Budget Speech - 2005
(March 16, 2005)
Mr. Acting Speaker, I am pleased to put a few words about this very good budget on the record.
I am pleased to speak in favour of the budget because it is a vision. It creates a plan. It creates a framework on which to build a strong future. It is a future of health care, good roads, positive education, support for seniors, support for business, support for farmers, manufacturers, mining industries, students. What it is, it is a vision for all Manitobans. Just like our party represents all of Manitoba, this is a budget for all Manitobans.
I would like to contrast my speech to the doom and gloom of members opposite and talk about where we are building our future and where it is important to be. First, I look at the economic framework of our economy. We have a very good economy. It is diverse. It is modern, and it is competitive.
In 2004, the real GDP growth was 2.8 percent, and total business investment in this province was 5.8 percent. That is almost 6 percent. The areas that are important to note are, first, mining. Mining was up 8.1 percent. We had good strong metal prices. The mining industry had record-high exploration. When people explore, that is good for our economy, but they will find deposits that then can be produced, which will be good for the economy. We have had excellent expansion of our petroleum industry.
We have had good expansion of construction. We have had a 4.7% increase in construction. Housing starts are up 5.6 percent, and single-family dwellings are over 10% increase. That is a huge increase, and it is nice to see building going wild in this province, Not just in single-family dwellings, but commercial buildings. We have the new airport coming up. We have the library, Millennium Library. We have had multiple office starts. We have had the new bank going up. We have the MTS Centre. Multiple buildings are going up. In fact, real estate has gone up an average of 5.3 percent. What is nice about it is it is not just in the city of Winnipeg. It is all across our province. It is from the north, in Flin Flon and Thompson, to rural communities. Our growth is across the board into the whole province.
I want to give you some numbers of the change in different industries from when the members opposite were in government. The printing and publishing industry has improved by 295 percent, chemicals by 292 percent, wood by 220 percent, primary metals by 168.5 percent, plastics by 136 percent, fabricated metals by 126 percent and food industry and production by 108 percent. Those are numbers of increases from when members opposite were in government and now. I am proud of those because it shows that it is across the whole province.
When we talk about labour market, we, right now, have an all-time high employment level, 576 000 people are employed in our province this year. We have the second lowest unemployment rate in Canada, and the labour force participation is the second highest in Canada at 69 percent. This is also taking into account that we actually have a net immigration. There are more people coming to our province than leaving. That is why we have more houses, that is why we have an increase and expansion of our economy because more people are coming in, industry and business expanding, personal incomes are going up, and it is a wonderful opportunity of growth.
It is interesting to see also in our investment when people are saying we do not have a plan. We have made sure there is a good foundation for investment. There has been a 9.9% increase in capital investment and it is well over the Canadian average, and when you look at it, it is crossed away. That is not even considering major construction on the floodway or the new hotels. Again, things like Biovail, Cangene, the Richardson Centre for Functional Foods, St. Leon wind farm, which is really wonderful to see a very good project starting there, the U of M, et cetera. The Airport Authority, by the way, I was at the first public meeting, and people are actually excited. People are invigorated that we actually have a growing economy and there is a positive future for people in Manitoba.
We will talk about the growth. Between October '03 and '04, there was a growth of over 10 000 people. That is true growth and the total increase was the best since 1985. Also, there have been three consecutive years of positive growth under this government. In the nineties, there was no huge building boom. There was no craze because people were leaving at unprecedented levels. Now people are coming back to the province because they can see a good plan for young people, a good economic plan. They can see how they can participate in a positive way so they are coming to Manitoba and they are growing the economy.
When we start talking about business, we have a very important pillar that people need to know about. One is that you need to combine your education strategy and your labour force strategy by having affordable tuition, by having bursaries and scholarships, by having an ability for people to get the training they need. I have to commend the Minister for Advanced Education (Ms. McGifford) because the college expansion initiative has created huge opportunity for young people to get the skills they need and to drive the economy in the future.
Just to let you know what our economy is like, 79 percent of Manitoba small businesses export goods interprovincially and 60% export to the States. Lots of our businesses, like businesses with less than 50 percent of the people, comprise 94 percent of the businesses present. Small businesses are a core to our economic development. They are core because they source a lot of goods locally. They have depth and they put their roots into the province. So what have we done for the small business? First, we did a tax break from 8 percent, and this budget announces that in a couple of years it goes to 4 percent. That is cutting by 50 percent the small business tax rate.
Also, when members opposite were the friends of business, they had a $200,000 threshold for the small business tax. We have doubled the threshold to $400,000. So we halved the tax, doubled the threshold. That means that the small business has a great environment in which to flourish.
We have also worked to support the Canada-Manitoba small business centre, and we have also helped to support businesses across the province. It is neat to note that the bankruptcies are down by 26.7 percent. The farm bankruptcies are down by 3.6 percent and personal bankruptcies are down by 10.3 percent. So, if you look at it, of the negative news that we heard lots of in the nineties, that is the only thing that is down. The negative news is down. The positive news continues to be very, very buoyant.
I would also like to point out that we have increased the Research and Development Tax Credit from 15 percent to 20 percent, and that shows that we have a better future as far as the U of M's SMARTpark, as far as the research in food, as far as development because that is increasing the research and development and moving that forward.
As far as the pension liability, one of the things that we have to understand about long-term liability and debt is that we have to make sure that we follow a responsible action. I think it is very responsible that our government looked at this huge pension liability that was going to keep on going up that would have handcuffed our province economically in the future. So I thought it was very prudent economically that we started to tackle that. We were the first government in 40 years that decided that this was important, because every year the debt would have gone up, and it would have been a huge difficulty in a number of years. What we did is we started to pay it, and I think it is very prudent that we paid it. What we have done is not only are we paying down the debt of the province, we are also paying down the pension liability, which is prudent, and that will make sure that we have a good economic house in order. That is good long-term financial management.
We have grown the economy. No, not "we." The entire province has worked hard together to grow the economy by $10 billion more. That is a huge growth in economic terms, $10 billion more. Never has it happened, and definitely not under the members opposite. It is neat to see that our expenditures due to the debt have been down. They are down by 33.9 percent. Other expenditures, we have been able to move those to areas that are important such as health care, roads, education, et cetera.
It is neat to see what happens when you are paying down the debt. You are paying down the debt, your cost for debt services is going down, so we have followed that. We are not only balancing under just the old Tory legislation, which they, at first, required us to balance under, which we did. Also, the Tories said, "Oh, we followed that rule; you should follow the rules." And we did, and we did it successfully. Then they are saying, "Oh, but we do not agree with those rules; we have to make it tougher." And we did. We followed the Auditor, and we are balancing under both systems, systems that I might point out the former government would not have balanced under. So while they are screaming that you should have balanced under both summary budget and the balanced budget legislation, the test of their budgets under their watch would never have passed that standard. I would like to point out that this budget passes that standard.
I would also like to point out we have no draw on the rainy day fund. In fact, there have been three times that governments have put money into the rainy day fund. One, on the sale of a Crown asset, and I might add telephone bills are double the cost than what they were under their march. So what they did was they sold the telephone company, they put the money in the rainy day fund and they drew it down. There are only two other times when money was put it, both under our watch, and it is nice to see that, again, we made a $314-million contribution to the rainy day fund so that we have provided money there, and we did not do it by selling a Crown asset. We did not do it by pushing so that people would have to pay higher telephone rates.
Then, when we look at it, where are we growing? We have very innovative markets. We are growing in biotechnology. We are growing in transportation and transportation industry. We are growing because we are at the centre of the mid-Canada corridor. We are growing in areas of high skill, high technology, and what is nice about that is that when you have two competition ways you can either go into low-skill, low-wage type of economy, or you can go into a high-skill, high-wage economy. Manitoba is starting to focus on the high-skill, high-wage economy, and that is important.
That is why, again, when I point out, we have an education plan that links to the economic plan. When you look at the businesses, the businesses also agree. When you look at the surveys from the different business organizations, they say their biggest challenge is a human resource challenge, because they need to make sure they have the skilled, trained people to make sure that their business works and operates profitably. We are willing to work, and are proving to work, as a good, solid partner in that endeavour.
The other point I would like to make about this budget is that we continue to make important investments to quality of life and affordable living. I was pleased to see the cultural announcement, where we are putting more money in culture in the film industry. I was pleased to see that we are putting more money into sport. I think it is wonderful that our government continues to look at healthy living as a proactive way to address health care needs. I look at it where we have the cheapest hydro-electricity rates in North America, and I repeat, for both business and for consumers, the cheapest hydro-electricity rates in Canada.
We do not have a health care premium. I often think that it is important to compare apples to apples. In some provinces they say they have a low provincial tax, but they do not say that they have added on a health care premium. We do not have a health care premium and we have fair taxation. I might point out that that taxation level has dropped. In terms of the corporations, it went from 18 and now it has been announced that it is going down all the way to 14 percent. That is consistent dropping of taxation, and the corporate tax rate has not dropped under the former government, under the Tory government. It dropped under an NDP government, because it is fair and balanced. Small business tax rate, I might reiterate, has gone down under this government. It did not go down under the Tory government.
We also have very affordable house prices. We have good auto insurance prices. We have great recreation and cultural amenities. We are expanding cottages so that people can afford cottages. When you are looking at it, in case people need a view, what you want to do is if you have a $60,000 income in Manitoba, you can afford to live. If you have less than that, you can afford to have a good quality of life, where if you were in Toronto or Montreal or Vancouver, you would be on a subsistence level.
I think that we have, when you take the Royal Winnipeg Ballet, the symphony, the theatre centre, the football, the hockey, the baseball teams, the golf courses, the beaches, the best fishing around, you have a wonderful opportunity, you have a wonderful standard of life, you can afford to own your home in your lifetime. You do not have health care premiums which are very onerous, and should be considered in most of those other provinces. We also have a health care system that we can be proud of.
Again, as Minister of Industry, I would like to point out that in the U.S., the big three auto makers spend more on health care premiums for their employees than on steel that goes into their vehicles. Chrysler estimates that it spends $700 on employees' health benefits for every car produced in the U.S. compared to $233 for each car produced in Canada. That is a huge saving per car.
In order to allow my fellow caucus members to speak, I will just go through very quickly some of the KPMG's competitive studies. Basically what it says, and I reiterate, that we have done well competitively from most other cities. We have done well in most Canadian cities, and we compare well to the U.S. We have been successfully innovating. We have spent some money on the Composite Innovation Centre, where we have partnered with industry and the feds, where we are helping industry expand and innovate. We have gone to the Advanced Manufacturing Initiative, AMI, where we have gone with the federal government, the provincial government and industry, again, to show people how to compete, and not just compete locally, but globally. What this centre does is it takes the best in manufacturing, best of tech-nology, and shows small businesses, medium-size businesses how to innovate and how to compete, and that has been a wonderful announcement by this government.
I continue to be proud of how we can work together, work with business, work with labour, work with students, work with farmers to develop and expand the industry of Manitoba. I am proud of the fact that we have an open-door, positive approach and it is working. It is working by growing the economy, it is working by having more people move here, it is having a very positive effect on the immigration system and it is nice to see innovative things like the Immigrant Investor Program that shows that we are at the front of innovation, of expanding our economy and bringing good things to this province. We have a great future. I hope the other members opposite, from the Conservative and the Liberal parties, vote for a progressive, innovative, active budget.
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