Budget Speech - 2002
(April 26/29 - 2002)
It is truly a pleasure to get up and speak on this Budget and support this Budget. I read an article about the Budget which said it was a forward-looking Budget, it was a positive Budget, and it was a Budget for all Manitobans, and I believe that. I think it was Theodore Roosevelt who said: What we do for ourselves dies with us; what we do for our communities lives long after we are gone. That is why I am proud to be part of this Government. I am proud to be part of this Government because we are building. We are building on our communities, we are building on our province, and we are building for a bright future.
I look at our Government. What are we investing in? We are investing in roads. We are investing in infrastructure, such as roads and education. What we are doing is we are investing so that our youth in our province can go and afford to go to college and university. We have set up the first bursary program in many years. That is important, so that people can afford to go to school and for those who are able to go to school, it is not based on just financial ability, it is based on ability.
Water infrastructure. It is really exciting to see what we are doing as far as our water infrastructure and sewers are concerned, and all those types of projects to make sure our environment is strong and we keep people well and we have a legitimate, safe water system.
I look at parks. I look at the development of parks in our province. It is nice to see the park-protected areas that have been announced since the year 2000.
I look at the future as far as protecting workers' rights, as far as looking after the people who work hard every day for our province. I look at seniors and the programs where seniors are paying less tax. Seniors are paying less tax on property and seniors are being supported in all ways of life. I look at the family, at programs like the Healthy Child Initiative and programs for family that are important.
I look at other forward-thinking programs such as the alternate energy proposals where what we are doing is helping with things like alternate energy, geothermal heat, et cetera, that will save our province, save in emissions and also lead to less cost.
I am looking at the new technology focuses on industry and focusing on small areas, but also very important areas, like biotech and aerospace, and we will become centres of excellence for not only our province but across Canada and indeed the world. I think that is a very, very forward, progressive looking government. So I am very proud to be part of this Government.
I will go into detail on some of the things that we are spending money on. Health: I believe that we are spending a very prudent amount of money on health. We have 39.6 percent of our Budget going to health care. I know with an aging population, I know with a population that cares about having equitable and universal access to health care, I think it is a very prudent amount and it is a wise decision. I know that we are never going to be the highest-paid province for the employees, but we are paying them fairly, we are treating them reasonably, and we treat them with respect. I am proud to be part of a government that does that.
We spend 15.8 percent in our K to 12 system, and 5.9 percent in our university and college system. So we spend about 22 percent–21.7 percent–in education, and that is building for the future. I think what is important about that is we are building a base. If you are talking about true equity, education creates equity, education creates opportunity, and education is an investment in our future.
I was appalled by the previous government who did not invest in the infrastructure in education, in the roofs, in the buildings, in the structures. I am proud that we are investing in that. I am also proud of the fact that we are investing more money into special education, special education initiatives, which will help all students do well. I am proud of that.
I look at other investments like family services and housing. Mr. Speaker, 12 percent of our Budget goes to family services and housing. This is support so that all people can move ahead and progress and be supported and have a legitimate lifestyle.
Community, economic, and resource development, almost 13 percent, 12.9 percent of our Budget, is going to economic development and resource development. That again is planning for the future, and that is important.
I look at our Budget, and I would like to quote something from the BMO Nesbitt Burns, which is talking about our budget highlights. It said Manitoba did not backtrack on its commitment to control spending, paying down debt and trim taxes. Spending will rise only 2.5 percent, the smallest increase in five years with only priority areas such as health, education, families and communities benefiting.
It goes on further to state: Personal taxes were trimmed further, and the Government reaffirmed its plan to cut corporate taxes. These are good policies. It says: For the third straight year, the Government will provide $96 million to pay down general debt and fund the pension liability by $21 million and $75 million respectively. The Government deserves credit for tackling their pension liability, which will be funded in just under 30 years. As well, the provincial debt will be paid by 2036.
So what we have done, and as shown by Nesbitt Burns, is that we have had a challenging economic outlook, and we have presented a progressive, positive Budget that helps all Manitobans. I am really proud to be part of that Government.
When we compare the two governments, it is important to put accurate statements on the record. When we compare the two governments, four of the Tories' last five so-called surplus budgets were actually in the red if you use common, accepted accounting practices. The rosy bottom lines were achieved by regular infusions from the rainy day fund and draining other nest eggs like the special lottery account.
In 1997-1998, the Tories boasted a $76-million surplus with real $24-million deficit. So if you took common accounting practices, the $76-million surplus, or so-called surplus, was actually a $24-million deficit. In 1998, the Province went into the red by $154 million, in the red by commonly accepted accounting practices but should have been declared $23 million in the red. It is truly remarkable how they can have the audacity to call us poor fiscal managers, especially when we have only had an increase of 2.5 percent over last year, which is very prudent and positive.
I will go a little bit further to explain some of the very positive prudent and long-range plans that we are going through. One was the pension liability. The pension liability retirement plan will ensure that civil servants and teachers and others who have done service to this province and who are owed a pension–what scared me as a financial planner was the fact there was no long-range plan to pay for this liability. In fact, if you look at how the pension liability was to grow: by 2001, it was going to be $2.8 billion; by 2005, it was going to be $3.5 billion; 2015, it was going to be over $5 billion, and by 2028, it would have been over $8.4 billion, which would have surpassed the present debt.
I am proud to be part of the Government which two years ago decided to start addressing this huge issue, and we were doing the right thing. We started by $21 million, and now what we are doing is contributing $75 million to the pension liability. This is wise and prudent financial planning. What is nice about it is, when we started it after being ignored for many, many years, we decided to do two things. One is pay the pension contribution for all new employees. So now we are paying the pension contribution as it is owed to the TRAF and Superannuation Board, that people will have a pension when they retire. The other thing that we are doing is we are putting money into pension funds which generally earn between 7 percent and 10 percent per annum. Well, if the Government's general debt has to be paid at 4.7 percent and we are making on the pension plans almost double that, it is wise and prudent to invest the money, make, say, 8 percent, 9 percent, pay 4 percent on our debt, and what we do is earn the difference.
What this means is in this year alone we are about $5 million to $6 million ahead, and that increases by $5 million or $6 million and keeps on ramping up so that in a very short time we are hundreds of million dollars ahead by addressing this huge issue. I am proud to be part of the Government to do that, to ensure that civil servants, teachers, people who have worked for this Province actually do have a pension that is owed to them and can collect the pension. So it is really nice to see the whole picture that our Government started addressing it, and it is better to pay our liabilities and do it appropriately.
Let us talk about some other long-range plans that we have done. I feel very saddened by what happened in Walkerton. I think it was a true tragedy and a tragedy that should make sure that all governments wake up and pay attention, and I think our Government really started to open their eyes to what was happening as a potential tragedy within our province. I am proud to see that we have 33 water supply projects, and this is just in this year's Budget. I want to go through some of the infrastructure projects that dealt with water.
The member opposite from Fort Whyte keeps on screaming about an underpass or an overpass or whatever, wants $15 million. Well, to me it is a much higher priority to have people concentrate on safe, dependable drinking water and good treatment of our environment than an underpass. So I look at the water supply projects. We have 33 water supply projects that are ensuring clean, safe drinking water and waterline renewals, et cetera, in Emerson, Hamiota, Portage la Prairie, all across our province. There are 36 water treatment projects such as chlorination in Dauphin, water treatment plant upgrading in Lac du Bonnet, upgrading the water plant in Swan River and Thompson. So what we are doing is we are making sure that they are up to standards and people can rely on the water. Then we look at 26 water and sewer projects where we are ensuring that people can get water transported to their house, sewer transported away and treated so that it is safe. There are 26 of those around the province, 7 lift stations, 44 waste management control projects, 10 flood control projects and 4 more feasibility studies. These are located throughout our province. What is nice about it is we are not just looking after our constituents, we are looking after all Manitobans for governing, for all Manitobans and for the long-term positive health of all Manitobans.
There were 160 projects that were approved and are going forward in this province and in this Budget, and I am proud that we are focussing on water and sewer and our environment rather than just putting it into an underpass.
Let us talk about some of the new initiatives as far as the green environmental initiatives, protected areas since year 2000. We have now the Pembina Valley Provincial Park and park reserves in Goose Island, Grand Island, Kinwow Bay, Pelican Island, Pemmican Island, Sturgeon Bay, Walter Cook Uplands Caves, Birch Island, Fisher Bay. These are all the new park reserves. We also have 20 new wildlife management areas, and I am proud to see that we are actually getting new management areas. We are developing water conservation districts and we are developing our whole area in environment.
I would like to go a little bit more about our industry. I am very pleased with our Minister of Industry, Trade and Mines who has really got a long-term focus and is trying to work very hard with the industry to develop it.
The former government wanted to control, wanted to have a race to the bottom. They wanted to have low-skilled, low-paid, low jobs. Jobs that were not going to create a great deal of economic benefit. We are talking the low-end job. We are going to go the opposite way. What we are going to do is we are going to focus on skills at centres of excellence, high value-added jobs. We are going to focus on a high-skilled, high-educated workforce. We are going to focus on something where we have centres of excellence, so we do not have to compete for the low-end low job, lowest paid. We can go for the highest-skilled highest-paid jobs. I think that we have to focus on our education strategy, and we have done that with education and industry.
Let us talk about what Manitoba is like right now. Manitoba had the best-performing commercial real estate market in the country in the last half of 2001. Another thing is we have also scored very, very high in the industrial sector, in manufacturing, in growth in the time of slowdown. We have done very, very well in biotechnology. We are becoming a centre of excellence there. I am very proud of the fact that in areas such as the aerospace industry, we have gone into some wonderful education-industry partnerships to develop new initiatives. I am really, really pleased with that, especially in some of the ones that are in my constituency of Assiniboia. I believe that we are headed in the right direction.
The other thing that I would like to point out is let us talk about the changes. The Tories have often said, oh, tax and spend. Well, I would hate them to talk about themselves. Let us talk about some of the changes in assessed value in homes. I will bring up St. James because it is the constituency I follow.
In the 1990s, from 1990 to 1999, the cost of St. James taxes, including the ESL and property taxes, went up 47.8 percent. That is almost 50 percent the taxes went up during that period. That is the education taxes on property. Since we have come into power, that has gone down 9.1 percent on an average home. So there they ramped it up 50 percent almost, and we are dropping it about 10 percent. I am proud of that because that means that the seniors, those people on fixed income, those people who are having a hard time making ends meet, we are not only keeping the property tax steady, but we are dropping it.
Winnipeg had the reputation of being one of the highest-taxed property tax jurisdictions and now that is not the case. We are now falling, and we are falling in comparison to places like Edmonton, Calgary, Vancouver. I am proud of that fact because what we are doing is we are making it more affordable.
Other things that we have done. We have dropped taxes. We have dropped taxes to the average family. I would like to point out some of the tax drops that we have made. We have dropped taxes for: a single person, earning $40,000, will, in the four-year total, save $1,073 and have a 9.7% tax savings. A single person, who is earning $70,000, will have a tax saving of $2,334 for 10.2 percent from 1999 to 2003. We are dropping taxes. For a senior couple, earning $60,000, they are going to be saving 14.4 percent. A senior couple, who is earning $80,000, is going to earn 10.1 percent.
When we became Government a couple years ago, we were faced with huge taxes. What we are doing is slowly whittling them away so that people can afford to live and live well in this province. We were using some examples of senior couples, et cetera. A senior couple earning $80,000 basically in 1999 would have to pay $7,855. They have had tax decreases every single year. Within four years we are going to have over a 10% decrease then.
It is really important to note that even a two-income earner family of four at $60,000 started off in 1997, and that is in the years of the Tory government, our past Tory government, at about $4,500 in tax. That is $4,500 in tax. In the year 2001 we are talking about $3,600. By 2002 we are talking $3,400. So it is considerable. It is a $1,200 difference in tax. That is considerable.
Another thing that we need to talk about is corporate income tax. The members opposite often think that they are friends of big business and understand business. It is amazing and passing strange that they actually did not drop the corporate tax rate. They did not drop the small business tax rate, and our Government has done both. We have dropped the corporate tax rate to become competitive, and we also dropped the small business tax rate.
When you are looking at the drivers for the economy, small business is the driver. It is the major form of creation of jobs. It is also jobs that do not get up and leave, do not unplug like some companies, but what we are going to do is have permanent jobs, and it is nice to see that we have two things. One, in the small business threshold, we have increased the threshold at which they pay tax and we have also decreased the tax rate. So we are very, very business friendly, small business friendly, and we have done well.
We have also spent some money in a wise investment, in the Film and Video Production Tax Credit. This is one that creates a lot of money from outside the country, outside the province. They come in, they develop video and film industry, and I have to admit I was amazed at the huge increase in investment, the large number of films that are being filmed here on a regular basis, and the huge spinoffs. These are generally companies that would not locate here, would not do business here if we did not provide that tax credit. It is a huge boon for our economy and boon for our industry. We have a wonderful place to film. We have a great national heritage site here, so it is great for turn-of-the-century movies, and it is also one of the industries where we can compete on a world, global basis. So that is wonderful to see, that we are going to continue that and enhance the amount of money that is spent there.
So what we have done in this Budget is we have invested in education. We have invested in industry. We have invested in post-secondary, which is our future. We have had things like apprenticeship, co-operative vocational ed–ucation expand, and what we have done is we now have a good future.
It is nice to see that we are borrowing ideas from other groups, that we are creating incentives to stay in Manitoba. Therefore people in nursing, in medicine are using these incentives to actually remain in our province, work in our province and help our province.
It is neat to see that when you are comparing the treatment of our Government with others, in the year 2000 we were the highest taxed province for a family of four earning $60,000. By 2001, we were the seventh lowest, and in 2002 we are the sixth lowest. So what we have done is we have actually whiled away that. We have whiled away the property taxes. We have increased the property tax credit for homeowners. We have also decreased the education support levy which also makes it affordable, so people on fixed incomes and people on moderate incomes can actually afford to live in Manitoba. We truly have a Manitoba advantage.
Now we talk about how we pay for that. We pay for that with equity. We pay for that in an equitable fashion, and that fashion is that we use a fair income tax rate structure, and we also take some money from Hydro.
The members opposite, they are berating us for using the Hydro dividend, and I would like comment a little on our Hydro dividend. First, I believe it is prudent. We are taking not all; we are taking a small percentage of each year's profits. We are talking about paying down the debt and making $600 million in a period of about five or six years. So the draw on Hydro is less than 50 percent of that. What we are talking about is taking the money from export sales.
Let us compare that to what happened in the MTS privatization. There the major winners were places like Wellington West. Wellington West was the appraisal. They were the ones who made a lot of the money on valuing the company and selling the company. What is scary about it is that I believe it could have been sold for more money. It was not sold for good value. In fact, it was approaching $40 and over $40, yet was only sold for a third of that.
What is neat about it is it was sold, and who bought it? Well, you look at the board of directors who got lots of shares for their service to the Crown corporation and for their service to the private corporation, so people who got rich were the board members. I challenged the media, I challenged lots of people to look at who was on the board and who was awarded what shares at the time. You look at their annual report on 2002, and you will still see a number of connections with the members opposite, who financially benefit. I would rather have it where we take a Crown corporation and use the money for all Manitobans and keep the asset and keep the asset working for all of us, rather than sell the asset to the benefit of very, very few people.
I know, when it was sold, it was supposedly sold to Manitobans, but right now, Manitobans are not the majority shareholder. They are by far the minority shareholder. So who is getting the benefits? The large corporations who bought the shares. They are the ones who made the profits. Who are the ones who took the shares, turned them over and made a tidy profit? It was not the average Manitobans. It was the people who knew that the company was undervalued and knew that they were going to make money when they invested in it.
Let us look at what happened in the rates. The rates have basically almost doubled in only four or five years. We went from one of the lowest telephone rates in the country, and I repeat the lowest telephone rates in the country, to now one of the highest rates in the country. Who makes that? The shareholders again.
So I look at it now. We have the lowest hydro rates in the country, and that makes it very, very economic, et cetera. What happened is that I look at a government that is prudently taking less than 50 percent of the money that they made in five years, and what you do is that money is going to the benefit of all. It would be much better than people making money on a million dollars of shares when they are a member of the board. It is much better than people who are hired from Wellington West, et cetera. It is inappropriate, I believe, that these people are benefiting from a sale of a public corporation. I believe it is better to have a public corporation to the benefit of everyone, not to the few privileged rich people or who got richer.
Anyhow, I also look at this: We have a society which is based on fairness and equity. We have a democracy. In a democracy, what happens is you are trying to do what is best for everyone, what is best for all Manitobans. By taking a small dividend and spreading it among everyone in health care, education, roads, infrastructure, child development, industry development, what you are doing is you are benefiting all Manitobans and building for the future. I know that this Government is building for the future. I believe that it is far better for everyone to benefit by a large building, a plan, a long-term plan that is developing, rather than having some people get rich off everyone's efforts.
So I am very, very pleased to support this Budget. I am very, very pleased to be part of this Government that is looking to the future, building for the future and has a great vision for the future. Thank you, very much.
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