Budget Speech - 2003
(April 28/2003)
It gives me great pleasure to speak on behalf of this Budget and talk about the positive news that the Government is moving forward on. I want to start, first, by congratulating the people who have served this Chamber and the people of Manitoba well for a number of years. I have had the pleasure of getting to know a number of them: the Member for Inkster (Ms. Barrett), the Member for Wolseley (Ms. Friesen), the Member for Riel (Ms. Asper), the Member for Radisson (Ms. Cerilli) and, the Member for Lakeside (Mr. Enns), the Member for Gimli (Mr. Helwer), the Member for Morris (Mr. Pitura) and Minnedosa. These are people who have served the government of Manitoba and the people of Manitoba well.
When I got elected in this job, I realized how hard it was, as far as working every day to not only look after the constituency, but also look after government business. I think that these people have served people well. Sometimes philosophies differ, but often your basic fundamental is to do a good job every year and make a difference.
Thank you very much to those people who served the province, did an excellent job and worked hard every day to try to make it a better place. So my best wishes to all of you in well-deserved retirement.
In the second part, I would like to talk a little bit about our Budget and what is happening. I have to admit I am an optimist. Not only am I a member of the optimist party, but I am optimistic generally. I think that we have a very, very positive future in Manitoba. I look at some of the things that have happened in the last while. Manitoba's economy grew 3.1 percent in real terms in 2002. That is in spite of September 11; that is in spite of many difficulties economically as far as trade with the issues, with terrorism, et cetera. We grew. In fact, we were second in growth in the province, and that is really an exceptional accomplishment.
Manitoba's employment rose by 9100 in 2002, a 1.6% increase to 567 000 people. If you look at the last downturn, we will take that back to 1989. What you have is you have a drop of about 8100 positions in the last downturn versus a growth. I think that really is an important statistic to remember.
Let us talk about the growth areas: Finance and insurance, growth by 7.3 percent; retail, growth of 6 percent; transportation, 3.9 percent; manufacturing. We have a wonderful diversified manufacturing economy. Solid and steady growth is a theme of Manitoba shrugging off a delayed recovery in the U.S. Manitoba posted a healthy 3.1% real GDP advanced last year. That was said by an economic study, not by the NDP government.
The other thing is you look at the growth and where we are creating growth. We are not trying to create low-end growth. They are trying to create high-end growth. If you look at some of the things that are being built, we have the new Mediplan Internet pharmacy in Niverville, which is being built now and is creating 300 new jobs. We have job postings placed for the new Simplot potato plant in Portage, 230 new jobs. We saw the announcement last week of a new $10-million pharmaceutical plant to open in St. Boniface, 100 new jobs and new investment. Twenty-one million dollar expansion last week by Winpak, which is in the great constituency of Assiniboia, which will create 13 new jobs. Cormer Group Industries have completed a $12-million dollar expansion, 78 new jobs. Biovail, a real star, announced last month they will need a hundred new employees in Steinbach, and that is just the start. That is 821 new jobs.
In fact, Manitoba is doing an excellent job of attracting new capital. Statistics Canada has indicated that the increase in capital investment in Manitoba will be 13.2 percent, much stronger than B.C., Ontario and almost double Alberta's 5.3 percent. We have created 9100 jobs in the 12 months of 2002 which set a provincial record. We are moving forward. It is important to note what type of jobs we are doing. We are not doing low-end jobs. What we are trying to do is high-end jobs that have high value added, that have good positive growth for the whole economy.
It is interesting to note that in the year 2000, we created 11 700 jobs; 2001, 3500; 2002, 9100, which means that we are producing two to three times the jobs. I think that is wonderful because we are working in co-operation with business, in co-operation with labour, in co-operation with educational institutions. We are working together to move the province forward. We are not creating an adversarial relationship, we are creating a positive relationship. I think that is important.
Let us talk about taxes a little bit. When we start talking about taxes, you have to look at what happens as far as trends. I know that in the nineties, you take school taxes, the proper taxes on school, school taxes in St. James-Assiniboia basically went up 60 percent to 70 percent. What has happened in the last three or four years, they have basically remained stable or dropped somewhat in the last few years. That makes a big difference because property taxes really, really hurt people on fixed income, people who are retired, people who have a hard time making ends meet. So that is just the school taxes.
What we did was the first year we were elected we increased the property tax credit by $75, the next year by another $75. Last year we helped decrease the ESL by 10 percent. This year we have made an announcement to decrease the education support levy another 20 percent. So what we have been doing is on a regular basis we have been dropping the burden that taxpayers have to pay on their property to support education. At the same time, what we have been doing is we have been adding money, funding as an increase to the education system. We have targeted certain areas. We have targeted special education, which are helping kids learn in schools, kids with disabilities, kids that need a special assistant. We have had good increases every year on that.
We have also increased the amount of capital spending. I know when I was working for Frontier School Division, we had a hard time trying to get D grants, grants to fix up the facility, to fix up the schools, to put in new roofs. Now we are putting that in so the facilities need repairs and then you do not have to replace them, which costs a lot more money.
I think that we have done a good job as far as keeping the burden of taxes down, especially property taxes, which does affect a lot of the seniors and those on fixed income.
I want to talk about the other taxes that we have changed. A two-earner family of four, $60,000–often the Opposition will say, oh, you do not have the lowest taxes, you do not have the lowest taxes, but what they fail to mention is health care premiums. Health care premiums are another form of tax. So when you are comparing jurisdictions, you have to compare apples to apples, cost of government.
What they will say is, oh, in Manitoba a two-earner family of four earning $60,000 pays $3,395 in tax; in Alberta they pay $2,011; in B.C. they pay $1,958. What that says, they will say, oh, you pay less tax, but what they fail to realize is that the B.C. family of four has almost a $1,300 health care premium; Alberta has about a $1,150 health care premium. So what happens is that when you add those all up, the taxes are very, very similar.
What they do not talk about is then you talk about we are the only province in western Canada that gives credits for renters and homeowners. So when you add the $400 property tax credit or renters' credit, then we are by far further ahead for the same family. So when you start talking about being the only province in the west offering rental credits and property tax credits, we are actually ahead. When you talk about the cost of living, mortgages, cost of the rent, electricity, insurance, et cetera, then we become $5,000 or $10,000 or $15,000 ahead, and that becomes important.
The other group that I wanted to just highlight because I am limited for time is a single person for $30,000. In a single person for $30,000 we compare very, very favourably when you take both the health care premiums and provincial income tax together. They will sit there and say again that we have a higher tax rate, because in Manitoba we have $1,826 taxes for a single person earning $30,000; Alberta $1,453; and B.C. $1,195. The Opposition and sometimes the media and some pundits of tax reform, supposed, will say, oh, you need to change because you do not have the lowest tax, but there they forget to add the B.C. $648 tax on health premium, which means $1,843 for them; Alberta's $528 health care premium, which is $1,981; versus Manitoba, with no health care premium, was $1,826. We are the lowest taxed in the category. Why? Because you compare apples to apples. You take all the costs, the health care premiums plus the taxes, and you will find that we compare very, very favourably. When you talk about our low cost of living, with insurance, electricity, et cetera, we become very, very competitive. That goes for families of four, $40 thousand, et cetera. You can go through it time and time again and realize that we are very tax competitive.
Other areas, if you talk about small business: I laughed today because I was reading an article put out by the Canadian Federation of Independent Business. It was talking about how important it was and how positive it was that the federal government had started to decrease small business taxes. I thought it was funny because they are starting to do it, but we did it three years ago. What we did was we increased the threshold at which they pay taxes. We decreased the tax rate. We know that small businesses are a driver of the economy. Small business we have been promoting. We have been supporting it. We have been supporting it through things like ENSIS and Crocus. We have been supporting it by raising the tax deductible level. We have been decreasing the tax rate. So we are a friend of small business. Not only are we a friend, but we are doing something concrete about it. I am pleased to be part of a government that knows where the economic drivers are and actually helps small business proceed.
Let us talk about electricity for a second. A lot of the bond-rating services, et cetera, started talking about the importance of a good solid future. Our future is in hydro-electricity. Last week I attended a great conference put on by MacKenzie Universal Funds. A lot of fund managers and investment advisors, et cetera, were there. These are not normally what we would call left-wing leaners, but here is what happened. Jeremy Rifkin, who is a world famous economist and writer who was hired by the European Union and many governments to advise on the future and where the economy is going, he spoke there. I have had the opportunity to read some of his books, and I have to admit I am a fan.
He started to talk, and I will quote some of the things. He said experts have been saying that we have another 40 years or so of cheap, available crude oil. Now, however, some leading petroleum geologists are suggesting that global oil production could peak and begin a steep decline as early as the end of this decade sending oil prices through the roof. While the fossil fuels era is entering its sunset years, a new hydro regime is being born that has the potential to remake civilization along radical lines.
Hydrogen is the most basic and ubiquitous element in the universe. It never runs out and produces no harmful carbon dioxide emissions when burned. The only by-products are heat and pure water. We are at the dawn of a new economy powered by hydrogen that will fundamentally change the nature of our market and political and social institutions just as steam and coal power did at the beginning of the industrial age. We in Manitoba have a great potential to build on this hydro. We can use the hydrogen formed by hydro-electricity to move our area forward to become competitive throughout the world.
It was interesting to see how Jeremy Rifkin has said that it needs to be a partnership between business, populations and government to move into the next century and into a new industrial age. It is nice that our Government has proven time and again that we can work between those groups and move the area forward. I think we have a great future in this. I think we have strong fundamentals, et cetera.
We can move forward with a hydro grid. We can have an east-west hydro grid and move power to Ontario, which was charging up to 33 cents on a kilowatt hour while we were paying about 3.9 cents. We could move electricity to Saskatchewan and Alberta which would be wonderful for them because, again, the price of electricity is huge. Not only is it huge, but most of their electricity is produced by burning coal, which is a high pollutant and creates a lot of CO2. So, hopefully, we can develop.
Just to let you know where our future is: Wuskwatim is 200 megawatts, which is a small dam; Kiask is 650 megawatts; and Conawapa is 1400 megawatts. These are all dams that can be produced and would create jobs, create good money and profit for our province, and also a good future for our future generations. We need to work on it, we need to develop it. We are a province that has proven it. Our contract for $1.7 billion for 500 megawatts for 10 years with Xcel Energy shows that we can build a dam, use our energy and build for our economy in the future. We have a great hope for this and we can do this well. I think we have a great hydrogen future and we can move forward on it and we can use it as a future growth area and rely on our natural resources.
The Opposition has a tendency of saying, oh, you should not use hydro as a generator of jobs or a generator of wealth. That is like turning to Alberta and saying, oh, you should not use oil revenues, or turning to Ontario and saying, oh, you should not use manufacturing taxes. It is a silly, ludicrous idea.
Manitoba Hydro is a resource, a natural resource that is part of our province and we should use it as a resource for the benefit of all.
I think it was incumbent upon our Government to equalize hydro rates so that those people in the North and in the rural areas actually pay the same electricity rates as those people in Winnipeg do, because, as Manitobans, we should share appropriately our resources.
I think when we get a $500-million bonus because of spiking energy prices in the States and then what we do is take half of that and invest in services and in debt reduction and pension payments, I think that is prudent and appropriate use of a natural resource that we have been blessed with.
In the future let us hope that it is not $500 million, let us hope that it becomes billions, and then we will have truly, truly a bright future. Maybe we will be the energy producer for all of Canada and replace Alberta in some ways.
I also have had the opportunity to read the preliminary Hydrogen Opportunities Report that was done by the Energy Development Initiative, and it is just wonderful. It is talking about where we can be going. The interesting part is in Europe they have actually moved forward so that they have a ten-year plan on developing this.
I will just hit a few other new changes. We will talk about some of the important things. Health care, we talk about health care. The important thing on health care is that we have been investing more money in appropriate things. The members opposite are talking about spending too much money. Our costs of spending money are in drugs, where we are having more money spent on drugs. More money spent on doctors, we actually have more doctors so you have to spend more money on doctors. We have money on Healthy Child, which promotes young children's well-being. We promote looking after parents and supporting parents. We are talking about areas such as public health. We have increased vaccinations and areas like in case of public health emergencies, which is very appropriate nowadays. So those are the areas that have the largest growth in health. Those are appropriate expenditures.
We are spending money on capital expenditures such as a million new dollars, over a million dollars in equipment in just the last year. We are just increasing things that will save money over the long period.
The other criticism I hear from over there is spending more money than we are actually taking in. Actually we have been following the balanced Budget. We have paid down the debt by $396 million in the last few years. We are actually the first government to address the pension liability, which is important for our teachers, our civil servants and our entire province, or we would have gone broke if we had not done it. Moody's of New York said that we were the second-best credit rating in the country. It was upgraded in January 2003 and their comments: a prudent appropriate management, very strong.
Members opposite want to support private health care. What they want to do is they want people to pay as they use, like in the States. I have had the opportunity to try to help two or three constituents who were in the States and did not have appropriate medical coverage. It is $100,000 for someone who has a heart attack and has an operation there. One couple has been hounded repeatedly by creditors who want them to sell their house, sell everything they have to pay the bill. That is not the type of health care that I would support. I would support something that is appropriate and where there are public-private partnerships and private public service is delivered. I do not want to see for-profit health care. I think it is a waste of money. I want to see us work together.
I want to talk about housing starts. In the year 2002, the Manitoba Real Estate board said the following: We had a banner year, 22.1% increase to 3617 starts, the highest level since 1989. Multiple housing starts: Units rose 19.5 percent to 601 new units; housing permits, $440.8 million, an increase of 29.4 percent.
Unemployment rate: Manitoba had 5.2 percent compared to Canada's 7.7, the best in Canada all last year. It also has the best or second best youth unemployment rate. We have strong fundamentals. Strong fundamentals support the stability of Manitoba's economy including one of Canada's most diversified business mixes. That is from the Dominion Bond Rating services. It also talks about prudent development.
So, in closing, we have a great history. We have a great future. Things are working well. I think the only thing that the Tories did better than us, which I have to remark on, is Elections Manitoba's annual report. If you turn to page 17, all it is is enforcement and prosecutions. In this case, it is one, two, three, four, five–five, zero. Five Tories being prosecuted or charged or moved forward on, on convictions on Elections Manitoba versus zero. So I have to admit the Tories have been leading us. They have led us in the prosecutions on the democratic process. Five versus zero. It sort of shows you what type of lead they want to do. We want to do a lead that works together with all groups, with all parts of society to better everyone and move everyone forward versus someone who does not believe in the democratic process, who does not believe in following the rules of a democratic process. So I am proud to be part of our party.
I look forward to the future because I think we have a great future paying down the debt, having an equitable tax structure, having fair treatment of everyone in society, working co-operatively with all groups and moving forward into the next century. So I thank you. I would like to once again congratulate those people who did service to the Legislature and I wish them well in the future. Thank you very much, Mr. Speaker.
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