Province	Législature	Session	Type de discours	Date du discours	Locuteur	Fonction du locuteur	Parti politique
Manitoba	35e	4e	Discours sur le Budget	6 avril 1993	Clayton Manness	Ministre des Finances	Progressive Conservative Party of Manitoba


Mr. Speaker, I am honoured to present our government's sixth budget to the Legislative Assembly and the people of Manitoba.

On the road to building Manitoba, our early pioneers encountered and overcame many obstacles. In the process, they created a quality of life that is unsurpassed anywhere in the world.

In the months and years ahead, the challenge for all Manitobans is to protect and preserve this quality of life, by pulling together and having the courage to make some sacrifices today for a better life tomorrow.

We are faced with significant challenges that are very different and much more complex than those faced by earlier generations.

Make no mistake about it. These challenges present a threat so clear and ominous that many Manitobans have begun to fear that they will be unable to pass on to their children the same standard of living that they have enjoyed.

Their fears are well-founded. For, if we continue to live beyond our means, and to spend and borrow without the ability to pay the bills, we will not be able to provide for our children the quality of life our grandparents worked so hard to achieve for us.

Nor should we be lulled into thinking there are quick fixes to our problems, for none exist. Problems which have grown over decades will not be swept away overnight.

However, if we act quickly, decisively and with compassion, I believe we have an opportunity to ensure we pass on what was so preciously passed to us.
The task is immense, so too are the rewards.

The only way to ensure that much of what we enjoy today is passed on to future generations is by living within our means. Unfortunately, over the past 20 years, governments have not been that wise. While revenue was rising an average of 10 percent a year, government spent far more than it earned, and borrowed to the hilt to finance programs it could not afford.

Today this mountain of provincial debt, over $45,000 for a family of four, overshadows the present, and threatens to bury the future of the vital services that generations of Manitobans worked so diligently to create.

Last year alone, interest costs exceeded the combined spending of 12 government departments, and consumed 42 cents of each Manitoba personal income tax dollar, up from 4 cents in 1971.

In 1992-93, our difficulties were further complicated by:

a $130 million revenue shortfall, due primarily to lower income tax revenue and lower federal transfer payments;

a $30 million increase in debt-servicing costs, caused principally by a softening of the dollar; and

a $67 million liability for repayment of transfers, caused by a federal change in the methodology for estimating population for 1992.

When combined, this leaves the provincial government with a forecasted deficit of $562 million-$232 million more than the original budget.

In each of our homes, when spending overtakes income, and when there is no way to earn more, habits must be changed, and family members asked to do more with less. Governments are not immune to this reality.

So we began our budget process by examining every dollar that government spends: all programs, tax credits and public sector salaries. In the coming budget year, program expenditure will be reduced by 2 percent or $100 million.

Public debt costs have increased by $30 million, the largest dollar increase of any line in the spending Estimates. This money was simply not available for priority health and education services for Manitobans.

Departmental spending breakdowns include a 1 .2 percent reduction in each of Health and Education, and a 4.5 percent increase in Family Services. With the exception of Rural Development and Environment, all other departments will experience spending reductions, some as high as 14 percent.

In the medium term, this situation is not expected to change. In fact, total program expenditure will continue to decline by 1 percent in 1994-95, and remain flat through 1996-97.

In the 1993-94 fiscal year, expenditure reduction plans include the following measures:

a 5 percent across-the-board cut in administrative expenses will save taxpayers nearly $11 million;

18 administrative and personnel branches will be consolidated into fewer units;

the salaries of all members of the Legislature, all members of boards and commissions, as well as provincial court judges will be reduced by 3.8 percent;

the freeze on salaries paid to all members of Cabinet will be continued for the 13th consecutive year;

513 Civil Service staff years will be eliminated, with permanent layoffs held to fewer than 100 as a result of attrition, aggressive redeployment efforts and voluntary retirements;

a reduced workweek program will be introduced for all provincial civil servants, in order to trim salary costs by 3.8 percent and to avoid further layoffs;

all government-funded entities, including Crown corporations and those providing education and health care services, must achieve similar salary savings through measures such as the reduced workweek; this applies to all public sector employees, including doctors, nurses, teachers and university professors;

all Crown corporations, agencies and others funded by the government, either directly or indirectly, must streamline their organizations.
Together, these measures move government one step closer to living within its means. However, to achieve this goal, we must remain committed to making the necessary decisions in the future, regardless of how difficult they may be.

To date, this decision-making process has not been an easy one. In fact, it has been nothing short of a struggle to find a way to preserve the programs that lie at the very heart of what we love most about Manitoba.

Without question, this has been the most difficult and trying exercise of my entire 12-year career as an elected official. Frankly, it is because there were no decisions in health care, education or family services that my colleagues and I wanted to make; only decisions we knew we had to make, if we were to secure our economic future and the core of our social safety net for today and for the future.

We understand it is of little comfort to explain that things could have been much worse, for we know our decisions will cause some hardship. However, our goal was to avoid the widespread suffering that would have been the result of much harsher measures, like massive layoffs and significant tax increases. These are choices we could have made. However, knowing the course Manitobans want us to take, they were choices we refused to make.

The priorities that guided our spending decisions this year are the same as those that have guided us over the past five years. In my six budgets, we have chosen to allocate 92 percent of all new spending toward our most vital services.

Increases since 1987-88 total: $504 million or 38 percent more for Health; $259 million or 34 percent more for Education; and $247 million or 60 percent more for Family Services.

Again, Mr. Speaker, I reiterate, 92 percent of all new spending over the course of our first five budgets have been directed to those three priority areas.

Even at this year's funding level of $3.5 billion for these three departments, there were difficult choices to be made during the budget process.

In Family Services, for instance, we were able to preserve programming for our most vulnerable citizens, including children at risk, the physically and mentally challenged, senior citizens and the most needy social assistance recipients.

To accomplish this, we were forced to find savings by asking parents to pay a little more in daycare, by asking foster parents to accept less, and by reducing dental, optical and pharmaceutical benefits for social assistance recipients.

In the Department of Health, we were able to maintain the Home Care base budget, continue the conversion toward personal care beds for our aging population, and expand community-based mental health services hold major components of health care reform. To do so, we had to ask hospitals to cut administrative costs, and Manitobans to pay more for Pharmacare and for low-cost home care supplies and household maintenance. Similarly, we maintained the prevention component of the children's dental health program, but in doing so, we were unable to continue providing treatment services.

In Agriculture, we preserved the principles of the Gross Revenue Insurance Program (GRIP), but we were forced to find savings in programs such as hai I spot loss insurance and Superior Management benefits.

Government skills training initiatives are being consolidated in the Department of Education and Training to better co-ordinate these programs and strengthen their linkages to our economic strategy.

In the area of government grants, we were able to continue funding groups and organizations whose central focus was the delivery of key human services. However, to do so, we had to withdraw funding from organizations where service delivery is not the main focus, or where government can or already does provide similar service.

The budget also includes $289 million in capital spending, down slightly from last year, but still on a per capita basis amongst the highest in Canada.

In isolation, each of the difficult decisions taken on the expenditure side may not appear to make very much of a difference to overall spending. However, when taken together, they total savings of $100 million, and make a significant contribution to the renewal of our province.

To enhance our renewal efforts further, government must continue to create a local climate that is conducive to economic growth in an increasingly competitive global economy.

Already, firms like Standard Aero, ISM Corporation, Ayerst Organics, Monsanto, Palliser, D.W. Friesen and Teshmont engineering, to name a few located in Manitoba, are successful in competing internationally.

No factor is more important in encouraging business investment than a competitive taxation environment.

As a government, we have worked diligently to move Manitoba's combined tax burden from amongst the highest in the country to the middle of the pack. It is no coincidence that clear signs of economic improvement are beginning to show. During January and February of this year, Manitoba registered the lowest unemployment rate in Canada. As well, employment has grown by 12,000 jobs since last summer; housing starts rose 18.5 percent last year, more than double the national average; manufacturing shipments recorded the second-best performance in the country; and foreign exports increased nearly 15 percent.

In an effort to keep Manitoba competitive, I am pleased to announce that for the sixth budget in a row there will be no major tax increases. There will be no increase in personal or corporate income taxes. There will be no increase in the provincial sales tax rate. There will be no increase in payroll or capital tax rates.

In recognition of the vital role transportation plays in the provincial economy, we will take the following action: diesel fuel tax will be frozen for one year in order to support the trucking industry-this leaves Manitoba with the second-lowest rate in Canada; railway diesel fuel tax will be reduced by 3.15 cents a litre to 9.45 cents to support this important area of employment in Manitoba; and aviation fuel tax will be reduced from 5 cents a litre to 4.2 cents to boost local airport activity.

To encourage further investment in new manufacturing and processing in Manitoba, we will extend the 10 percent manufacturing investment tax credit introduced in last year's budget for an additional year.

To assist small business in creating new jobs, we will increase the payroll tax exemption from $600,000 to $750,000. This will result in the removal or reduction of the payroll tax for about 900 small Manitoba businesses.

Despite our best efforts to reduce spending and stimulate the economy, the serious financial situation we are facing has forced changes aimed at generating more revenue. Therefore, effective midnight tonight, gasoline tax will be increased one cent a litre to 11.5 cents, the fourth-lowest rate in Canada. The tax preference for gasohol will be reduced by one cent a litre. A new 5-cents-a-litre tax preference will be provided to encourage recycling of waste oil into diesel fuel.

In a move to help protect local jobs and level the playing field for retail business, Manitoba has entered into an agreement to have the federal government collect provincial sales tax at the border commencing July 1, 1993. In order to have the federal government collect this tax, Manitoba is required to adjust its sales tax to cover a wider variety of items.

Effective May 1, 1993, provincial sales tax will apply to snack foods, non-prescription drugs, newspapers and magazines, personal hygiene supplies, certain safety equipment, school supplies, baby supplies, and sewing patterns. Books will continue to be tax exempt.

Also effective May 1 , provincial sales tax will be applied to children's clothing costing more than $100 per item, purchases of safety clothing and footwear, and restaurant meals under $6.

Effective August 1, 1993, the application of provincial sales tax on private automobile sales will be tightened to ensure sales tax is collected on the fair market value.

These sales tax changes raise $39.4 million this year, and help us keep the sales tax rate at 7 percent, the second lowest in Canada.

Last year, the Manitoba government paid out $241 million through one of the most generous tax credit programs in Canada. Given our financial circumstances, it was impossible to continue this level of support. Accordingly, we will reduce annual payments by $53 million in 1993-94 through the following changes.

The property tax credit on tax statements will be reduced by $75 to $250. Manitobans with family income less than $27,500 will recover at least a portion of the reduction when they file their income tax returns. Homeowners and tenants with higher income will have their credits reduced by $75.

A minimum property tax threshold of $250 before tax credits will be introduced. This will ensure that every property owner makes some contribution to the provision of local services.

The income definition used to determine tax credits will be broadened to include previously exempt income from social allowances, workers compensation, or Guaranteed Income Supplements. This will ensure that, regardless of income source, people with the same income levels receive the same level of credits.
All applicants for the $175 benefit under the Pensioners' School Tax Assistance Program will be income tested. Those having an income less than $15,000 will continue to receive the full benefit. Benefits will phase down to zero at $23,800 in income. Instead of receiving this benefit at property tax time, benefits will be delivered through the tax credit application process at income tax time.

The tax credit program changes also result in a $5 million reduction in tax credit supplements paid directly to provincial social allowances recipients through Family Services.

In the course of this budget process, we have called upon all Manitobans to do their part to protect all that we hold dear.

As a result of their sacrifices, we have been able to control major sales and income taxes, and introduce new ways to encourage continued economic growth.

Of equal importance is the progress Manitobans have helped us achieve in the area of deficit reduction. When combined, our entire package of expenditure and revenue measures will result in a deficit of $367 million. This is a $195 million or 35 percent reduction from the 1992-93 forecast.

In part, this is as a result of a $30 million transfer from the Rascal Stabilization Fund, and a $60 million draw from lottery revenue, including 65 percent of annual video lottery terminal revenue.

While there have been many competing requests for VL T revenue, Manitobans steadfastly believe that there is no more urgent use for these funds than deficit reduction. To that end, our plan includes continued use of lottery revenue until the deficit is eliminated.

We will dedicate the remaining $12.3 million or 35 percent of rural VL T revenue to supporting continued economic growth and development in rural regions. Of that total, $8.8 million, representing 25 percent of annual VL T revenue, will provide an increased allocation for the Rural Economic Development Initiative, as well as funding for special economic development projects.

The remaining $3.5 million, representing 10 percent of annual VL T revenue, will be transferred by formula to local governments. Further details will be presented during the Estimates review.

There is no question that the Fiscal Stabilization Fund and lottery transfers have played an important role in our ability to reach a $367 million deficit.

However, our ultimate goal is to balance the budget. To do so, we must continue our focus on controlling spending at or below current levels; we must experience revenue growth between 2 and 3 percent; and we must continue to control taxes in order to attract investment that is essential to long-term recovery.

In 1994-95, our deficit is targeted to be $256 million. We expect to reduce it further to $125 million in 1995-96, and balance the budget in 1996-97.

Balancing the budget is an important goal, but not our sole motivation. In reality, it is a means to an end, a way to ensure that our children will not be bound by the burden of debt that prevents them from enjoying the services and quality of life that we have been afforded.

Preserving this legacy has been our driving force, a force that will keep on guiding us as we continue on the path toward a stronger Manitoba.
Thank you very much, Mr. Speaker.