Province Législature Session Type de discours Date du discours Locuteur Fonction du locuteur Parti politique Manitoba 29e 3e Discours sur le Budget 13 mai 1971 Saul Cherniack Ministre des Finances New Democratic Party of Manitoba Mr. Speaker, the Province of Manitoba has entered its second year of participation in the Confederation of Canada. Yet, as the 70's begin, this is still confronted with major defects in our economic and social system. The failure present policies are revealed in the mass unemployment of workers, the desperate plight of primary producers as our farmers and fishermen, the hardships endured by the neglected, the squalor of the slums, and the pollution of the environment. In acute form, it is scored by our inability to provide meaningful opportunities for our youth. Before outlining the intentions of this government for 1971-72, I want to review some philosophical considerations that underly the development of programs and policies is social democratic government. It is a goal of this government to direct Manitoba's economy towards the needs of all of people, rather than those few who possess power because of their wealth or influence. We are committed to win the fight to root out inequity, and to achieve a humane society that is, through the democratic process, to the actual needs of all of our citizens. The Government of Manitoba firmly believes that society's first obligation is to alleviate condition of the millions - yes, literally the millions - of Canadians who are now living in conditions of economic, social, and cultural misery. The policies of the old-line parties have I that when in office, they are the spokesmen of the privileged and the elite. The results policies are all too obvious in the inexcusable disparities in income, education, housing, and social development throughout this land. The results have also meant the existence too many alienated groups in Canada; the native people, the pensioners, the rural poor, urban poor, and perhaps the most tragic group of all, young people, students and dropouts, who are completely dissatisfied and disillusioned with the economic and social order, are frustrated by the refusal of governments to reorder their priorities. The essence of this social democratic government is to promote the equality of the condition. This objective, to seek greater equality for all Manitobans, is the common of all this government's policies. It is evident (and I will elaborate on this later, in redirected health and social development programs; in our revitalized goals for rural and development; in our new agricultural projects; in our emphasis on public housing construction; in our urban reorganization plans directed to equalization; and, of course, in reformed taxation policies based, as much as possible, on "ability to pay". In order to achieve needed reforms, a pattern of nationwide economic and social criteria replace the narrow tests of individual profitability that now guide most of our public. For many years, social philosophers have been warning us that society faces a famine of private goods and a famine of public goods. The truth of these warnings is self-evident. While our stores are jammed with every kind of electrical gadget and toy, governments the old-line parties attempt to place arbitrary limits and ceilings on the great social programs such as medicare, hospitalization and education. Even where the gross national increases each year, we are told that there are not sufficient funds for policies and programs aimed at eliminating regional disparities and for bettering the condition of the one one-quarter of all Canadians who presently exist on poverty incomes. We are living in a system in Canada that has led to an absurd imbalance. We are lavish production of things that add little to the welfare of all Canadians - such as competing, yearly car model changes, three supermarkets in the same shopping centre, three or is stations at the same intersection, extravagant advertising expenditures that sell but inform, and general built-in obsolescence. At the same time, we skimp on all goods and services that are provided collectively; that is, on schools for education, hospitals for health, urban renewal projects, pollution control, low cost housing and all forms of social services. This government rejects this chaotic condition and is prepared to work for the development of a system in Manitoba, responsive to the public needs and concerned with overall public social and economic objectives. Naturally, in a confederal arrangement, the efforts and resources of one provincial government are restricted and we can't always achieve, immediately, as much as we would like to achieve. However, we shall at least shape the direction of our objectives and attempt to accomplish them step by step. Let me be clear regarding the technical apparatus the Manitoba Government intends to employ in developing a more equitable society. This government accepts the advantages of a mixed economy. We do not advocate the wholesale substitution of public for private ownership, though, as in auto insurance, we shall continue to advocate public ownership by the people of this province where necessary and desirable. The crux of things is that there are areas of desirable economic and social activity where the criteria of private profit alone are not sufficient: to determine progress. Given the present economic system, this does not mean that the private sector should be faulted for its criteria of profitability. However, response to unmet social and economic needs requires the development of co-ordinated planning that will involve the people themselves. Such planning cannot be achieved through private, uncoordinated activity. This government believes that government must be activist, an initiator of events, at times an initiator of enterprise as well, and not merely a passive last recourse in failing circumstances. An excellent example of the lack of public planning by successive federal governments is the steady erosion of our national economic independence. No other country in the Western world has allowed so much of its natural resources, of the ownership of its industry, and of the decision-making power of its economy to fall into foreign hands as Canada has done. We ' should not blame the Americans, the Japanese or the British for gradually taking over our firms and industries. One can't help but observe that governments have quietly acquiesced in the lack of planning, control, and knowledge that has determined the foreign domination of our economy. As a still better example, there is the current illustration of policies not concerned with planning and equity, namely the massive and socially destructive unemployment crisis deliberately created by the Liberal Government in Ottawa. It is of little satisfaction, to me, to point out that this government predicted a year ago in precisely the consequences that would follow from the policies that the federal authorities stubbornly imposed upon the national economy. To predict a disaster is not to avert a dIsas1 only now does it seem that the truth of the prediction is being understood. Two ex-cabinet ministers of the federal government have denounced federal policy in terms even harsher the anything this government has said. This past winter, Canada experienced the largest levels of unemployment in a decade, with unemployment figures registering far over two-thirds of a million people, numbers that when translated in terms of family support meant that anywhere from one to two million Canadians were immediately affected by the federal government's destructive economic policy It is the poorest, weakest and the most alienated in our society who have borne the brunt of these calamitous events. There should be only one policy by the government of Canada that is acceptable to Canadians, and that is a commitment to full employment, as it is defined with unemployment not more than the 3 percent level recommended by the Economic Council of Canada. The disaster that has been brought upon us by the abandonment of full employment as an over-riding goal, has already shown what heavy unemployment does to individuals and communities alike, The waste of goods, the pointless hardship - these things have been visible again this winter as they have not been visible for many years. The Government of Manitoba calls upon Ottawa to remember its promises of a quarter century back, clearly articulated in the 1945 White Paper on Employment and Income, when Canada was assured that the elementary lesson had been learned that full employment must be a foundation for a decent and humane society. While recognizing the need to control inflation and rising prices, last June at the Ministers' of Finance meeting here in Winnipeg, I suggested alternative federal policies that co~ be developed. The present policy of deliberately creating mass unemployment must be rejected and emphatically. Clearly, the efforts of the Government of Manitoba to give full dimension to our policies been restricted by the federal government's war on inflation - in the form of unemployment for many of our citizens and limited federal support for public programs. The Budget Address that I present to you tonight spells out in specific terms the intentions J.B government for 1971-72. The usual practice of tabling an economic review will be corrected, and accordingly, I have made copies available for distribution to Honourable Members. Budget and the Economic Review have been framed in the context of economic circumstance which, despite the damage inflicted by federal government policies, shows some sign. The Government of Manitoba made explicit provision for the looming crisis in employment long ago as the Spring Legislative Session of last year. At that time, special "genera" authority was established as a capital reserve to fight unemployment. Thus, when the obvious that the federal government was not prepared to act, despite the urgings of concerned citizens, the Manitoba Government took action to stimulate economic in the province and the capital program was immediately utilized. In a series of policy statements by the Premier, the time-table of provincial capital works of housing, principal works, and of various lesser items were quickly accelerated. We would not sit idly by waiting for the federal government to correct the consequences in economic policies while the jobless figures continued to mount. Naturally, any programs government's ability to remedy massive unemployment is circumscribed by the openness provincial economy and the limited range of its fiscal and monetary powers. In a rational full employment would be the assumed result of policy at the federal level, for this is the powerful instruments of control exist. Nevertheless, the province has done and will be due to do what it can to overcome Ottawa's dereliction. A very rough estimate of the cost to the national economy of the federal crusade against on has been approximated at $4 billion a year by the Chairman of the Economic Council. We estimate the corresponding cost to the Manitoba economy, was about $150 in a year. The human counterpart is found in the hundreds of thousands of Canadian ns who have lost their jobs and whose families have been so often exposed to hardships re no fault of theirs. It has been expressed in financial terms in the crisis of escalating costs that provincial and municipal governments have faced. If the federal government continues to ignore or dismiss the situation and accepts the employment levels which ranged from 5% to 6% throughout this year, it will compound its errors. Manitoba, as a result of this government's early and decisive response to alleviate employment significantly cut the unemployment which had been forecast for the province period 1970-71. Let me just mention here, Mr. Speaker, that the current statistics on unemployment led this morning, reflect the seriousness of the situation. As my colleague, the Minister our reported to this House this afternoon, the seasonally adjusted national unemployment dumped from 6% to 6.7% of the labour force, and actual unemployment in fact rose by persons, from 650 thousand to 659 thousand, in a month when it should have fallen for many reasons by 60 thousand or more. In Manitoba, against this dismal federal background, addition actually improved for the third month in a row. Unemployment fell from 20 to 18 thousand, or in percentage terms, from 5.4% to 4.8%. The fact is that rational policies at the provincial level have caused this notable difference in performance. Together with all other provinces, we are dependent on the overall approach toward and fiscal matters exercised by the federal government. The federal Summer Budget announces decisive action to combat unemployment. To do otherwise would be to risk the r of further injuring the economy as well as sacrificing the future of a multitude of community and human development The Government of Manitoba has taken as a special mandate the responsibility to hardships experienced by the sick, the aged, the needy, by all those who are disadvantaged and alienated from our society. We consider that one of our major tasks is to clarify and articulate the problems that the disadvantaged face, so that coherent solutions can be found; solutions that are properly proportioned to the scale of the problems and that are technically efficient in form. It is our hope that through our programs and policies it will be possible eventually, for every Manitoban to be assured of the services that are essential to his or her well-being. We believe that the social policy of the federal government's, as indicated in its White Paper on Income Security, is completely inadequate. Existing piecemeal social development programs should be transformed into an integrated income security system. The implementation of an adequate guaranteed income scheme should be carefully considered. Such action would establish once and for all satisfactory minimum income standards as a right for all Canadians. In regard to existing social development services in Manitoba, legislation was passed at the last Session lowering eligibility criteria so that provincial assistance would be available for more needy persons and families. More recently, Manitoba was one of only two provinces which passed on directly and in full, the benefits accrued by recent increases for old-age pensioners with guaranteed income supplements. As a result of these actions and the more responsive policies of this government taken together with the more flexible administrative attitudes of the Department of Health and Social Development, more people in need are getting help faster. I am informed that the Department of Health and Social Development has adopted a planning approach to its operations and has conducted several basic research studies into important health and social service areas. The first major attempt in Manitoba to rationalize the overall health and social services for a key segment of the province's population is implicit in the study now underway by the Department to determine the needs of our elderly citizens. Other priorities are being responded to: programs to protect and to salvage the environment are being expanded; new techniques for teaching and learning, to make education accessible for all, are being investigated; our legal system is being reviewed so that it may more adequately reflect compassion in the provision of justice; many more methods of informing, educating, and directly protecting consumers more fully are being considered. As announced in the Throne Speech, the government intends to provide the funds for new and expanded programs at all levels for Manitobans of native ancestry. The list goes on and on. HOUSING: There can be no doubt that the lack of adequate public housing for Canadians should be an urgent government priority - particularly in view of the dire state of the economy. Certainly, the situation presented a clear opportunity for the federal government to ameliorate the unfortunate consequences for the unemployed. However, instead of taking any positive action in its December Budget, the federal government provided only a very small increase to the Central Mortgage and Housing Corporation's budget. This federal increase amounting to $40 million was less than the estimated initial expenditures of $55 million planned by the Government of Manitoba for a major provincial public housing program in 1971. Although cutbacks were necessary from our original plans, due to the refusal of funds available from C. M. H. C., the Government of Manitoba has gone ahead with a massive public housing plan for 1971. It will amount to estimated expenditures of $33 million, by far the largest in the history of this province. In percentage terms, this represents an increase of 154% from 1970, when estimated expenditures for public housing amounted to $13 million. The number of housing units represented by this commitment in 1971, is in excess of 2,200, an increase of 107% from 1970, when 1,065 units were built, and an increase of almost 1,000% from 1969, when 201 units were constructed. In total for 1971, the Manitoba Government has committed an estimated $63 million in regard to housing or projects associated with housing. REGIONAL DEVELOPMENT: There are other commitments that the Government of Manitoba believes are of the utmost importance such as supporting the aspirations of the regions within the province. In regard to the North, the Northern Task Force, a special committee of the Legislature has made progress towards meeting its objective of developing a process to find workable solutions to northern problems within a planned-approach and strategy. A joint announcement in April by the Premier and the Minister of Mines, Resources and Environmental Management together with the President and Vice-President of Sherritt Gordon Mines Limited confirmed that a new town-site for about 3, 500 people is to be developed near Sherritt Gordon's Ruttan Lake mining properties under arrangements without precedent in Canada. Previously, such town-sites have operated under agreements by which the mining companies were to provide certain community assets in return for special local tax concessions. Under the arrangement for the new town-site, the assessable surface property of Sherritt Gordon will be placed on the local tax roll for all taxation purposes. The new town-site will be located near Leaf Rapids on the Churchill River. Under our five-year agreement with the Federal Department of Regional Economic Expansion, the government began last year to locate infrastructure in and around The Pas which will help it to develop as an urban-transitional centre. We anticipate more negotiations with DREE regarding the provision of basic infrastructure in other key regional centres throughout Manitoba. In the Interlake area, the plan based on the Fund for Rural Economic Development FRED - continues to show progress. The original Agricultural Redevelopment Act Agreement ARDA - expired in 1970 but projects initiated under that Agreement are being carried forward to completion in the present fiscal year. A new five-year ARDA Agreement is under negotiation, as is a special agreement for projects in remote areas. The Government of Manitoba has stressed the importance of achieving balanced regional development in the province and the need to evolve selective actions within a comprehensive plan. We want to promote the development of more secondary and processing industries in Manitoba related to the province's supply of natural resources so that our citizens may benefit from the exploration of our resource wealth. AGRICULTURE AND FISHERIES: In the field of agriculture and fisheries the Government of Manitoba has challenged the recent federal approach to those of our people who choose to live in agricultural areas, and the federal emphasis on the need to move farmers out of farming. The Manitoba Minister of Agriculture has expressed repeatedly our dissatisfaction with current federal agricultural policies. Economic conditions on Manitoba farms became so depressed last year that our Minister approached the federal government with an offer to jointly make immediate cash payments to farmers. The federal government refused to participate in this joint action, and the farm problem became even more acute. The Government of Manitoba felt morally obligated to undertake a program of its own to help ameliorate the existing situation, and to remind the federal government of their obligation to the farmer. So we have provided cash payments to Manitoba farmers amounting to one dollar per acre up to 100 acres per farm for which legislation was passed authorizing provincial expenditures up to $4 million this year. In no way should this program be considered of a continuing nature, and although it does not adequately meet the long-range needs of the farm community, it does provide help in easing the current low cash income position of Manitoba's farmers. The Government of Manitoba has been particularly concerned about the plight of unemployed fishermen in the province whose livelihood was abruptly halted by the discovery of mercury pollution in many Manitoba lakes. Last December, the Premier announced a series of winter projects to provide jobs worth $380 thousand, for the fishermen and those involved in shore operations in the Cedar Lake-Lake Winnipeg area, who were unable to engage in their usual occupations because of the fisheries pollution problem. Funds for this program were provided on an equal basis by the provincial and federal authorities with a total value equal to the approximate net dollar value of the last normal fishing season on the affected lakes. This program was considered a very high priority by the Government of Manitoba. We will continue to press for additional programs and for more adequate long-term compensation for the fishermen. LOCAL GOVERNMENT - EQUALIZATION/PARTICIPATION: The Manitoba Government is intensely aware of urban need in a province characterized by its single major metropolitan centre and has committed itself to a meaningful and effective provincial-municipal partnership. This partnership is implicit in our proposals for the urban reorganization of the Greater Winnipeg area. It also underscores our conviction that the federal government must participate fully if the modern urban challenge is to be met adequately. The equity sought in these partnerships is dependent initially on fiscal equity. Accordingly, the Government of Manitoba has proposed the unification of the tax bases presently available to local governments in the Greater Winnipeg area. Through the unified tax base, disparities in property tax burdens that result from unequal distribution of tax resources and responsibilities should be eliminated. Under the new regional government property tax rates in the Greater Winnipeg area will be fully equalized for general municipal purposes and substantially equalized for educational purposes. The Government of Manitoba firmly believes that the proposed establishment of community committees is fundamental to local government reorganization in the Greater Winnipeg area. These committees will provide citizens a direct contact with elected representatives on a better balance to population, and will ensure to residents the opportunity to participate in reaching decisions about plans for their community. We recognize that the community committees concept will only be effective if the people and their elected representatives work at the task. Surely, this is the basic criterion for achieving success in any responsible government. I'd like now to deal with Federal-Provincial Relations. COST-SHARING PROGRAMS: As I reported to this Assembly on the occasion of my last Budget Address, the major joint programs have become the object of intensive analysis and negotiation in recent years. There has been general agreement among all governments that measures must be implemented to ensure adequate control over the expenditures of public monies involved in many of these programs. However, on the question of the ways and means of affecting these controls, and on the basic rationale for the controls themselves, the positions of the Government of Manitoba and the Government of Canada have diverged significantly. In mid-197O, as I informed the House during our last Session, attempts were made by the federal government to obtain agreement among the provinces for the imposition of arbitrary percentage ceilings on shared expenditures in the coming year. Honourable Members may recall that, on the occasion of the Ministers of Finance meeting here in Winnipeg last June, I reported that Manitoba had rejected these federal "guidelines" proposals on the grounds that the application of simplistic and rigid arithmetic rules in areas of such vital importance to the citizens of this province constituted an outright denial of the responsibilities of both governments to reduce disparities in fundamental social services. At the same meeting, Manitoba repeated our Premier's earlier proposal for priority option grants and the government's desire to establish practicable controls - through program rationalization and similar means - in close cooperation with the federal authorities and other provincial governments. This government argued at that time, and continues to hold the position - a position which in fact has been borne out in every major federal-provincial joint program cost study - that many of the root causes of rapid cost increases can be traced to manageable factors within the service fields themselves, and that solutions to these problems can be achieved through careful study and joint action. Regrettably, the Government of Canada has continued to direct its attention to arbitrary rules for limiting its financial and program commitments in the vital health, social development and post-secondary education fields. New sharing proposals put forward by the federal government in respect of the Hospital Insurance program, Medicare and the Post-Secondary Educational program, lead me to believe that little consideration has been given to the different service requirements of the citizens of this country. Within the next few months we expect to be presented with similar proposals for revisions to the Canada Assistance Plan financing arrangements. The extent and levels of health services, of social development services, and postsecondary education services for at least a decade ahead will be determined in the very near future. It is to be hoped that in the negotiations process, federal government will recognize the vital importance of the decisions which are to be reached. It is further to be hoped that these decisions will reflect for the first time a truly table distribution of the resources of this country and will offset the tendencies to balkanization that delayed reforms will encourage. TAXATION: In the field of taxation, the Government of Manitoba is gravely concerned about the federal government's present position on tax reform in Canada. Tax reform is of major parlance to every Canadian, and is basic to federal-provincial relations given the fact that two levels of government share the same tax base. In light of statements made in the last few months by the federal Minister of Finance, it is increasingly probable that the federal government will introduce tax legislation which mean a continuation of an inequitable, regressive, and inefficient tax system in Canada, system in which special privileges will be perpetuated. In late March, when it became apparent that the federal Minister of Finance could not range a meeting with these provincial counterparts before the draft tax reform bill was introduced in Parliament, I felt compelled to make public a letter to the federal Minister of Finance. It letter reiterated this government's view that the final tax reform package may continue of the regressive and discriminatory features of the existing legislation. We have this letter was particularly prompted by recent federal declarations from which I infer , t the concept of equity among taxpayers, as well as the fundamental need to relieve the tax burden on all low income groups, have been abandoned by the federal government in the intents of what has been called "economic growth". The practical side of this principle of economic growth", simply means providing special tax concessions to the corporate elite to wealthy individuals. A copy of my letter is appended to this Address. The Government of Manitoba observes that in determining equity and economic growth, these variables are affected by the system; there is no necessary sacrifice of one thing or the other. The variables are independent and are linked only when policy issues have been logically framed. Accordingly, we forwarded to the federal Minister a list of our major tax commendations in order to achieve both equity and a sensible pattern of growth. These are: (1) The new income tax legislation should be based on tax credits instead of tax exemptions. Since exemptions provide greater benefits to those in higher incomes, a system of tax credits, with attention to marital status, to dependents, to day-care services, would be more equitable. (2) A comprehensive income concept should be adopted with all forms of income to be included and to be subjected to a graduated scale of income tax based on the ability to pay. (3) Capital gains should be taxed at full rates in the same way as salaries and wages and other forms of income, with exemptions and particular arrangements to prevent undue hardship for the family farm and the homeowner. (4) Strict limits should be placed on corporation capital cost allowances, advertising, entertainment and convention expenses. (5) There should be adequate assurances of sharing revenue increases with provincial governments, with estate and corporation taxation levied and administered across the country by the federal government. (6) The same treatment for employment expenses should be allowed for wage and salary earners as is now allowed for the self-employed. (7) Natural resource industries should be taxed on the same basis as other industries, and (8) There should be a continuation of progressive top rates in the income tax schedule which would enable the lowering of rates at the bottom of the scale. This government reminds the federal government of the wise words of the Royal Commission on Taxation (the Carter Commission) which stated: a social and political system to be strong and enduring when a people become convinced that its tax structure does not, tribute the tax burden fairly among all citizens". The federal tax reform legislation is expected shortly and, I can assure every Manitoban that despite the crucial time constraints imposed by the federal government, the legislation will be minutely examined by this government. With the results of that analysis at hand, we will press the federal government for those changes in the legislation essential to promote fairness and equity in income taxation for all Canadians. We hope to be able to present to this Assembly - before the end of this year - amendments to the Manitoba Income Tax Act which will reflect these changes. FISCAL ARRANGEMENTS: Related to the taxation decisions to be made by the Government of Canada will be the revision of federal-provincial fiscal arrangements that will have effect for the five-year period beginning April 1, 1972. As Honourable Members are aware, the present Fiscal Arrangements legislation, which expires at the end of the current year, provides authority for the tax collection agreements, estate tax sharing, the equalization formula, and revenue stabilization guarantees. I have already outlined the present situation as it relates to tax reform as well as the negotiations now under way on the future financing of higher education, but the other facets of the fiscal arrangements have also been under close scrutiny. Several proposals have been put forward with respect to the equalization formula, including important technical modifications intended to reflect changing patterns of provincial taxation. Suggestions for incorporating municipal revenues and a measure of provincial municipal "tax effort" in the equalization formula are also under consideration as is a broader "total income" basis for distributing equalization payments. A highly significant feature of the new fiscal arrangements will be the revenue guarantee system which is to accompany the amended income tax legislation and tax collection agreements. Any revenue short-falls which the Government of Manitoba may experience as a result of anticipated changes in federal income tax rates must be fully offset by guaranteed payments if the province is to be able to fulfill its expenditure commitments without altering its own income tax rate structure. As yet, we have not been provided with sufficient information by the Government of Canada to assess the adequacy of the proposed guarantee arrangements in respect of both amount and duration. The failure of the federal government to communicate full details of its intentions to us, and the resulting uncertainty as to our income tax revenue position after the end of the current fiscal year has hindered our planning process considerably. Because there is concern about the adequacy of the revenue stabilization provisions in the present Fiscal Arrangements Act in times of crisis, certain suggestions have been made for incorporating short-term stabilization provisions in the 1972-1977 Fiscal Arrangements legislation. It is to be hoped that the federal government will respond to these suggestions positively. Clearly, however, all these technical and administrative questions related to the Fiscal Arrangements are but manifestations of a fundamental problem confronting the senior levels of government in Canada at this time - the urgent need for a more equitable redistribution of the tax resources of this nation. The pattern of economic and social relationships that has developed in Canada - and in all other industrialized communities - has greatly extended the responsibilities of the public sector, and within the public sector has extended the relative importance of provincial and local responsibilities. The provinces have ever greater obligations to discharge. The fulfilment of these obligations can only be ensured through drastic reform of the financial relationships among governments. In simplest terms, the provinces including Manitoba - require proportionately more tax money than in the past because they have proportionately more to do - both within their own jurisdictions and in the areas of responsibility they have chosen to entrust to local governments. What is at issue is this structural fact which should not be a matter for petty bargaining between competing political jurisdictions. Unless some rational method is found for transferring national revenues from Ottawa to the provinces, there will be increasing frustration and waste in wide areas of social policy. Canada as a whole will be worse off; many Canadians will be poorer, and the fabric of the nation will be further trained. REVENUES AND EXPENDITURES 1970-71: Let me turn now more directly to our province's financial affairs. In the year just closed as of March 31, 1971, our total expenditures on current account approximated $458.5 million. Our normal revenues have totalled $459.1 million which would have left us with an excess of revenue over current account expenditures of approximately $600,000. However, by reason in part at least, of Manitoba's strong representations to the .federal government all provinces have received a one month's speed-up in the payment by Ottawa to us of those taxes collected by the federal Department of National Revenue acting as tax collection agent for the province. This brought us in an unusual and clearly non-recurring month’s payment of $12,600,000. In addition, we received an unexpected $6.7 million way of an equalization payment adjustment for the year 1968-69. Both these amounts were received shortly before the year end, and as you will notice from our new revenue estimates ,r 1971-72, these two amounts have been carried forward for the year just beginning. This is not a new precedent. A review of former years' budgets reveals that past government's have opted from time to time to bring forward from one year to the next, excess if revenues over expenditures from the previous years. FINANCING - CURRENT AND CAPITAL ACCOUNT 1971-72: You will recall in my first Budget Address on September 18, 1969, I announced that effective November, 1969, the basis of financing medicare would be altered to reflect the ability-to-pay principle. Accordingly, monthly medicare insurance premiums were reduced $9.80 for a family to $1.10, and from $4.90 for a single person to $.55. The major part of the financing of the medicare program was shifted to the progressive income tax and the provincial income tax rate was increased effective January I, 1970, to provide the necessary revenues. It has been shown that this shift resulted in a real financial advantage for any single taxpayer with a yearly income of less than $6,363, and for an average taxpayer with an annual income of less than $11,348.00. The Manitoba Government is keenly aware of the inequity of the real property tax. In current estimates we have removed nearly $12 million of educational costs from Manitoba property taxpayers in 1971. These programs will rise to approximately $20 million in the following year. This substantial property tax decrease, I am pleased to announce, will be without any effective tax increase in 1971. Provincial support for the Education Foundation Program will be increased in 1971 in elementary school divisions and remote school districts. Legislation has been enacted this Session provide the following: ~. (1) An increase in the provincial share of the Foundation Program from a 70% - 30% to - 25% formula. (2) An increase in the exemption on farm and residential property which will have the act of reducing the rate required on farm and residential property for purposes of the taxation Program by 1.5 mills down to 8. 4 millions. The 33.9 millions on "other" assessment be unchanged. It is the intention of the government to finance this additional responsibility in respect education from general revenues. The monies necessary to finance the decrease in the property tax burden, otherwise payable in the current year, will be provided through adjust monies received in Manitoba's equalization entitlement from the federal government, in part, from monies provided from the one month "speed-up" in the remittance of tax elections and from careful fiscal management by the Government of Manitoba. If provincial increases are required in regard to this program in the future, they will be considered in context of all governmental programs financed through general revenues and in relation to policy as a whole. Naturally, the assessment of future provincial taxation policies will to be directly related to the yet unknown position the federal government will take into tax reform legislation. This is the critical variable missing from all provincial calculations. You will realize that the Budget I am presenting tonight, particularly in view of the economic circumstances, is again an expansionary one. Our estimates of expenditures on Joint account come to $516,850,800. The revenue estimates, on the other hand, total $ 132,730, leaving a small excess of revenues over expenditures amounting to $281,930. requirements for new investments will approximate $250 million. This, plus amounts that we estimate we may need for the paying off of maturing debt issues and savings bond redemptions, will involve us in borrowing something like $300 million over and above our ordinary revenues. The breakdown is as follows: (a) For our utilities and other agencies some of whose monies the province provides directly and the balance of whose requirements is found by the issue of debt guaranteed by the province: Manitoba Hydro $113.5 million Manitoba Telephones 20.5 million Agricultural Credit Corporation 15.0 million Manitoba Development Corporation 25.0 million Manitoba Housing and Renewal Corporation 63.0 million Manitoba School Capital Financing Authority' 20.0 million (b) For other general requirements of the government, including monies for our direct purposes such as buildings, highways, parks, schools and universities, we are asking for authority to spend some $38.5 million. This includes more than $3 million to start our Churchill town-site redevelopment and the new town-site development for Ruttan Lake (at Leaf Rapids). In addition, we are expecting to have to provide for upwards of $8 million of redemptions for general purpose debt of the province. These demands for capital will be met, as usual, in part from funds available from the Canada Pension Plan, and from the Central Mortgage and housing Corporation which in total will provide approximately $100 million. With capital borrowing already completed for Manitoba Hydro in the amount of $43 million since the first of April, 1971, and with such other funds as may be available from time to time during the year, we expect to require something in the order of $150 million from the public investment market. As I have already stated, this is a planned expansionary Budget. The total we and our agencies will be spending for the improvement of the living conditions in Manitoba and the economic development of the province will be almost $770 million. The similar total for last year was approximately $650 million. One notices that many of our sister provinces are also undertaking what people could refer to as cash deficit financing. Actually, over the past many years, the Province of Manitoba bas been financing its cash deficits all along, including of course, the requirements of the utilities and other agencies, by its annual borrowings. Our government intends to expand the economic and social base of this province by a vigorous program of expenditure designed for the betterment of the condition of all our citizens. The programs we are proposing will both increase the well-being of people within the province and will result in growing current revenues as years go by. ACCOUNT REVIEW: I would like to make reference to another subject which I regard as most important and that is the form of our annual presentation of the forecasts of the government's financial transactions. For many years the provincial budget has been brought down in the form which has become very familiar to us. In the meantime in addition to the familiar form, the federal government and a few of the other provinces, are presenting their financial transaction forecasting, on what is termed, "A National Accounts" basis. The "National Accounts" system of presentation which has now been used by Canada for the past 6 years, is a system designed to provide more information concerning the impact of activity in the government sector on the total economy of the province. It is hoped that by next year our studies which we propose to carry on extensively this summer will enable us to provide this additional insight into the government's expenditure and revenue plans giving us further tools to help evaluate the results of our programs. CONCLUSION: Mr. Speaker, I have presented to you tonight a deliberately planned and a carefully considered expansionary Budget designed to provide increased employment in the province. Because of the initiative shown by the Government of Manitoba, our provincial economy has shown encouraging signs of vigour, even through the crisis-ridden period just past. Through this Budget, we have been able to expand our program commitments and to assume new responsibilities while at the same time providing a tax decrease for Manitoba's property taxpayers. This Budget is characterized by the absence of any tax increases. We believe that the rationalization of our accounting presentation in this Budget Review and the planned deficit to be budgeted on capital account are in complete accord with the best interests of our citizens and our province. Our future taxation policy is, of course, highly dependent on the forthcoming federal statement regarding income tax reform. Together with all provincial governments and concerned Canadians, we await this announcement, as well as a declaration by the federal government of its intention to achieve full employment, and to correct deep-rooted regional economic disparities in Canada. We believe the federal government's first priority, is of necessity, to establish a clear and positive commitment to eliminate the rampant unemployment that exists in this country. This action is of the utmost urgency for it is this issue that hurts our people the most in terms of human anguish and suffering. The philosophy of government from which this present budget evolved maintains that meeting the social needs of the individual, family, community and society should be the objectives of government policy, meeting the needs and meeting them equitably. With this we also affirm that planned economic growth can and will be accompanied by the promotion of equity. Our encouragement of social development and of economic development is complementary, rather than competitive goals. We believe that this intention, coupled with comprehensive planning to promote balanced development, is the most effective contribution we as a government can make to Manitoba and to Manitobans. Our future prosperity in both the human and material sense depends on the ability of each of us to accept a degree of responsibility for all of us. Therefore, Mr. Speaker, I beg to move, seconded by the Honourable the Minister of Labour, Mr. Speaker do now leave the Chair and the House resolve itself into a committee to consider of the Ways and Means for rising of the Supply to be granted to Her Majesty. Mr. Speaker, I have a message from His Honour the Lieutenant Governor. I move, seconded by the Honourable the Attorney-General that the said message, together with the estimates accompanying the same, be referred to the Committee of Supply.