people have made exceptional economic and social progress. Madam Speaker, the stage is set for an even brighter future. On a personal note, I believe this budget once again confirms that Premier Filmon's vision is benefiting all Manitobans.
I would like to express our appreciation to the many Manitobans who took the time to participate in the budget consultations we held across our province last fall. My colleagues and I were impressed with the hospitality and thoughtful input that we received in the 12 areas we visited. From Virden to The Pas to Beausejour to Letellier to Winnipeg and many other communities in between, Manitobans shared with us their vision for the future of our province and our children. I also want to thank the hundreds of individual Manitobans and organizations who took the time to write, call or meet with me to express their views on our challenges and our opportunities.
Madam Speaker, we listened, and this budget reflects what Manitobans told us.
It is a proud moment for me to present the 1998 budget. Today, Madam Speaker, Manitoba's finances are healthier than at any time in the past quarter century. Our economy is strong, vibrant and growing. The era of rising debt, excessive taxes and high unemployment is behind us. Before us lies unprecedented opportunity for all Manitobans.
During our first eight years in office, Madam Speaker, our government worked hard to balance the budget. In 1995, Manitobans' efforts were rewarded when we tabled the first balanced budget in our province in 22 years. The budgets of 1996 and 1997 were also balanced, and now I am proud to present the fourth balanced budget in a row.
Balanced budgets have allowed us to launch the first sustained attack on the province's accumulated debt since the 1950s. Balanced budgets have also allowed us to sustain and protect vital social programs like health and education.
Madam Speaker, sustained balanced budgets have given Manitobans confidence that they need not suffer from major tax increases. Due to this confidence, people are spending, business is expanding and more jobs are being created. Total employment has reached record levels in each of the past three years. All of our job growth has been in the private sector, where it does not depend on the support of tax dollars. There is a very important lesson here; balanced budgets create jobs.
Indeed, 1996 and 1997 have been two exceptionally good years for Manitoba's economy.
* Private investment is at a record level.
* Retail sales are at a record level.
* Manufacturing shipments are at a record level.
* Foreign exports are at a record level.
* Farm cash receipts are at a record level.
Madam Speaker, I am especially pleased that a record number of Manitobans are working. Employment growth in the private sector was exceptionally strong in 1997, rising by 16,800 new jobs. This was the largest increase in private sector jobs in 18 years. The impressive increase in employment in 1997 pushed the annual unemployment rate down to just 6.6 percent--the lowest rate since 1981. Indeed, the unemployment rate fell further at the beginning of this year to just 5.7 percent.
Madam Speaker, after years of hard work, Manitobans now have real choices and real flexibility.
During the consultations leading up to this budget, some 2,000 people from all across Manitoba offered their views. Their input has helped to set our priorities for this budget. Madam Speaker, Manitobans were remarkably consistent in their views on the priorities their government should pursue. I am proud to say that the 1998 budget acts on their advice and counsel.
* Manitobans told us to continue living within our means and spending tax dollars wisely. Madam Speaker, this budget balances the books for the fourth consecutive year.
* Manitobans told us that our highest priority should be to relieve the next generation of the burden of our accumulated debt. Madam Speaker, this budget increases our debt payment to $150 million--double the required payment.
* Manitobans told us that strengthening our health care system should be our top program priority. Madam Speaker, this budget targets significant additional funding to improve health care services for Manitobans. This budget also targets more resources for education, children, families and justice.
* Manitobans told us to keep Manitoba's taxes competitive to continue to fuel a growing economy that creates more jobs and more opportunities. Madam Speaker, this budget extends Manitoba's overall tax rate freeze for an 11th consecutive year; and in fact, the 1998 budget cuts a number of key taxes.
Madam Speaker, this budget reflects the goals and aspirations that Manitobans have for our povince. It pursues them with determination and vigour.
Madam Speaker, sustained balanced budgets are the best way to secure and enhance our health care system and other vital social programs. Balanced budgets allow us to devote more resources to maintain and improve the high-quality health care services that Manitobans rely on.
We have consistently made better health care our top program priority. Since 1987-88, our health care budget has increased by almost $600 million or 45 percent.
During budget consultations, Manitobans told us that they value our health care system. Madam Speaker, in this budget, we are devoting over $100 million more for health care. In total, the budget for Manitoba Health will be $1.93 billion for 1998-99.
The additional resources for health are being targeted to the health care priorities of Manitobans. Madam Speaker, I am pleased to announce that this budget provides almost $11 million more to address the need for additional dialysis services in Manitoba. We are also promoting preventative measures. For example, since kidney failure is strongly connected to diabetes, we are adding $600,000 to a Provincial Diabetes Initiative.
Our government recognizes that we must improve access to critical care services. Madam Speaker, this budget devotes $2.4 million more to support the additional intensive care beds at the Health Sciences Centre, additional beds for panelled patients, and the expansion of the Neurosurgery Program at St. Boniface Hospital.
Madam Speaker, everywhere in Canada, waiting lists for some services have become unacceptably long. This budget commits $2.5 million to improve access to joint replacement surgery, ultrasound diagnostics, MRI machine use, CT scans, radiation therapy, and bone density assessments.
As well, our government is continuing to anticipate and respond to changing demographics and population needs of Manitobans. Madam Speaker, this budget dedicates $23 million more for the Home Care Program. This brings the total resources for home care to over $123 million, triple what was spent on this program in 1987-88.
Our government also wants to ensure that Manitobans residing in personal care homes continue to have quality care and service. Madam Speaker, this budget provides $4.5 million more for the operation of personal care homes.
We believe that prevention activities are very important. They help keep Manitobans healthy and reduce health care costs. Our government will continue its commitment for the Aboriginal Health and Wellness Centre.
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Madam Speaker, our government recognizes the importance of public health. This budget provides $1 million for a Staged Immunization Initiative. This initiative will reduce the incidence of serious illnesses for both children and adults in our province.
Madam Speaker, as part of our commitment to early diagnosis and illness prevention, this budget supports the expansion of the Manitoba Breast Cancer Screening Program with the addition of two mobile breast screening units. In partnership with the Manitoba Cancer Treatment and Research Foundation, which raised sufficient funding to acquire the initial mobile screening unit, our government will provide an additional $670,000 to purchase a second unit and operate both units.
Madam Speaker, our government is moving to address the infrastructure capital requirements of our evolving health care system. Therefore, I am pleased to announce a 1998-99 health capital program totalling $63 million. This program provides for 26 priority projects throughout Manitoba, including construction of a 40-bed personal care home in Oakbank, a new 20-bed home in Hartney, and the development of a new personal care home in The Pas to replace an older facility. Early this spring, Lions Manor will be starting the construction of two projects in Winnipeg. The first is a 102-bed personal care home, and the second is a 30-person Alzheimer Care Unit. Coupled with this capital program is yesterday's announcement about the Misericordia Hospital redevelopment. This project will add 280 long-term care beds and 169 transitional beds in Winnipeg and bring the total capital program $94 million.
The new capital program also includes 13 conversion projects. These projects will modify space within existing buildings to meet the changing needs. My colleague the Minister of Health will provide further details on the 1998-99 health capital program.
Madam Speaker, our government recognizes that advanced medical equipment is an important component of a modern health care system, and therefore I am pleased to announce a special allocation of $10 million for the purchase of medical equipment. This spending will be targeted toward clinical and patient care needs.
Our government recognizes that there is a need for additional resources to support the search for new solutions and evidence-based decision making. That is why this budget allocates $2 million for the Health Research Initiative in 1998-99. This funding will support continued health research activities at the Manitoba Cancer Treatment and Research Foundation, Children's Hospital Research Foundation, St. Boniface Research Centre, Health Sciences Centre Research Foundation and the University of Manitoba.
Our government wants to ensure that Manitobans have timely access to high quality health care now and in the future. That is why 34.6 percent of the regular expenditures in this budget will go toward meeting health care needs. We will spend almost $1,700 for health care for every man, woman and child this year. Our province's spending on health care as a percentage of budget expenditure is the second highest of all provinces in Canada.
Madam Speaker, our children are the future of our province and of our economic life. Investment in children and youth is one of the most important social investments that we can make.
Madam Speaker, spending on children, youth and their families is increased in this budget by over $20 million. Most of this funding will be directed toward programs that respond to the nutritional, learning and social needs of children and youth. Our government will spend $2 million on positive parenting programs, healthy child development, and strategies to prevent adolescent pregnancy. We have also committed an additional $300,000 toward a strategy to prevent fetal alcohol syndrome.
Madam Speaker, I am pleased to announce that this budget invests $2.1 million in early childhood nutrition initiatives. Our government also recognizes that some children require additional help in developing the skills they need to enter and be successful at school. To address these needs, this budget allocates over $2.6 million to preschool and early-years programs, including an early literacy program to help at-risk Grade 1 students develop reading skills.
Madam Speaker, our government has consistently said that the best form of social security is a job. Therefore, I am pleased to announce that this budget devotes nearly $2 million more for training and job placement strategies to help income-assistance families enter the workforce and lower-income working families secure better paying jobs. In 1998-99, our government will spend $13.6 million on training programs for Manitobans who are in receipt of income assistance or in low paying jobs.
Madam Speaker, quality child care helps parents enter and remain in the workforce. Therefore, I am pleased to announce that this budget dedicates an additional $4.8 million to provide more accessible, portable and flexible child-care options. Several of the initiatives that I have just outlined will be financed, in part, through Manitoba's participation in the National Child Benefit.
My colleagues, the Minister of Family Services (Mrs. Mitchelson) and the Minister of Education and Training (Mrs. McIntosh), will provide additional details on our new and expanded initiatives for children, youth and families.
Madam Speaker, our government is committed to an effective and modern education system. Throughout the 1998 budget consultations, Manitobans stressed that a quality education system is key to a child's successful future and the future of our province.
Madam Speaker, Manitobans want a modern education system that focuses on outcomes and results. The education system will continue to be strengthened by:
* emphasizing core subjects;
* by establishing regular assessments to measure student performance; and
* by giving parents and the community a stronger voice in our schools.
An additional $4.2 million will be invested in 1998-99 in education renewal initiatives, with the further development and implementation of new curricula and an expansion of standards testing.
As was announced earlier this year, funding in support of public school education is being increased by 2.2 percent for the 1998-99 school year. The overall increase amounts to $16.7 million. We recognize that technology literacy is one of the "new basics." As part of the additional funding for public schools, $1.8 million will be spent to enhance access to information technology in the classroom.
Madam Speaker, as was recently announced, our government has approved $29.6 million for the schools capital construction program for 1998-99. We have also committed $30 million to a new three-year initiative, the Aging Buildings Program. The Aging Buildings Program will help school divisions upgrade and extend the useful life of structurally sound older schools.
Now more than ever, Madam Speaker, youth must have ready access to training and post-secondary education so that they can succeed in our labour market.
Madam Speaker, I am pleased to be able to announce significantly enhanced and better targeted overall assistance for post-secondary students and recent graduates. These initiatives will provide further incentive for our students to study in Manitoba and help to reduce the debt loads of our students. Our government's increased support will be directed to:
* our participation in a national harmonized student loans program;
* $1.6 million for new Interest Relief and Debt Reduction Programs; and
* a greatly enhanced Scholarships and Bursaries Initiative.
Under this $5 million initiative, our government will match $1 for every dollar of new funds raised for scholarships and bursaries at the post-secondary level. Based on an average scholarship and bursary of $1,000, we expect that 10,000 students will benefit from this initiative starting in 1998.
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The Manitoba Learning Tax Credit will be re-profiled to complement these initiatives and will contribute $15 million in support to Manitoba students and their families. It is still the only credit of its kind in all of Canada.
Madam Speaker, statistics show that Canadians with a university degree have higher earnings and significantly lower unemployment rates. This budget increases operating grants for universities by $8.9 million, bringing the total to over $215 million. My colleague the Minister of Education and Training (Mrs. McIntosh), together with the Council on Post-Secondary Education, will provide details about the allocation of the additional funding.
As well, our government will continue to direct almost $9 million toward capital projects for the repair or upgrading of buildings on our university campuses.
In addition, $5.3 million over two years will go toward the construction of a new Nursing Building at the University of Manitoba. This building will increase classroom space for the Nursing Faculty, providing our health care system with nursing services in the years ahead.
Manitoba's community colleges have a national reputation for their success in adapting to meet the needs of our changing labour market. Madam Speaker, I am pleased to announce that we are increasing the operating grants for the colleges by $1.1 million, or 2 percent over 1997-98.
Our government will spend $16.5 million more in 1998-99 in direct support to students and post-secondary institutions. Manitoba students and their families will also pay nearly $6 million less in Manitoba income taxes this year. The total budgeted expenditure on students and post-secondary education is $320.6 million.
Madam Speaker, our government believes that all Manitobans want to be self-sufficient and full participants in their communities. Perhaps the most pressing challenge that our province faces today is developing the skills of Manitobans, in particular, our youth, so that they may take advantage of the opportunities created in our thriving economy.
Madam Speaker, this past December, all First Ministers agreed that youth employment is a national priority requiring the involvement of both orders of government. We are actively working with the other provinces, the federal government and the private sector to create more opportunities for youth. Our government will continue to support our student and youth employment programs. In 1998-99, it is expected that more than 15,000 students and youth throughout our province will benefit from these programs.
Manitoba's apprenticeship training program plays an important role in developing a highly skilled workforce. Our government believes there are opportunities in our province that will support the expansion of the apprenticeship program from 2,000 to 4,000 in-school apprentices over these next three years. Madam Speaker, that is why I am pleased to announce that our government will provide $3 million in 1998-99 to support Manitoba's apprenticeship program.
Our government recently completed negotiations with the federal government to integrate training and employment programs for unemployed Manitobans; $54.3 million will be spent this year on training and employment services that link unemployed Manitobans with jobs. We have worked proactively to reform our income-assistance program through the Employment First focus.
Successful programs such as Taking Charge!, Youth NOW and Opportunities for Employment give income-assistance recipients the training and skills that they need to move into jobs. Since 1996, almost 1,900 graduates from the Making Welfare Work and other related training programs have obtained jobs. Income-assistance caseloads and costs have declined substantially as our economy creates more jobs, and people are making the transition to employment.
In this budget, we increase the total support for the Making Welfare Work programs to $9.3 million. This budget also invests $4.3 million in other innovative programs that offer education, training, job readiness and job search services to enhance Manitobans' employment prospects. In addition, this budget increases our support for Community Based Adult Literacy Grants to over $1 million in 1998-99. Last year, these grants offered almost 1,700 adult Manitobans training in literacy skills.
We believe it is important to support adults with disabilities so they can live and participate as active members in our communities. Therefore, I am pleased to announce that this budget increases funding to Adult Services programming by over $7 million. These initiatives will help more people find jobs and live independently within our communities. We want to help all Manitobans achieve economic independence, and a brighter future for themselves and their families.
Madam Speaker, our government is committed to strengthening our justice system and implementing further initiatives that help fight and prevent crime.
Madam Speaker, we have zero tolerance for domestic violence. That is why our government is allocating an additional $1.9 million for our action plan to deal with domestic violence.
In 1995, our government announced that we would spend $14 million for community policing in Winnipeg. This funding was provided to put 40 more constables on the streets of Winnipeg. Madam Speaker, this budget allocates $2 million for the fourth year of our seven-year commitment.
This budget provides almost $10 million for capital projects, including a maximum security unit and safety upgrades at Headingley Correctional Institution, the completion of the Winnipeg Law Courts Lockup, and the commencement of renovations and expansion of the Brandon Courthouse. Approximately $2 million will be spent on the construction of a new custody unit at the Agassiz Youth Centre.
Madam Speaker, to prevent youth from becoming involved in criminal activity, we will continue to support initiatives like the Youth Justice Committees, Urban Sports Camps, and Choices Youth Program.
It is also important to work actively with young offenders to ensure that they do not reoffend. Therefore, Madam Speaker, over $500,000 in additional funding will be directed toward expanding the intensive support and supervision programs that target and monitor young offenders on temporary release and selected young offenders on probation.
Madam Speaker, our government will enhance Victims Assistance Services including a $625,000 increase in grants to expand Victims Services Programs throughout our province.
Madam Speaker, our government's total spending on Justice has increased by 6.8 percent in 1998-99. My colleague the Minister of Justice (Mr. Toews) will provide additional details on these initiatives.
Madam Speaker, Manitobans enjoy a very high quality of life, thanks in large measure to the wide variety of options for entertainment and enrichment.
The arts, festivals and cultural events of Manitoba symbolize our province's creativity and cultural pride. The not-for-profit performing arts are generously supported by audiences, and both the public and private sectors in our province. In fact, this support is stronger in Manitoba than any other province in Canada.
As well, Madam Speaker, our province should be very proud of its accomplishments when it comes to the hosting and delivery of amateur and professional sporting events. For instance, Brandon received recognition from right across Canada last summer when it hosted the most successful Canada Summer Games ever.
Madam Speaker, a number of Manitoba's finest athletes are gathered in Gimli right now for the Manitoba Winter Games. Almost 1,600 participants from across our province will compete in 12 different sporting events.
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Beginning tomorrow, Madam Speaker, our province welcomes the 1998 Brier which will result in the crowning of a new Canadian Men's Curling Champion. This fall, the 1998 Grey Cup Championship will be held here in Winnipeg. Over the Christmas season, Manitoba will be the site of the 1999 World Junior Hockey Championship. This premiere hockey tournament will bring teams, families and fans from all over the world to our province.
Madam Speaker, in the summer of 1999, our province will be centre stage when we welcome the Pan American Games. The 13th Pan American Games will be the third largest multisport athletic competition ever held in North America.
Madam Speaker, the economic benefits, job opportunities, and memories that these sporting events bring, contribute greatly to the quality of life across our fine province.
Madam Speaker, our government believes in working in partnership with local governments to make Manitoba the best place in Canada to live.
Direct grants to municipalities include the provincial-municipal tax-sharing (PMTS) payments. This year, the PMTS payments will total $64.2 million, up 4 percent from 1997-98. Manitoba is the only province to allocate a portion of provincial personal and corporate income tax revenues directly to local governments.
The Rural Economic Development Initiative (REDI) was established by our government in 1992 to stimulate long-term economic development and diversification in rural communities. Madam Speaker, this year an additional $1.8 million will be dedicated to REDI. As well, I am pleased to report that over $13 million has been approved for major water and sewer projects throughout our province.
Last year, our government committed $96 million in capital funding to the City of Winnipeg under a third six-year Urban Capital allocation project. This budget includes $18.5 million for our contribution toward urban capital projects in 1998-99, an increase of $2.5 million from last year's budget. Over and above urban capital projects, I am also pleased to announce that our government will contribute $5 million for residential street repairs in Winnipeg in 1998.
Highway construction and maintenance create jobs and facilitate the greater movement of goods and people throughout our province, linking our communities, and benefiting our entire economy. Madam Speaker, this budget provides an additional $7.1 million for highway construction. Further, an additional $3.2 million will be spent on highway maintenance. In total, our government will spend over $170 million on improving our province's roads and highways in 1998-99, $10 million more than last year.
Madam Speaker, our government believes in the importance of ensuring all regions of Manitoba share in the economic benefits we are enjoying.
The sustainability of Manitoba's northern communities is of vital importance to the continued strength of Manitoba's economy. Our goal is to improve the ability of northern communities to deliver municipal services independently. Madam Speaker, I am pleased to be able to announce $500,000 for a new initiative creating sustainable communities. My colleague the Minister of Northern Affairs (Mr. Newman) will work with northern communities to ensure that a more independent and sustainable service delivery structure is in place.
Madam Speaker, the development of infrastructure will improve the quality of life in northern communities. Therefore, in 1998-99, $3.6 million or $1 million more than 1997-98, will be spent on capital projects that are related to infrastructure development in a number of northern communities.
Madam Speaker, this budget continues our support for programs such as the Northern Youth Summer Program. Through this program, a variety of students from across our province travel to remote northern communities to offer recreational and educational activities to children.
I am pleased to report that we are making a major contribution to develop the potential of Canada's only major Arctic port at Churchill. Manitoba will contribute $6 million for harbour dredging over these next two years.
Madam Speaker, Manitoba's billion-dollar minerals industry provides an economic base for several communities in both the North and the South. Geologists believe that extensive tracts of untapped mineral deposits remain to be discovered.
Therefore, Madam Speaker, this budget continues the Mining Exploration Assistance Program, the Petroleum Exploration Assistance Program and the Prospectors Assistance Program.
Madam Speaker, Manitoba has one of the strongest economies in all of Canada. Our growth rate has ranked in the top three among the provinces for three consecutive years. Our economy is stronger now than it has been in many years.
I would like to review some of the economic highlights of 1997.
* Employment grew by 2.4 percent in 1997--the largest annual increase in 11 years. All of the increase was in the private sector, and all of the new jobs were full time. It is my opinion that one of the most important accomplishments in 1997 was the decline in the annual unemployment rate to just 6.6 percent--the lowest level since 1981. Manitoba today employs more of our working-age population than we did in any year during the decade of the 1980s, and the unemployment situation continues to improve. In January it was just 5.7 percent.
* In 1997, total investment growth in Manitoba exceeded the national average for the fifth time in six years. Since 1991, total investment in Manitoba has increased 36 percent--nearly double the national increase.
* Farm cash receipts grew much faster than the national average in 1997 and reached a new record high of $3 billion. This was the sixth consecutive year that farm cash receipts achieved a new record level in our province.
* Manufacturing shipments expanded at a double-digit rate reaching $10 billion for the first time. I am especially pleased to report that since 1991, manufacturing investment in our province has grown at 10 times the national growth rate.
* The growth in Manitoba's exports to foreign countries exceeded the national increase for a fourth consecutive year. Our exports to the United States have tripled since 1990.
Madam Speaker, it is no coincidence that employment has shown strong growth, driving down the unemployment rate, at the same time that our government has restored order to Manitoba's public finances.
That is not to say, Madam Speaker, that we are satisfied. On the contrary, all Manitobans want to see the unemployment rate go lower still. But it is clear that balanced budgets and competitive tax rates are key elements in any strategy to create and maintain a full-employment economy.
Again, Madam Speaker, balanced budgets create jobs.
Madam Speaker, the foundation of our fiscal policy has always been to create conditions conducive to strong economic growth and jobs.
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Our success can be seen in Manitoba's low unemployment rate and the impressive growth in the economy. However, the most direct evidence can be found in the exceptional record of private sector investment. In 1998, Manitoba will record its seventh consecutive year of rising private investment. Only Alberta has such a consistent record of increases within Canada. This consistency says a great deal about the strong and rising business confidence in our province. Acrylon Plastics, Maple Leaf Foods, MCI, the Royal Bank, Springhill Farms and Winpak are just a few examples of the local, national and international companies that are helping to expand and diversify our economy and create thousands of new jobs.
Madam Speaker, our government has pursued a variety of targeted initiatives to promote investment and job creation in our province, such as tax credits for manufacturing and research and development.
Last year, we introduced the Manitoba Film and Video Production Tax Credit to advance the film industry in our province. It is projected that production activity will double to over $40 million in 1998.
Madam Speaker, since we took office in 1988, our government has reduced the impact of the payroll tax by increasing the exemption level for annual payrolls. The number of employers subjected to the tax has been cut 78 percent, from about 8,000 in 1988, to 1,800 now.
Madam Speaker, with this budget we are cutting the payroll tax rate. Effective January 1, 1999, the payroll tax rate will be cut from 2.25 percent to 2.15 percent. This is an important step in reducing this tax on jobs. We believe it will encourage employers to expand their operations in Manitoba and to hire more Manitobans. Manitoba continues to do its part in keeping payroll taxes down.
Madam Speaker, to further encourage investment and job creation, I am pleased to announce that the corporation capital tax exemption will be increased from $3 million to $5 million of taxable capital, effective for taxation years ending after January 1, 1999. This change will mean that 900 more companies will no longer have to pay this tax.
Madam Speaker, we have all heard concerns about the potential impact of the year 2000 issue for businesses and governments computer systems. Therefore, I am pleased to announce that the provincial sales tax will no longer be applied to custom-developed computer software. This change will assist businesses in preparing for the year 2000, and it will help firms acquire and use specialized software at a lower cost. This, in turn, will create more jobs right here in our province.
Madam Speaker, in co-operation with our private sector partners, our government has worked to increase the annual supply of venture capital to approximately $30 million in1997. We have set a goal to double this commitment to $60 million per year by the year 2000.
To provide much-needed capital to Manitoba's science and technology sector, Madam Speaker, I am very pleased to announce that we have committed $5 million to create the Manitoba Science and Technology Fund. This investment is expected to leverage $15 million to $25 million of private sector venture capital which will be used to assist high technology Manitoba companies. My colleague the Minister of Industry, Trade and Tourism (Mr. Downey), will provide additional details on this new fund.
Madam Speaker, to further strengthen the research infrastructure in our province, I am also pleased to announce that our government will invest $7 million in 1998-99, and a total of $35 million over five years in a new initiative called the Manitoba Innovations Fund. This initiative will allow proponents to carry out world-class scientific research and technology development in the fields of science, health, engineering and environment. This initiative will fund projects on its own or in concert with the Canada Foundation for Innovation.
Madam Speaker, our government is continuing to encourage crop diversification and value-added activities. Accordingly, I am pleased to announce the expansion of the Diversification Loan Guarantee Program offered through the Manitoba Agricultural Credit Corporation. This program helps farmers access the capital necessary to diversify into more profitable commodities and add value to primary production. My colleague the Minister of Agriculture (Mr. Enns) will provide further details on the expansion of this program.
In addition, Madam Speaker, our government is expanding our contribution to the Agri-Food Research and Development Initiative by over $3 million this year. This will bring our total commitment to this initiative to $6.5 million in 1998-99.
Research and development activities are essential for sustained economic growth and the creation of high-quality jobs both now and in the future.
Madam Speaker, our government is investing more funds to provide our hospitals, universities, colleges, research foundations, businesses and entrepreneurs with the resources they need to undertake exciting new research or expand their activities in innovative ways. Our five new and enhanced initiatives, totalling $25.5 million, show our strong commitment to research and development activities right here in Manitoba.
Madam Speaker, significant provincial, federal and municipal financial resources were spent fighting the flood last spring. In 1998-99, additional resources will be directed to disaster- assistance payments, to reconstruct our communities, as well as to floodproof against future floods. It is estimated that total expenditures on flood-related measures will exceed $400 million. Of this total, our government's share is expected to be approximately $100 million.
The total resources will go toward:
* Disaster assistance costs related to the 1997 flood.
* The repair and replacement of infrastructure, bridges, dikes and drains which were damaged or destroyed during the 1997 flood.
* Home and business floodproofing, and building community ring dikes.
Manitoba's former Premier the Honourable Duff Roblin had a vision which inspired the building of the floodway. Time and time again, Duff's Ditch has saved the City of Winnipeg from flooding. Our government would like to formally recognize his vision. Madam Speaker, I am very pleased to announce that a park will be built and dedicated to the Honourable Duff Roblin.
Madam Speaker, Manitobans can be proud of the fact that we have the lowest-cost government anywhere in Canada. Spending taxpayers' money wisely continues to be extremely important to our government and Manitobans.
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Our government continues to pursue new ways to offer excellent public services at the lowest-possible cost to taxpayers. These include the One Tier Welfare Initiative which will streamline the administrative processes for delivering income assistance within Winnipeg, with the province assuming responsibility for the delivery of these services.
A further example is the devolution of active training measures from the federal government to the province.
Our government and the federal government have agreed to establish a jointly operated Business Service Centre in Winnipeg. This centre will provide a single point of access for service to small- and medium-sized firms.
Madam Speaker, in 1989, our government established the Fiscal Stabilization Fund to act as a savings account. During budget consultations, Manitobans told us that the fund must remain and continue to support our strong financial footing. The Balanced Budget, Debt Repayment and Taxpayer Protection Act sets a target of a minimum balance in the Fiscal Stabilization Fund of 5 percent of Consolidated Fund expenditures or about $280 million.
In 1998-99, a $226 million transfer will be made from the Fiscal Stabilization Fund to finance a number of one-time initiatives in priority areas. These include:
* An additional $75 million payment for debt payment. This doubles our 1998-99 debt payment to $150 million.
* $60 million to further bridge the drastic federal funding cuts to health, education and family services.
* $41 million to cover the province's 1998-99 share of the 1997 flood costs and the floodproofing program designed to rebuild and protect homes, businesses and farms in the future.
* $50 million to support special capital initiatives. These expenditures will create jobs and contribute to further economic development. Some of the projects to be funded in 1998-99 include:
* $5 million for residential street repair in Winnipeg;
* $5 million for highway construction;
* $5 million for medical equipment; and
* $7 million toward the Manitoba Innovations Fund.
The transfer will bring the balance of the fund to approximately $340 million as of March 31, 1999. A second $50 million draw for special capital initiatives will be made next year provided our fiscal targets are met.
The Fiscal Stabilization Fund will continue to provide welcome insurance that we will be able to sustain public services even in the event of unforseen difficulties.
Madam Speaker, our government understands that a fair and competitive tax system is the key to a strong economy. Therefore, I am very pleased to announce that we are cutting our personal income tax rate. The personal income tax rate will fall from 52 percent to 50 percent.
The reduction will take effect in two stages: for 1998, Manitoba's personal income tax rate will be cut from 52 percent of federal basic tax to 51 percent. Taxpayers will see the benefits of the reduction on their payslips starting July 1 of this year.
On January 1, 1999, Manitoba's personal income tax rate will be cut to 50 percent. As a result, Manitobans' personal income taxes will be cut by $22 million in 1998, and by $45 million in 1999.
Madam Speaker, all Manitoba taxpayers will benefit from these tax cuts. They leave more money in taxpayers' hands to spend as they choose. They will also help business in our province retain and attract skilled workers. The tax cuts keep Manitoba's tax rates competitive with other provinces. In turn, Manitobans' spending and investment decisions will stimulate more economic growth and more jobs.
In 1997-98, we will achieve a third consecutive budgetary surplus. The 1997-98 surplus is now projected to be $44 million. As we announced in the 1997 budget, Madam Speaker, our government made its historic first payment into the Debt Retirement Fund. This was the first step of our 30-year plan to remove the burden of debt from our children and grandchildren.
Madam Speaker, the most noteworthy fact is that we have been able to maintain and enhance our funding for health care, education and families, despite federal cuts of about $240 million annually.
Madam Speaker, this budget is a balanced approach to meeting the priorities of Manitobans. In this budget, we increase our debt payment to $150 million, $75 million more than required under our act. In addition, this budget provides over $100 million more for health care and significantly more resources for education, children and families. This budget also cuts key taxes and maintains our overall tax freeze for the 11th straight year.
Excluding extraordinary items, total revenue in 1998-99 is projected to be $188 million or 3.5 percent higher than forecast in last year's budget.
Total regular expenditure is up by $192 million or 3.6 percent. Over 50 percent of this increase is allocated for health care.
Total capital expenditure, including the $50 million special capital initiative, will be $363 million. The special capital initiative is targeted for new medical equipment, highways and residential streets, scientific research and other public works.
Madam Speaker, this budget shares the benefits and projects a surplus of $23 million. Four balanced budgets in a row is a very significant accomplishment and it is an accomplishment that all Manitobans can take pride in, and they can take pride in our financial performance.
Madam Speaker, our medium-term plan charts the course that our government will follow over the next four years. The features of this plan are the following:
* extending the string of balanced budgets to seven;
* continuing to pay down Manitoba's debt;
* keeping our taxes competitive with no tax increases;
* continuing support of priority social programs; and
* sustaining our commitment to capital spending.
Madam Speaker, our government's first throne speech, nearly a decade ago, set out our vision for Manitoba. We wanted to create:
"A competitive and diversified economy which will provide increased job opportunities for our citizens, and pay for quality health, education and social programs."
Madam Speaker, that first throne speech also set out our path to that goal:
"By living within our means, our government will be able to introduce measures to reduce the burden of taxation and strengthen the competitiveness of Manitoba industry."
Under the leadership of Premier Filmon, we have never lost sight of that goal. With the continued support of Manitobans, we delivered on what we promised.
Our policies have proven themselves, Madam Speaker, and we will continue to build on them. By keeping our budgets balanced and our financial house in order, our economy will continue to grow even stronger, creating more jobs and new opportunities.
Now, Madam Speaker, as we move closer to a new decade and a new century, we can set our sights even higher.
* We will continue to balance the budget.
* We will further improve health care and education or Manitobans.
* We will make our communities safer.
* We will eliminate our province's debt.
* We will keep our taxes competitive and encourage further investment.
* We will create more jobs.
In short, Madam Speaker, our goal is to see Manitobans all across our great province share in the benefits of balanced budgets and a strong economy.
Thank you very much, Madam Speaker.
Madam Speaker: Order, please.
Mr. Gary Doer (Leader of the Opposition): I move, seconded by the member for Kildonan (Mr. Chomiak), that the debate on the budget now be adjourned.
Motion agreed to.
Mr. Stefanson: Madam Speaker, I move, seconded by the Minister of Justice (Mr. Toews), 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.
* (1210)
Mr. Stefanson: Madam Speaker, I move, seconded by the Minister of Industry, Trade and Tourism (Mr. Downey), 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.
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, 1999, 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 Family Services (Mrs. Mitchelson), that the messages together with the Estimates accompanying the same be referred to the Committee of Supply.
Motion agreed to.
Hon. James McCrae (Government House Leader): Madam Speaker, I move, seconded by the honourable Deputy First Minister (Mr. Downey), that this House do now adjourn.
Motion agreed to.
Madam Speaker: This House is accordingly adjourned and stands adjourned until 1:30 p.m. Monday next.