Province Législature Session Type de discours Date du discours Locuteur Fonction du locuteur Parti politique Alberta 24e 3e Discours du budget 11 mars 1999 M. Stockwell Day Trésorier provincial PC Mr. Day: Mr. Speaker, approximately nine months from now we will see the birth of a new century, the approach to the new millennium. For some people each hour closer to that marvelous date of 2000 brings a heightened sense of anxiety and questions about the future. Many of their questions are shrouded with clouds of concern regarding things like the unknown fallout of the now infamous Y2K problems. Other questions are on the lighter side: more human; less harmful. For instance, if next winter sets record cold temperatures, will we reminisce about the winter of zero zero, or will it be the winter of oh oh? If the Oilers or the Flames win the Stanley Cup two years from now, will we say that they won in '01, or will we simply say they won in one? Time will tell how these issues settle out. But for the people of Alberta as we cross the finish line of '99, some issues will already be settled because, Lord willing, in the year 2000 Alberta will have not only a balanced budget and the lowest overall taxes in Canada but also a net debt of zero. Mr. Speaker, that's quite the accomplishment for a province that began this century as a territory in the Dominion of Canada, a colony of sorts. Alberta was seen by many as an attractive yet unfortunate tract of land that added a few days of travel for people heading to the coast to find their dreams. Now, 100 years later, Alberta is a leader among provinces, a vibrant and productive province, the province that Canadians are moving to in record numbers to build their homes and pursue their dreams. In fact, in the last year alone over 55,000 people moved to Alberta, and we warmly say to them: welcome home. Mr. Speaker, only six years ago in Alberta we were burdened with record debt, annual deficits, and layers of taxation and regulation that made us unattractive and hard to get along with. It was only six years ago that more people were moving away from Alberta than were moving in. It was only six years ago that our unemployment rate was 10.8 percent. It was only six years ago that Premier Ralph Klein put together a plan to reinvent government, restructure services, and retreat from previous incursions into the lives of our citizens. Our critics claimed that the Klein plan would crash, unemployment would skyrocket, business would fail, and people would flee. But six years later the results speak for themselves: 57,000 new jobs created in this last year alone; the province boasts an unemployment rate of 5.7 percent and the most productive workforce in the country; $28.4 billion in new investment in 1998; the lowest poverty rate; and the best credit rating in Canada. Mr. Speaker, we didn't get it perfect, but we got it right. Part of Alberta's attraction for people in business is our honest and open style of government. One of the commitments we made was that we would show and tell Albertans exactly what is going on in this government. We eliminated guesswork. We are accountable for our actions. It was more than a bureaucratic exercise when we changed our accounting and reporting methods; it was a business exercise. Yes, we were inspired by the private sector to provide public quarterly reports and clean up our accounting practices. We knew business and industry must be accountable to their shareholders and must adopt the most effective practices in order to remain competitive. We will continue to learn from the private sector. Every Alberta government ministry has a set of goals that are reviewed for progress every year. If you're going to spend $16 billion of taxpayers' money, you'd better know what results you are getting. Keeping score in our document called Measuring Up allows us to do just that. Mr. Speaker, these new practices helped attract business from across the country. In turn, workers came from all corners, more than 55,000 new people moving to our province last year. That's like having the entire population of Langley, B.C., and Moose Jaw, Saskatchewan, pack up their houses and move to Alberta. Mr. Speaker, we welcome new arrivals. They come with skills to offer and energy to match, but the added population accelerates the demand for basic services. Forty-eight thousand of those new arrivals will use health care within the first year of their arrival. Thousands of new students will need teachers and computers in schools and library and training equipment in colleges and universities. Thousands will be seniors needing the services of the best seniors' benefits program in the country. Many will grow businesses that strain the limits of the transportation and resource systems of our municipalities. Add to these numbers more than 37,000 new Albertans born each year, and you can see the challenges that come with the Alberta advantage. It's the challenge of prosperity, and we will meet those challenges in Budget '99. We will meet those challenges despite the fact that we face a turbulent global economy and low commodity prices. Budget '99, Mr. Speaker, is a credit to each and every government MLA here today that has worked so hard to make it happen. This is their budget. Budget '99 is the right balance. Today I am announcing that Budget '99 will see a 1.6 percent increase in our overall revenues to $16.9 billion and a 2.2 percent total spending increase to $16.2 billion. Budget '99 will see strengthened fiscal responsibility balanced with significant increases in health and education funding. Budget '99 will make history in the area of taxation and see Alberta's net debt eliminated. That's what we call a balanced budget, Mr. Speaker. We hear daily from Albertans that one area of increased spending they support is health. Mr. Speaker, we have listened to those Albertans. If all we did in Budget '99 was increase health spending based on population growth and inflation, I would be announcing an overall spending increase of approximately 4 percent. That would be significant, as we already spend $4.5 billion on health. But we are going beyond that because our Premier, along with others, was able to convince the federal government to return some of the health money they took from us between 1995 and 1997. We will inject more money and target specific spending to specific needs: addressing waiting times, improving key procedures, and expanding frontline services. Many Albertans will be pleased to hear that the increase in spending for health in Budget '99 is not 4 percent to match growth and inflation, not 5, not 6, not 7, not 8 but in fact an 8.7 percent increase in spending . Mr. Speaker, this government cares about the health of its citizens. Mr. Speaker, we knew our health care system needed a cash infusion, but cash is not the only answer. In 1982-83 health spending was about 20 percent of our total budget. In '92-93, just 12 years later, it grew to 24 percent of all spending. Budget '99 shows that health will consume 30 percent of all spending. And one year into the next century our health spending will top $5 billion for the first time in history. These increases come with goals and outcomes required, with clear directions on where the money should go. This government remains totally committed to the Canada Health Act, but Albertans need to help us with the driving question facing all Canadian governments today: how much of our total government spending should go to health care? Our Premier has taken a responsible and consultative approach to find the answer to that very question by calling caregivers and care consumers onto the playing field to continue the dialogue and search for innovative solutions. So while I offer you my assurances that there is a three-year plan in place for health spending, that we do have clear direction, and that our focus is on the front lines of service and prevention, I also need to say that the discussions in the field must continue. All ideas need to be explored. Albertans told us that education is another priority area. This year, if we were to fund all growth pressures and inflation, we would look at a substantial increase of something like 4 percent on top of the $3.1 billion that we spent last year. However, I can tell you with education, as I did with health, that the overall increase this year will not be 4 percent, not even 5 or 6 percent but 7.1 percent. In fact, the ministry's three-year business plan shows a total increase by 2002 of 19 percent. Mr. Speaker, this government cares about the future of young Albertans. Attached to these dollars are directions for spending in specific areas: $26 million annually to address the special health needs of students in school, over $85 million for the '99-2000 school year to increase the basic school grants by 3 percent -- smile, Bauni Mackay, wherever you are -- more than $50 million for the '99-2000 school year to address enrollment growth. We also expect results and outcomes. Mr. Speaker, as with health, more money isn't the only solution for the changes in the education system. The Minister of Education is introducing as part of the three-year plan an exciting new performance component that is unique in Canada. Available to all districts and schools will be an extra resource fund that awards innovations and improvement in performance. Measuring will be based upon an individual school's past performance to determine their room for improvement, so schools will not compete with each other but against their own past record. Mr. Speaker, we're all aware of the Jamie Escalantes of the world, the teacher who annually takes deprived inner-city Los Angeles students and turns out record numbers of advanced algebra and calculus achievers who defy all the social predictions and excel under the rigorous conditions of national testing. Well, Alberta has education leaders like that. Under this incentive program teams of Alberta educators will now be eligible for added funds individually and for their districts. This approach has worked in other areas of government. For instance, Advanced Education and Career Development rewards and encourages progress by postsecondary institutions through the performance envelope. In addition, an achievement bonus was introduced last year that focused on performance-based awards for the public service. It applies now on a year- by-year basis for managers and is being offered to all members of the public service who achieve certain criteria in the performance of their duties. These are not automatic so-called merit awards. These awards, granted on an individual and department wide basis, reflect genuine achievement and savings attained related to the business plans of ministries and government overall. This is normal practice in the private sector, and we are the first government in Canada to adopt this practice in the public sector. We believe in people, Mr. Speaker. We want future generations to continue to feel proud of this province. I want future generations to continue to have access to top-notch health care and world-class education. Mr. Speaker, I know that for this to happen, we must be good fiscal stewards. So to be a good fiscal steward, I must add a note of caution regarding the increased spending on health and education. In terms of health care alone, I say in all good faith that there is literally no end to the list of well-intentioned requests for increased spending. It would be wonderful if every town and city could have its own MRI and CAT scanners. We acknowledge the growing number of practitioners in all fields whose skills in prevention and relief of medical conditions is sought increasingly by our citizens. Add to this the ever growing, dazzling array of pharmaceutical products with promising results and mile- high costs, the outer-space cybernetic high-tech data collection systems that promise to track every diagnosis ever made, and you get a small idea of the magnitude of well-meaning requests that are voiced daily. I indicated two years ago that because the health delivery process in Canada offers quality service and quality products at no visible cost to the users, we will only see increases. Even though we are attaching outcome-based results to the dollars given, how much do we continue to allow this spending to grow as a percentage of our overall budget? Why do I raise these issues, Mr. Speaker? Because when spending grows faster than revenues, sacrifices must be made somewhere, and both health and education spending have been growing at a faster rate than our revenues. So, Mr. Speaker, I say to our critics: if you want, criticize the methods or the areas of spending. But in the face of these increases there is no statistical ground whatsoever on which to stand and say we have not significantly increased our funding in health and education. We ask you to direct your energies with ours to finding the best ways to spend the money we have. With these cautions, make no mistake about it: this government will settle for nothing less than the best health and education systems in the world. And to maintain this, spending must be sustainable. While growth pressures significantly impacted health and education, they've also had quite an effect on our infrastructure. One of the things needed right now in this province is a way to physically accommodate all of these new Albertans, because when all of these people moved here, they left behind their roads, their schools, and their hospitals. Budget '99 commits an additional $150 million to infrastructure funding to Alberta municipalities, bringing total spending in '99-2000 to $ 1.3 billion. This is the first installment of a three-year, $450 million injection to keep our capital infrastructure the best in Canada. Based on the recommendations of the Premier's Task Force on Infrastructure the city of Calgary will receive $31.1 million in each of the next three years, the Edmonton capital region will get $29.3 million, and $29 million is committed to the rural component of the north/south trade corridor. These numbers aren't a big surprise, so let's take a look at the long term. Over the last year the government undertook a review of major infrastructure programs with the help of private representatives. The review focused on how infrastructure investments are planned and spending priorities established. Based on the recommendations of the Capital Investment Planning Committee, the priority-setting process for infrastructure investment is being strengthened by requiring ministries to have in place formal, independently verifiable infrastructure management systems. They need to develop key common performance measures across various types of infrastructure, to develop an annual corporate capital overview to facilitate planning and priority setting, also to ensure the best use of private-sector infrastructure, and to employ the best approaches to divesting or making alternative use of underutilized facilities. Mr. Speaker, I'd also like to reflect on how this government is caring for those Albertans who may not be in a position to care for themselves. I am announcing a budget increase of approximately 12 percent in '99-2000 for the assured income for the severely handicapped program. These additional dollars will help to raise clients' monthly benefits to $ 855 from $823 by October 1. Alberta Municipal Affairs will also spend $87. 5 million on housing programs and will work with other ministries to develop a new social housing policy. We will also provide an increase in funding to child and family services regional authorities, taking total spending in that area to $380 million. In addition, we are announcing two family literacy initiatives through Advanced Education and Career Development to help low-income families. So there you have it, Mr. Speaker: health, education, our children, and infrastructure, Albertans' priorities and our priorities. But to find the right balance, we know we can't spend beyond our means even in priority areas. That leads to deficits and debt, legacies Albertans have told us they do not want. Mr. Speaker, the federal Finance minister does not think that a legislated debt pay-down program can work. We think differently. For nine years the Alberta government spent more than it was taking in. Each year another deficit was added onto the accumulated debt of previous years, and by 1994 we had accumulated $22 billion of debt, money we had borrowed each year just to run the show. We knew that the assets of the Alberta heritage savings trust fund, our savings account, totaled $12 billion. We had other liabilities and assets that overall were worth about $2 billion to the province. Putting all of that against our accumulated debt, we could see we had $8.3 billion of debt that was not supported by any assets. We had debt without collateral. So, Mr. Speaker, we broke our debt into two accounts. That $8.3 billion became our net debt. We passed legislation that required us by law to use any annual surpluses to pay down the net debt. We gave ourselves a maximum of 25 years to do it. I can tell you that Budget '99 shows that sometime in the new year, the first year of the new century, we will make a final debt payment and our net debt will be zero. When the net debt hits zero, the law requiring its pay-down will be null and void. That means we would be in a dangerous position as politicians, salivating over a possible surplus with no law requiring us to apply it to the remaining debt. This is a precarious position. Debt makes a province vulnerable. In our recent Talk It Up; Talk It Out survey almost 80,000 Albertans told us that debt pay-down is still a priority. For that very reason the Premier recently tabled Bill 1, the Fiscal Responsibility Act. We are legislating a maximum mortgage period of 25 years on the remaining accumulated debt of over $13 billion. As we did with the net debt, we can accelerate that remaining pay-down if revenues grow more than expected. With this commitment financial freedom for our young generation and generations to come is in our sights. This bill also requires us to set aside 3 and a half percent of our overall budgeted revenues at the start of every year to protect ourselves from the volatile economic swings that our province is subject to. That 3 and a half percent cushion amounts to $617 million this year. The economic cushion will act like insurance against weakened revenues or public emergencies. So if the oil price plummets or the forests blaze like they did last summer, we will have the cash to cover it without going into deficit. If the cushion is not required for those types of purposes before the end of the year, 75 percent of it must be used to pay down debt. The remaining 25 percent may be used to accelerate capital infrastructure projects and other priorities. This could include a combination of spending directed to schools, health facilities, roads, waterworks, et cetera, Albertans' priorities. Mr. Speaker, we introduced this act because we recognize that staying the course will require more staying and less straying. Business plans are one of the foundations of Alberta's prudent fiscal management. This law puts the bite into planning and significantly tightens the ministries' three-year business plans as well as the three-year government plan. It has been said that a thousand regrets cannot cancel one debt. The only thing that cancels debt is cash, and this new law will ensure that the cash is there to pay down the remaining debt. To me striking the right balance means allocating spending where needed, being fiscally responsible and tackling the debt, and then, when it is affordable and sustainable, giving Albertans and their wallets a break. Taxes are a fact of life; actually, also a fact of death. Taxes are necessary for the provision of services. Nobody disputes that, but both the common and the academic wisdom of the day increasingly questions the burden of income tax that we all struggle with. Canadians pay more personal income taxes than any other G-7 nation, and evidence shows that as tax levels rise, incentive levels drop. In addition, we know that many young, innovative Canadians are leaving the Canadian shield because it is a shield no more. They're moving south to where the tax system allows them to keep more of what they work so hard to earn. This is a national heartbreak, especially sad because if governments had the will, they could find a way to fix the problem. In Alberta this government is not afraid to listen to its people. Our citizens have the will. They have pointed the way. We have listened, and we will follow. Through a variety of means we have surveyed and polled Albertans on this subject. Common themes have emerged. The recent Tax Review Committee took several months to drill down into the depths of the problem and survey the possibilities. Here are some of the key problem areas. Bracket creep, also known as the invisible tax, has been an insidious method of tax collection used by all Canadian governments. Through the simple process of inflation the salaries of working people get pushed into higher tax brackets, and they pay higher taxes. This erodes buying power and hits low-income citizens the hardest. As politicians we began to look around to see where the bracket creeps were, and we found them when we looked in the mirror. It was a case of creeps are us. The Tax Review Committee also reported that Albertans were frustrated with the flat tax and the surtax, the so-called temporary deficit elimination taxes of 1987. When these taxes were introduced to reduce the deficit, the deficit rose. When Premier Klein took over the reins of government, the deficit started to go down. When we finally eliminated the deficit in 1994-95, the taxes, however, stayed. So here in Alberta we have quite rightly been singing the triumphant songs of deficit deliverance, but when we get to the verse about deficit tax deliverance, we forget the words. Mr. Speaker, we also know that many families believe we need to level the playing field for how we tax one-income, which includes single-parent, and two-income families. The choice of whether one or two partners work outside the home should be a personal family choice. But the tax scales are tipped in favour of two-income families, making the choice more difficult for those who choose to live on one income. Finally, the Tax Review Committee said that we should rid ourselves of the cumbersome and burdensome effects of a multibracket system. They suggested that we break away from the federal tax rate structure as a means of setting our provincial rate and move to a single provincial tax rate on all income and at the same time allow for generous personal and spousal credits. We have always known that breaking our attachment to the federal rates would give us more flexibility and would make our provincial rate more transparent to our citizens, less prone to the whims of federal Finance ministers. From there we turned to Albertans to gather their views. In record numbers our citizens told us that they want tax breaks, but they urged us to find the right balance between taxes and protection for our priority areas of debt pay-down, health, and education. They have said that a tax plan should be comprehensive and long term, sustainable and affordable, not subject to annual whims or the timing of elections. Mr. Speaker, our MLAs have studied, laboured, discussed, drafted, and redrafted. We have analyzed numbers, we have computerized plans, we examined the Tax Review Committee report, and we examined many other suggestions for tax change. We have also faced the reality that this is the toughest of the last several years to even think about tax reductions. Even though we forecast growth for '99, it is the low point in many commodity prices which are crucial to Alberta. We knew we couldn't make everything happen all at once, but we also knew we had to move ahead. We had surveyed, studied, and struggled long enough, so we concentrated on the most important issues. Now, Mr. Speaker, with a promise to continue to review other areas of taxation such as the important issue of property taxation, this afternoon I am announcing a three-year income tax plan for the 21st century. This three-year plan will be triggered on a year-to-year basis if the revenue levels forecast in Budget '99 are realized. This means that our priority areas of spending will be met and that the demands of the Fiscal Responsibility Act will be satisfied. This also means that the timetable slows down if the triggers are not achieved. On the other hand, the tax plan could speed up if revenue significantly exceeds our current estimates and if as a government we feel we can afford to accelerate the plan. The plan laid out today is a prudent, manageable, three-year approach. As you know, we began reducing taxes last year, reducing our rate by 1.5 percentage points to 44 percent of federal tax. That move jump-started our current three-year plan that begins slowly but deliberately. For the budget year ahead we will match the federal increases in personal and spousal exemptions, meaning a tax cut of some $55 million. Mr. Speaker, this money will be left in the pockets of Albertans. Then in the very first year of the 21st century, next year, we begin the assault on the so- called deficit reduction taxes. On July 1, 2000, we will slash the 8 percent surtax in half and annihilate it entirely on July 1, 2001. After more than 13 years this tax will be gone forever. And finally, Mr. Speaker, we will chart a new and innovative course of tax reform, a groundbreaking course that will leave a legacy for future Albertans. Following negotiations with the federal government and allowing for the required notice period and preparation time, I am announcing today that year 3 of our plan, or year 2 if we choose to accelerate it, is the year we will officially unhook ourselves from a decades-old attachment to federal tax rates. That means that in year 3 of this plan, or year 2 if possible, we will blast away the remaining deficit reduction tax, the flat tax, and the entire current structure. This government will blaze a new trail across the taxation frontier, becoming the first to move to a simple single rate of tax on income and the first to end the invisible penalty of tax bracket erosion through inflation. A liberating moment that will be for Albertans. Governments have been reluctant to move to this superior and liberating form of taxation because of accusations that it helps middle- and upper-income earners and hurts the low-income earner. Mr. Speaker, this government believes low-income earners are paying too much tax. Today I announce that when we as a government move to tax on income, we will establish one simple rate of 11 percent, but at the same time we will raise the basic exemption levels. That means we will substantially raise the amount of money a person can earn before being taxed. By 2002 the basic exemption level will be raised 60 percent, from $7,100 to $11,620, setting an additional 78,000 low-income Alberta workers free from the tax man's grip. But that's not all. At the same, we will increase the spousal exemption by 90 percent to $11,620, leveling the playing field for one-income families and bringing relief to families who make that choice. These moves spell relief for all Alberta workers, no matter what their income is. When this plan is fully implemented, all Albertans at all levels will pay less in taxes. Just as I cannot and will not apologize for saving low-income earners tax dollars, I will not apologize for the dollars that will be saved by middle- to high-income earners. By the final year of the plan a single- income family with two children and earning $30,000 will save $1,775, Mr. Speaker, and a single-income family earning $75,000 will save $1,666. That's what I call fairness. Some of the reasons why I feel so strongly about the importance of Alberta's tax plan are found in the members' gallery this afternoon. Darin and Leanne, a teacher and a nurse, have just managed to purchase a home and are preparing for a family. Should they not have their burden lifted a little as they prepare for the challenges of the 21st century? Many governments are paralyzed at the thought of allowing young, hardworking families like these their tax benefits, but this government knows that Darin and Leanne value this tax break even more than they might value a pay hike. Why, Mr. Speaker? Because approximately 40 percent of any pay raise gets taxed away, but 100 percent of a tax cut stays right in your pocket. So we say to thousands of couples like Darin and Leanne: enjoy the rewards of your education and labour, and allow us to congratulate you on your brighter future. When I think of Joe and Jenny, also in the members' gallery, I think of seven other reasons why this tax plan is important. Joe and Jenny frequently ask me when they are going to get a break. They explain that with five children to care for, they take family responsibilities seriously. They are happy their taxes go to help those less fortunate, but they're weary from the load they carry. By raising the spousal exemption, they get relief and an acknowledgment that taxes should be a little more friendly to the one-income family. Mr. Speaker, my colleagues and I would like to thank Joe and Jenny and thousands like them for strengthening the fabric of this province. I am happy to see Jennifer and Joshua here today. Jennifer is a single mom who took time off from her day care job to join us here today. When this plan is implemented, thousands of single parents will no longer pay a single penny in provincial income taxes. Mr. Speaker, this government recognizes the contribution that Jennifer and Joshua and other families like them make to this province. We are proud of their spirit, and we know that lifting this burden will improve their quality of life. Jennifer, we applaud you for all you do. Mr. Speaker, Budget '99 is the right balance. Our social spending shows without question that health, education, and people services will be protected because of how we manage our finances. Budget '99 also shows that we have protected future generations from inheriting a legacy of debt and despair. Finally, Mr. Speaker, Budget '99 shows what I believe to be true compassion for our working people, the citizens who every day go out to work in a world of challenge and opportunity. It's their money, and it's our promise that the only way taxes will go in this province is down. Mr. Speaker, in 1881 Canada's fourth Governor General, the Marquis of Lorne, was sent by Her Majesty Queen Victoria to the north-west district, which is today our province. He did not travel here alone. During his tenure of office with the Queen he had the good fortune of meeting and falling in love with the Queen's daughter. They married and traveled together to this wonderful land. When the Marquis first saw this territory, he fell in love with the land just as he had fallen in love with his princess, so much so, in fact, that he named the land after her. Her name was Princess Louise Caroline Alberta. The Marquis' words, inscribed in stone in our rotunda here in this building, Mr. Speaker, declared: the name was born out of love for a country and a woman. At noon on September 1, 1905, the territory joined the Confederation of Canada and was officially proclaimed the province of Alberta. Now, Mr. Speaker, as we move through the final months of the 20th century, the government business plans, as dry and boring as numbers may be, reflect the same love and compassion for Alberta that was there at its founding. The people and the land of beautiful Alberta are poised for greatness in the century ahead. Good afternoon, Mr. Speaker.