Province	  Législature	Session	Type de discours	Date du discours Locuteur		Fonction du locuteur	Parti politique
Nouveau-Brunswick 51e 		1e 	Discours sur le Budget	6 avril 1988	 M. Allan E. Maher	Ministre des Finances	PL

Mr. Speaker, before going into my budget address, I want to avail myself of this opportunity to 
congratulate you on your election as Speaker of this Legislative Assembly. Your many years' 
experience as a member of this House, and your wisdom and good humour which so many of us 
know about, will be most valuable in presiding over the many lively debates that lie ahead.

I also ask you to convey to Their Honours, Lieutenant Governor and Mrs. Finn, my respect and 
admiration for the manner in which they carry out their important roles in this, our democratic 
system.

As well, Mr. Speaker, I want to take this opportunity to congratulate our Premier on his great 
victory in the election on October 13, and to commend him on the manner in which he has 
conducted the affairs of the province since assuming the position of First Minister on October 27 
last. Mr. Premier, your excellent work habits, your dedication to the job and your understanding of 
the issues and the people have brought satisfaction and pride in their government to the people of 
New Brunswick. I want myself among the fortunate who arc able to be a part of your team, and I 
assure you of my continued support and loyalty as you carry out your onerous responsibilities as 
leader of the government.

The measure, Mr. Premier, by which you and your government are to be judged, as you have said 
many times, is by the jobs we are able to create. While I may not have created any new jobs with 
my purchase, I can assure you that I have perhaps helped save one or two. Today I am wearing the 
traditional new shoes of the Minister of Finance, partly because of the tradition but more 
importantly because I needed them. I want to assure you that they were bought in New Brunswick 
and made by New Brunswick craftsmen, and I am very proud to be able to promote that.

Mr. Speaker, the budget I am presenting today is a turning point in the management of the 
government of New Brunswick. It is a major step in implementing our Agenda for Change and in 
setting the long-term course of renewal for our province. The budget I am presenting today 
provides for a deficit on the Ordinary Account of $29.7 million. On Election Day we inherited a 
deficit for 1987-88 which was forecast to rise to $155.2 million. We believe that because of the 
management measures already taken this year, the 1987-88 deficit will be significantly reduced by 
year end.

The future of New Brunswick is bright and the government is enthusiastic about the things that can 
be done to create a strong and vibrant economy in our province. The immediate economic outlook 
is good and in the longer term there is a great deal in our favour. Provincial industry is competitive 
and free trade will generate new opportunities for expansion. The right provincial policies will 
enable us to build on that underlying strength to create more jobs and offer our fellow citizens more 
opportunities to earn a decent living. In difficult financial circumstances, our government has 
sought to strike a balance between our obligations to meet our campaign commitments and a 
balance between our responsibilities to ensure that the cost of financing these services is shared 
fairly.

In this budget, we are introducing progressive, long-term measures to help all New Brunswickers 
participate in our economic life. We have acted with moderation to maintain a healthy but 
acceptable level of growth in Ordinary Account expenditures. For the first time in many years, our 
budgeted spending on transportation and economic development will increase more rapidly than the 
government average. We have also acted with moderation and balance on the revenue side. Mr. 
Speaker, this government does not believe in boom and bust budgets, timed to match the election 
cycle. We believe that governments should manage the affairs of their citizens with moderation and 
respect.

Mr. Speaker, I would ask all honourable members to note that the large in-year expansion of 
spending in 1987-88 means that simple year-to-year comparisons of our budget to last year's must 
be interpreted with caution. For example, on a budget-to-budget basis Ordinary Account spending 
is up 7.61 % while on a third-quarter-to-budget basis it is up 5.6%. In this speech I will be citing 
comparisons that most accurately reflect the true thrust of our budget.

Mr. Speaker, 1988-89 is at liming point in many respects. This year will be  this challenge of 
putting provincial finances back on a sound footing and of beginning to rebuild the New Brunswick 
economy.

In the coming year, the government will continue to spend substantial amounts to provide services 
to New Brunswickers. Total expenditures on Ordinary Account will increase by 5.6%, from $3.119 
billion in the third quarter of 1987-88 to $3.293 billion.

In this budget, the government is setting out new directions. We have made major financial 
investments, such as the allocation of $5.6 million to a youth employment strategy, a $19.3-million 
job creation program, with $4 million designated for natural resource development. We are also 
providing $500 000 in additional funds for private woodlot development, $500 000 to encourage 
mineral exploration, $10 million for catch-up in northern health services, $2.1 million for student 
aid, $2 million in 1989 property tax reductions for farmers and $1.4 million in 1989 property tax 
concessions for seniors.

The Ordinary Account deficit will be reduced to $29.7 million this year and financial requirements 
in 1988-89 will be over $155 million, lower than third-quarter estimates for 1987-88. We are 
determined that future ordinary expenditure growth will not outstrip the rate of growth in revenue. 
This, in conjunction with changes in capital spending, will lead to further improvement in our 
capacity to create more jobs in subsequent years. This approach will allow us to continue to 
implement our Agenda for Change-paying as we go rather than encumbering future generations 
with these costs.

An important element of our strategy is to adopt a more rational approach to capital projects. We 
plan to hold borrowing for capital spending to about $300 million annually over the next three 
years. In response to representations from the construction industry, tenders will be let earlier in the 
construction season and construction projects will proceed more quickly and efficiently.

Getting the economy growing to its potential is a cornerstone of our strategy.

The government believes that we should invest in our people. We must prepare and help them to 
take advantage of new opportunities and, indeed, to create many of those opportunities themselves. 
Funds are provided in this budget to help more people obtain the training and experience they need 
to become productive members of society. Special emphasis is placed on the needs of young New 
Brunswickers who have had a special problem in taking their rightful place in the working labour 
force of our province.

Before going into the details of the government's plans for 1988-89, I would first like to describe 
the economic outlook.

Mr. Speaker, the outlook for New Brunswick is promising. Overall economic growth is expected to 
be 6.9% in 1988, 6% and 5.8% in 1989 and 1990 respectively. After adjustments for inflation, the 
economy is forecast to grow by 2.4% this year and 2070 in the two subsequent years. Present 
forecasts predict that unemployment will decline moderately to 12.7 % this year and will decline 
further to 12.2 % in 1989 and 11.9 % in 1990. We welcome the improvement, but still consider 
these levels of unemployment to be unacceptable. The government is committed to a vigorous 
program of economic development to try to improve this outlook. In this regard, the government 
will announce a comprehensive economic development strategy later this year, including a three-
year budget plan, as stated in the Agenda for Change.

Investment is presently forecast to increase by 3.7 % this year. It is forecast, however, to decline in 
1989 and increase by 1% in 1990. Mr. Speaker, the government is now involved in discussions 
with industry concerning several major projects that have not yet reached a go-ahead stage, and 
which are not included in the forecast. The government believes the rate of investment can be 
significantly improved over these forecasts. For example, we believe that major new projects in the 
pulp and paper and energy sectors will provide greater opportunities for growth and employment.

The government has made it clear that job creation is its first order of priority. The 1988-89 budget 
reflects this. In this budget, the percentage increase of Ordinary Account funds devoted to 
economic development will exceed that devoted to social programs and to administration. Spending 
within economic departments will rise by 17.1% over last year's budget.

Mr. Speaker, I would now like to highlight some of the new initiatives in various departments to 
stimulate economic development. The government is aware of the frustrations of individuals who 
find they lack the schooling, training, on-the-job experience or simple know-how to get and keep 
the jobs they want or, worse, who find themselves in a state of unwanted dependency. With this 
budget, the government will launch a major offensive to eliminate the barriers faced by our youth 
as they try to take their rightful place in the job market. Pending the successful completion of 
negotiations now under way with the federal government, a Youth Employment Strategy will be 
undertaken to encourage and assist youth to pursue their employment goals. The strategy will offer 
a comprehensive range of services including individual assessment and counselling, educational 
upgrading and opportunities for training and labour market attachment.

With federal participation, we expect that in its first full year of operation, 10 000 of our youth will 
be assessed and enrolled in career path activities. This is the single most ambitious youth strategy 
ever contemplated in Canada. The government is committing $5.6 million of its own funds to the 
program in the current fiscal year. This commitment will rise to $13.5 million in its first full year of 
operation.

The other thrust of our employment offensive will be directed to employable persons on social 
assistance. Through the comprehensive program of the Department of Income Assistance, social 
assistance recipients will have the opportunity to increase their skills and gain the experience 
necessary to acquire a solid footing in the labour market. The $7 million which the province will 
spend in the current fiscal year will be matched by $7 million worth of federal programming, 
making this the largest initiative in the history of our province in assisting those on social assistance 
to achieve self-sufficiency.

A fundamental thrust of this budget is to prepare New Brunswickers for the job opportunities 
ahead. The Department of Advanced Education and Training has $500 000 in new funds for 
courses designed to prepare people to deal with technology and to improve the literacy of adults. In 
addition, the department's budget contains $200000 for expanded fisheries training programs in 
conjunction with the Department of Fisheries and Aquaculture. This year, an additional $1.9 
million is being directed toward the Dieppe Community College, which begins its second full year 
of operation.

Mr. Speaker, knowledge is an increasingly important part of the new global economy. Having a 
university education is one of the keys to the future employment of our young people. The 
government is rising to the challenge. The budget provides $7.977 million in increased assistance to 
universities. This is a growth rate of 6.8% and meets the funding recommendation of the Maritime 
Provinces Higher Education Commission. Of this increase, 1.75% is intended to restore the erosion 
in funding which occurred in the early 1980s.

In addition, Mr. Speaker, a number of improvements totalling $2.1 million have been made to the 
student aid program in line with our commitment to make postsecondary education more accessible 
to New Brunswickers. These include an increase in the maximum allowable bursary from $2200 to 
$2700 per year. This will be particularly important to students with families and to those in high-
cost programs of study, and will reduce the debt burden of many students upon graduation.

The parental contribution table used to calculate the required level of parent contribution will be 
adjusted upward to provide more help to students from lower income families. As a result, the 
minimum income level for parental contribution will be raised by $1500. For several years there 
has been a program to assist students preparing to enter professions in short supply. In this budget 
the government is adding denial pharmacy and dental hygiene to the list of possessions eligible for 
this assistance. An additional $80 000 has been added to the 1988-89 budget for this purpose.

The government has frozen at $8000 the minimum debt level at which students become eligible for 
a rebate of a portion of their Canada student loan. This decision, in conjunction with the measures 
cited above, will help ease the debt load problems faced by many graduating students. The 
commercial fishing industry of New Brunswick is undergoing dramatic change and growth. The 
change in the name of the Department of Fisheries and Aquaculture symbolizes the recognition of a 
need to support both the traditional fishery sector and the rapidly growing aquaculture industry. 
The sum of $200 000 is provided to establish an aquaculture division in the department, in order to 
ensure a more rapid and effective response to the needs of aqua-culturists. The government will 
ensure that this new industry develops as rapidly as possible, without limiting the ability of 
traditional fishermen to pursue their occupation.

The department's budget also contains an additional $150000 for the expansion of programs related 
to the promotion of our fisheries products, and for providing better communications between the 
department, the industry and the citizens of the province.

The government has also provided a further $30 000 to ensure a better service to fishermen in 
negotiations with the governments of Canada and other provinces for a fair share of the quota for 
New Brunswick fishermen.

This budget contains an additional $140 000 to assist in the promotion of New Brunswick products, 
as well as to provide for inspect ion of fruit and vegetables at the retail level. This will ensure 
producers are playing their part in packaging and presenting their wares in a way that ensures value 
for the New Brunswick consumer.

The beef industry falls far short of being able to provide enough beef to meet local demand. 
Nevertheless, many producers are forced to sell their cattle before they are ready for slaughter due 
to a shortage of working capital. This budget contains $75 000 for a program to help New 
Brunswick beef producers retain their cattle until they are ready for slaughter.

Mr. Speaker, this budget provides an additional $300 000 to increase tourism promotion. At the 
same time, local industry will be encouraged to participate in the production of promotional 
materials. The government will encourage the use of New Brunswick as a location for film and 
video production.

The budget contains $40 000 to fund an expansion of lifeguard services at provincial facilities, 
increasing from five to II the number of places where we offer the service.

The sum of $25 000 in additional funding will be provided to assist small museums with their 
development activities.

The Agenda for Change clearly identified the priority the government places on the development of 
the downtown areas as a means of encouraging economic growth. As part of the implementation of 
the downtown program, the funding for the Main-street program has been increased by $300 000. 
This is only an initial step. We are currently negotiating with the federal government to launch a 
comprehensive urban development strategy, which we are targeting for implementation April 1, 
1989.

A clean environment is very important and the development of a clean water Act is something to 
which we are committed. In addition, we arc committed to ensuring the Department of Municipal 
Affairs and Environment is adequately staffed to properly implement its policies for water supply 
protection and waste disposal. Accordingly, the department's budget contains $182 000 in 
additional funds for these projects.

The Department of Labour, through a new focus on its employment development program, will 
playa more significant role in fostering new job opportunities and contributing to the long-term 
development of the New Brunswick economy.

Through the private and volunteer sectors, training and work experience opportunities will be 
provided to the unemployed, students, youth, women, the disabled and Aboriginal peoples. In 
addition, a special initiative already underway will assist unemployed citizens in establishing 
themselves in business through the new Entrepreneur New Brunswick program. A total of $19.3 
million will be allocated to these initiatives, including $4 million designated for job creation in our 
natural resource sector. Funds in this budget have also been identified to deal with certain crises as 
they evolve in our economy.

The growth rate of our forests under natural conditions is not sufficient to meet the needs of our 
growing forest-based industries. Consequently, $2 million from the employment development fund 
under the Department of Labour will go to silviculture activity this year. This is a prime example of 
how we can put people to work today in order to ensure future jobs in our forest industry. Our focus 
is to ensure our actions today pay useful dividends tomorrow.

An additional $2 million is also being provided for further job creation activities related to our 
natural resources. This will include initiatives directed toward the enhancement of fish habitat and 
the protection of salmon-breeding stocks to increase the long-term attractiveness of the sport-
fishing industry. Also included is money to provide training for forest firefighters. This will also be 
paid from the job creation funds in the Department of Labour.

The government recognizes the importance of encouraging private woodlot owners to follow 
management practices that will increase their harvest. We shall continue our efforts to obtain more 
federal participation in assistance programs for the woodlot owner. However, in this budget we are 
demonstrating our commitment by providing an additional $500 000 for programs to help private 
woodlot owners.

This budget provides $6.4 million to fight the spruce budworm in a more environmentally safe 
way. We will increase the proportion of the spray program using Ht rather than chemicals from 
20% to 50%.

New Brunswick has many successful and profitable mines, but continued exploration and 
development is necessary so that new mines may be brought on stream. With this in mind, the 
budget also provides new funding of $500 000 for additional geological exploration activity by the 
department, as well as for a mineral exploration grant program to assist junior mining companies.

The formation of the Atlantic Canada Opportunities Agency and the programs it has announced 
mean that some services to industry that were previously provided by the province are now 
available federally. Nevertheless, the province has not reduced its financial commitments in this 
area. We shall not vacate the field of assistance to New Brunswick business, but we will tailor our 
own programs to truly supplement those offered by ACOA. Further details will be provided later by 
the Minister of Commerce and Technology.

Later this year, the government will also be undertaking several new initiatives to assist New 
Brunswick business and entrepreneurs. We will be implementing a stock savings plan to become 
effective in the 1989 tax year. A discussion paper will be tabled in this House in the near future to 
that effect. We are also prepared to implement with Labour and the cooperative movement new 
venture capital initiatives.

The first priority of this government in the field of transportation is to build a four-lane Trans-
Canada Highway and complete Route 11, while at the same time maintaining and upgrading the 
highway network of the rest of the province.

The capital budget of the Department of Transportation is $127 million for 1988-89. I am pleased 
to announce that funds are provided for design work on the Miscou Bridge and that work is now 
underway on the design for the Grand Manan ferry, with a final design to be selected by early 
summer.

Safety on the highways is also a high priority. We are providing additional funding of $507 000 to 
help bring New Brunswick into compliance with the national safety code for motor carriers, as well 
as providing for more highway weight enforcement in the southeast portion of the province.

As well, Mr. Speaker, the federal and provincial governments have signed an umbrella agreement 
for official languages. In accordance with this agreement, $500000 has been added to the Regional 
Development Corporation budget. This will enable provincial departments to take advantage of 
additional funds being made available by the federal government.

Mr. Speaker, while the emphasis of this budget is on jobs, the government has provided the funds 
to move forward with its priority commitments in the health care field. Mr. Speaker, this 
government stated as part of its electoral commitments that the number one priority in the health 
care field is northern health service development and that it would spend $10 million in 1988-89 in 
support of this initiative. I am pleased to confirm the inclusion of the $10 million in today's budget. 
Further details will be announced later in the session by the Minister of Health and Community 
Services.

The problems of alcoholism and drug addiction exact a terrible toll on many members of our 
population. The government will impose more stern measures to deal with the problem of drinking 
and driving, including a fee increase for license reinstatement and mandatory training programs for 
convicted impaired drivers.

Mr. Speaker, this government has recognized the immediate benefits that have accrued from the 
integration of special needs children into the regular school system. Therefore, new monies will be 
provided to the Department of Health and Community Services to engage additional professionals 
needed to provide child support services in the school system. These professional disciplines will 
include speech pathology, physiotherapy, occupational therapy and clinical psychology.

In keeping with our commitment to Agenda for Change, I am pleased to announce a new school 
supplement program of approximately $757 000 for students whose families receive basic 
assistance. This will help needy families meet the extra expenditures for school supplies and 
clothing to prepare their children for school.

An additional benefit to people receiving social assistance is the extension of the period for which 
the fuel supplement is available. Beginning next winter, the supplement will also be paid for the 
month of April. The government is committed to further improvements to this program in 
subsequent years.

Mr. Speaker, I would like to review briefly the government's plans for school and hospital 
construction. For 1988-89, we have established as a priority the completion of schools and hospitals 
which are currently under construction. We do not believe the people of New Brunswick would be 
well served by a freeze on ongoing projects, nor would it be financially effective.

Instead, Mr. Speaker, $71.4 million has been allotted for ongoing hospital construction projects, the 
largest amount ever dedicated to the health system. Last year health capital spending was $69.4 
million; in 1986-87, $54.9 million, and in 1985-86, $30.9 million. Of this year's budget, 85% will 
go to hospitals which are already under construction. Our goal is to complete them within the fixed 
contract budgets, which are now in the process of being finalized. All these major projects will be 
completed on an accelerated schedule.

The record hospital construction budget reflects the government's dedication to completing existing 
projects and its willingness to invest large sums of money where needed. It is false economy to 
drag these projects out. We must complete them so that we can proceed in subsequent years to meet 
other important health care needs. No major new capital construction projects in health will be 
begun this year.

Similarly, with regard to school construction, the priority will be the completion of 18 projects 
which are currently under construction. Then, in future years, we will be in a better financial 
position to undertake much needed school-related projects. A total of $55.9 million has been 
budgeted for the Department of Education's capital program.

A well-planned and properly managed program of school and hospital construction is a priority of 
this government if we are to equip and maintain our existing buildings and construct new ones to 
meet changing circumstances. There are many school and hospital boards pressing to have their 
projects added to the government's capital program. Our priority must be placed, however, on 
completing the projects which have already begun.

Mr. Speaker, I will now describe the measures taken to manage our growth, but before doing so I 
believe it would be useful to review the chain of events that led to the financial situation this 
government inherited.

The financial record tells the story clearly and irrefutably. For decades it had been the policy of 
successive New Brunswick governments to borrow only for capital assets. It was also policy to 
achieve some surplus of revenue over day-to-day spending so that a portion of capital expenditures 
could be financed without borrowing. The Ordinary Account deficit for 1982-83 was budgeted at 
$164 million-an enormous amount in comparison to previous years. The 1982-83 budget set in 
motion a chain of events that tripled net debt to $2.8 billion. Interest payments also tripled to a level 
exceeding expenditures by the Department of Income Assistance.

While the federal government contributed to the problem through a series of cutbacks in programs 
for health and education as well as in other areas, the blame for the financial situation cannot be left 
entirely at the door of Ottawa.

After five successive years of economic growth, the second longest period without a recession 
since World War II, the fiscal situation in 1987-88 was this: The deficit on Ordinary Account 
remained well over $100 million; the province's financial requirements were $517 million, the 
largest on record, and interest on debt had risen from 81$ of revenue a decade ago to over 14%. As 
a result, interest costs have reached a level of outlays exceeded only by the Departments of Health 
and Community Services and Education.

Mr. Speaker, the damage which rising interest costs inflict on other programs is apparent. As a 
greater percentage of our tax dollar goes to interest payments, it eats away at what is left to pay for 
other services. As a bigger percentage of our tax dollar goes to make interest payments, we have 
less for health, education and roads. Managing our spending is not a matter of ideology; it is a 
matter of practicality.

Mr. Speaker, to manage the growth in Ordinary Account and to keep the increase to 5.6 % over the 
third-quarter estimates for last year, it has been necessary to re-examine certain programs. This is 
without a doubt one of the most difficult decisions we have had to make. It has been done in such a 
way as to have the lowest possible impact on the direct delivery of programs and services to 
individuals. Every attempt has been made to cut back on administrative overhead. This has been 
achieved by such measures as eliminating most of the allowance for price increases in the cost of 
overhead, by more careful scrutiny of travel costs and by rationalizing the delivery of certain 
services.

Mr. Speaker, 1 call on our hospital boards, school boards and professionals in the health care and 
educational fields to work with government in finding ways to provide essential services while 
managing annual cost increases. We must plan our service growth in these fields within the range 
of what we can afford. Spending in excess of what we can afford would eventually cripple these 
same essential services.

Mr. Speaker, a number of specific steps have been taken in this budget to manage the rate of 
growth in our expenditures. There is no doubt that these measures will be difficult for some of our 
citizens, and we must take these actions only because it is essential if services are to survive over 
the longer term.

The first of these changes involves the prescription drug program. This program ensures 
prescription drugs for seniors and for certain other people with extraordinary drug needs. In the past 
nine years, this program has grown from an initial budget of $8 million to approximately $35.7 
million for 1987-88. At the present rate of growth, this program would cost $75 million by 1995. 
Steps must be taken now to moderate this rate of growth.

Effective May 1, 1988, seniors not receiving the guaranteed income supplement will be responsible 
for paying the full cost of the dispensing fee charged by pharmacies. The fee is currently $6.34 per 
prescription. The cost to low-income seniors that is those receiving the guaranteed income 
supplement will be capped at $120 per year. Seniors currently pay $3 per prescription to a ceiling 
of $45 per year, so the maximum increase for GIS recipients will be $75 per year. In taking this 
action, we are very aware of the increased burden to our low-income seniors. However, by sharing 
the cost with the beneficiaries, the province can ensure the continuation of this important program.

I would note in passing that the soaring cost of Ontario's drug benefit plan and other problems in 
drug use and cost have recently led the Ontario Health Minister to appoint a special inquiry into the 
matter.

The Minister of Health and Community Services will also be meeting with representatives of the 
pharmacies to seek ways to restrain the escalating cost of the drug programs. This will not, 
however, result in any increased cost to seniors.

The Medicare program is another major expenditure area for the Department of Health and 
Community Services. Payments under Medicare are estimated to cost $154.7 million in 1988-89. 
The Minister of Health and Community Services has recently entered discussions with the New 
Brunswick Medical Society in seeking the cooperation of physicians in the government's restraint 
efforts. The results of those discussions will be announced by the minister when they are 
completed.

Mr. Speaker, we have had in this province since 1976 an Alcoholism and Drug Dependency 
Commission which now operates six provincial treatment centres. However, we have been paying 
very high fees for persons who are referred or seek treatment outside the province. We feel that in 
the majority of cases the facilities here in New Brunswick can provide the needed service. 
Therefore, the Minister of Health and Community Services will be introducing measures which will 
require prior approval of the Alcoholism and Drug Dependency Commission before the province 
will pay for treatment outside New Brunswick.

The funding grant for the mobile vision screening program will be withdrawn. However, public 
health nursing services will be enhanced to provide comprehensive screening or preschool children. 
I might add, Mr. Speaker that children who need optometrical examination services will continue to 
receive these at no cost, through Medicare.

Also, further efforts to manage costs will apply to the homemakers program delivered by various 
service providers. This program is an important component of the community-based services for 
seniors program. We intend to maintain this program to help seniors remain in their homes and 
communities, among friends and out of institutions. After some experience with it, the government 
believes it is feasible to reduce the current rate of utilization of the program. However, it will 
continue to be widely available and effective.

Mr. Speaker, there are approximately 800 special needs children throughout the province receiving 
a broad range of support services for health care, education and recreation. This program has been 
made universal since the closure of the William F. Roberts Hospital School. The budget for these 
services has almost doubled since the closure of the hospital school. To help with the provision of 
support services to these special needs children, the government will ask for a financial 
contribution of a portion of the costs from those parents who have the financial resources to provide 
it. The Department of Health and Community Services will prepare a formula for calculating 
parental contributions.

From its inception in 1981-82, the civil legal aid program in this province was permitted by the 
former government to operate with insufficient funding to adequately address its mandate. While 
resources allocated to criminal legal aid grew, this growth was at the expense of civil legal aid. 
Within civil legal aid the number and range of services available were allowed to erode to the point 
that today a truly viable civil program in fact no longer exists. To restore and rebuild services to an 
acceptably effective level at this time would require a level of funding that is beyond our current 
means. We have therefore been obliged to eliminate the civil legal aid program. We are asking the 
Law Society, together with the Law Foundation, to work with us on this matter to consider alternate 
means of providing legal services in civil matters to those whose ability to pay for such services is 
limited. We are asking that New Brunswick lawyers continue their generous tradition of offering 
services free of charge that are in the public interest.

We are also mindful of our commitment to reduce the pupil-teacher ratio, particularly in the 
primary grades. However, due to the financial situation being faced by the government, progress 
will be slower than desired.

Recent years have also seen a major expansion in textbook purchases as upgrading and changes to 
curriculum have occurred. This level of spending on textbooks is not sustainable. As a result, $5.8 
million will be allocated to instructional resources this year, compared to $7.8 million in 1987-88.

As in the case of textbooks, computer purchases in the coming year will be scaled down. 
Consequently, these will amount to $1.6 million this year, compared to $3 million last year.

Local school boards are being called upon to join with government in a cooperative effort to 
introduce economies and efficiencies in their operations. Departmental and district staff will work 
together to consider in what manner these can be implemented to ensure the maintenance of the 
best possible learning opportunities for students.

Mr. Speaker, to ensure that the interest payments on our debt do not continue to grow, and in view 
of the fiscal situation left by the former government, we have also had to consider tax changes. In 
considering how to do that, we have kept two principles in mind: Our taxation system must be fair, 
and our taxation system must be progressive.

Since the government is asking the people to help resolve the fiscal problem, it is only fair to ask 
our large corporations to do the same. Accordingly, the standard corporate income tax rate will 
increase from 15% to 16%, effective January 1,1988. This increase will yield an estimated $5.5 
million in additional revenue in 1988-89. This change will not affect small businesses with $200 
000 or less of active business income a year.

As well, effective April I, the corporation capital tax applied to banks, trust and loan companies 
will increase to 3% from 2%, yielding an estimated $2 million in additional revenue in 1988-89.

Effective midnight tonight, tobacco products will be subject to a provincial sales tax. This measure 
will yield an estimated $18 million this fiscal year. With the current change, two other provinces 
will still levy a heavier tax on tobacco than New Brunswick.

Federal tax reform reduced our personal income tax revenue by about $28 million. To recapture 
part of that revenue loss, effective January 1, 1988, New Brunswick's personal income tax rate will 
go up by two percentage points to 60% of federal basic tax. Source deductions for this increase will 
begin on July 1, 1988 at the rate of 60%. Since this will cover only half the year, tax filers will pay 
the higher rate on their first six months of 1988 income when they file their return in the spring of 
1989. This measure will yield $17 million in 1988-89, recovering part of the amount of personal 
income tax revenue the province would have foregone as a result of federal measures. Overall, the 
majority of New Brunswickers will still pay less income tax in 1988.

Mr. Speaker, I would like to illustrate what this increase will mean. For most New Brunswickers, 
the increase in provincial taxes due to t he rate increase is relatively small compared to the tax 
savings resulting from federal tax reform. Will only standard deductions, a one-earner couple 
making $30000 with two children under 18 will pay an additional $62 a year in New Brunswick 
income tax. This translates to an increase of $2.38 per pay period, assuming 26 paycheques a year 
are received. In the example I just cited lax reform will reduce taxes by $536. Therefore we can 
with our rate increase income taxes in this example will be reduced by $474 in 1988. In some 
individual cases taxes may be higher, but I would reemphasize that the majority will pay less 
income lax in 1988, even with our rate increase.

I would like to draw to the members' attention the fact that new revenues from large corporations 
mean an increase in their taxes of 6.7%, while new revenues from personal income taxes will mean 
an increase of 3.4 % for individuals.

Mr. Speaker, it is important to note that New Brunswick and Newfoundland now appear to have the 
two highest levels of taxation on personal income in the country. This perception is not correct. The 
prevalence of so-called flat taxes and surtaxes, and the fact that Quebec collects its own income 
taxes, render meaningless any interprovincial comparison based on rates applied to federal basic 
tax. In fact, Quebec, Manitoba and Saskatchewan have higher effective rates than New Brunswick 
in most income categories.

Mr. Speaker, I am also pleased to announce that the government has been able to introduce some 
tax reductions in this time of restraint.

In keeping with the government's Agenda for Chance, effective January I, 1989, all persons who 
attained their 65th birthday prior to that date, and who live in their own homes, will qualify for a 
deduction of up to $200 on their property tax bill for 1989. There are no income restrictions on this 
deduction, which will reduce seniors' 1989 property taxes by an estimated $1.4 million. This, in 
conjunction with the property tax break now in place, will lower senior citizens' property taxes by 
approximately $3 million in 1989. We are also mindful of our commitment to senior citizens who 
are tenants in unsubsidized housing. This item will be addressed in future budgets.

Also in keeping with the Agenda for Change, the farmland identification program will be expanded 
to include farm outbuildings for the 1989 taxation year. Under this program, property taxes on farm 
outbuildings will be deferred as long as the property is in agricultural use. This measure will reduce 
farmers' property taxes by an estimated $2 million in 1989.

Mr. Speaker, effective midnight tonight, sales tax on specially equipped cars, vans and light trucks 
purchased primarily for the personal transportation of permanently disabled people will be rebated 
to qualifying purchasers. This provision will also be extended to vehicles purchased and donated to 
non-profit organizations providing transportation services to the disabled. As a result, sales tax 
revenue will be lower by an estimated $150000 this year. Eligibility criteria and procedures for 
applying for the rebate will be made public over the coming weeks.

Mr. Speaker, there is one further revenue measure that I am announcing at this time for 
implementation later this year. Although not a tax decrease, I would characterize this measure as 
necessary to protect an existing tax break. At present, holders of ID cards, such as farmers, 
fishermen, aquaculturists, wood producers and silviculturists can buy a wide range of items without 
paying provincial sales tax. This system has resulted in some abuse. One particular problem has 
been the practice of some cardholders buying only from retailers who will sell them taxable items 
without collecting the tax. This creates pressure for all retailers to do the same. Such abuse 
threatens the viability of the exemption system for the workers in these sectors. As a solution to the 
problem, the government will adopt a rebate system under which the consumer pays the tax and 
applies to the Department of Finance for a rebate. This will end the kind of abuse cited above. Mr. 
Speaker, I want to assure everyone that every effort will be made to deal with all applications for 
rebate as quickly as possible. The government believes this system will be fairer to consumers and 
vendors alike.

The revenue estimates contained in this budget reflect fee and other revenue increases totalling $9 
million. Since some of these will not be implemented until next year, the full value will be realized 
in 1989-90, amounting to an estimated $13 million. The largest of the fee changes affecting 
individuals is a 15% increase in motor vehicle fee revenue for the 1989 license year. These fees 
have not been increased since 1985-86. The Minister of Transportation will announce a new fee 
schedule later this year. Some may increase by more than 15% and some by a lesser amount. Other 
fee changes will be announced by various ministers during debate of departmental estimates.

Also included in the $9-million increase cited above are higher royalty rates charged to companies 
harvesting timber on Crown lands, amounting to $4 million this year.

Mr. Speaker, the government found many fees and charges had not been increased for some time 
and no longer truly reflected the fair value of the service or product offered for sale.

As well, Mr. Speaker, a new guarantee fee will be applied to the New Brunswick Electric Power 
Commission debt which will generate revenues to the province of $10 million per annum. 
Currently, the Commission has outstanding debt totalling $2.5 billion, nearly all of which has either 
been guaranteed or loaned directly to the Commission by the province. The province's guarantee 
and direct loans have allowed the Commission to borrow more money at lower rates than it would 
have been able to on its own. This greater borrowing capability has enabled the Commission to 
undertake large-scale power generation projects. As a consequence, generating cost savings per unit 
of output arising from the size of these projects, combined with the lower interest costs, have been 
a direct benefit to consumers of electricity. However, while electric power consumers gain benefits 
from the province's guarantee, the taxpayers in general have been exposed to a substantial risk 
without compensation. This modest guarantee fee will recognize part of the benefit being provided 
to N B Power.

Mr. Speaker, I wish to announce the government will not be proceeding with a reduction in the 11 
% user fee charged to retailers of alcoholic beverages. The government will implement this change 
in a future budget when restraint is less of a priority.

Mr. Speaker, restoring confidence in our political institutions is a major task which governments 
face today. We have proceeded with moderation in managing the affairs of government and with 
balance in raising new revenues. We have made progress in moderating the percentage of growth in 
interest costs. We have introduced new initiatives and new directions which, we believe, will create 
new job opportunities. The budget that 1 have presented to you today sets our province on a course 
to build for the future, rather than borrow from it. An important start is made in implementing our 
Agenda for Change. The momentum of the provincial economy will be augmented by the measures 
announced today.
With Ordinary Account spending of $3292.7 million and revenue of $3263 million, the Ordinary 
Account deficit is budgeted at $29.7 million. Combined ordinary and capital spending yields a 
budgetary spending figure of $3595.6 million, a rate of increase of 3% over third-quarter estimates 
for 1987-88 with capital expenditures of $302.9 million and capital recoveries of $41.4 million, the 
budgetary deficit is calculated at $291.2 million. With net loans and advances of $39.9 million and 
adjustments for provision for losses and depreciation, financial requirements will be $361.1 
million. This is over $155 million less than third-quarter estimates of financial requirements for 
1987-88. With sinking fund earnings of $121 million, net debt is budgeted to increase by $170 
million in 1988-89, the lowest increase since 1981-82.

I am confident that members of this House and the public will see this budget as a new beginning 
that bodes well for the future of the people of our province. It is a budget on which the government 
will build in the future. I very much look forward to being part of that building process.

Thank you, Mr. Speaker.