Province Législature Session Type de discours Date du discours Locuteur Fonction du locuteur Parti politique Nouveau-Brunswick 51e 3e Discours sur le Budget 27 mars 1990 M. Allan E. Maher Ministre des Finances PL Mr. Speaker, I am proud today to present the budget for 1990-1991, the third budget of our Liberal government. Before I do so, however, I want to acknowledge the wisdom and skill you have brought to the office of Speaker. All members of this Legislature will agree that you can be counted on to carry out your duties with dignity and fairness. As well, Mr. Speaker, I want to express my appreciation to my colleagues in government, and staff of the central agencies of government, for their diligence, their cooperation and their professionalism in the preparation of this budget. Budgeting is never an easy process, but their work has left us all with a great deal of admiration for their abilities. Mr. Speaker, budgeting in New Brunswick must address the people's concern about jobs. Jobs provide a measure of independence and financial security for individuals and families throughout New Brunswick. During 1989, 12000 more New Brunswickers were at work than just two years ago. Despite a worldwide economic slowdown that will dampen the growth of economic activity across Canada, we expect an additional 4000 New Brunswickers will acquire jobs during 1990. Creating more jobs for New Brunswickers is a major priority of our government. Our strategy is to use every means at our disposal to generate new investment in New Brunswick which, in turn, creates a variety of new, temporary and permanent jobs for our citizens. Equally important is our emphasis on education, training and retraining programs that can help us better prepare our people for the jobs of today and tomorrow. I refer to initiatives such as the successful Opportunity Corps program for people receiving income assistance, the literacy training program and the youth counselling centres that we have established across the province. New Brunswick is a good place to work and do business. This province does not take a back seat when it comes to the quality of our labour force or the calibre of services that are available in the communities across New Brunswick. I am very pleased that this budget provides increased funding for job creation, enhanced education programs and other important services to our people. In some aspects of education and community-based services we are continuing to lead the country. I would like, Mr. Speaker, to acknowledge that much of what we accomplish is due to the generosity and community involvement of New Brunswickers who donate freely of their time and their talents to help their fellow citizens. A common sense, businesslike approach to managing government is also an important part of our strategy. It has been demonstrated many times over that governments do not borrow their way to prosperity. Governments that spend beyond their means soon find that controlling debt takes priority over everything else. This government is determined to keep job creation and prosperity for our citizens at the top of our agenda. We have established a pattern of responsible financial management over the province's financial affairs, and we intend to carryon with this approach. Mr. Speaker, I believe we have come a long way in restoring financial stability and economic confidence in New Brunswick. Yes, Mr. Speaker, our economy has grown, thousands of jobs have been created, our fiscal situation has improved, and our province has received national recognition. New Brunswickers should take a great deal of pride in their province. Our people, our resources, our small businesses, and our geographic location are but a short list of our attractive features. The challenge now before us is to promote these advantages to stimulate further economic development and job creation. If we plan ahead and continue to manage our financial affairs, it is our belief that New Brunswick is poised to experience record growth and job creation levels in the 1990s. However, Mr. Speaker, there will be many challenges to overcome, especially in the short term. Interest rates remain much higher than in the recent past, and it will be a year or two before the industrial countries of the world return to higher rates of economic growth. Mr. Speaker, it will require strong, effective leadership to face the challenges and take advantage of the opportunities that lie before us. The 1990-91 budget builds on our accomplishments to date and strengthens the province's ability to capitalize on the opportunities ahead. Mr. Speaker, I would now like to offer highlights of the 1990-91 budget that I will describe more fully as I continue my address. - Ordinary Account expenditures will increase by $230.2 million over the 1989-90 budget. This represents a growth rate of 6.5070, which is in keeping with our three-year fiscal plan to keep ordinary spending growth below the growth in the economy, which is expected to grow by 6.6070 in 1990; - Highway capital spending will total $186.I million, including $102 million on our arterial highway system. - The budget for health care will exceed $1 billion, an increase of $85.9 million or 8.8070 over last year, despite recent cutbacks in federal transfer payments. - Overall education spending will increase by $49.3 million or 6.5% in the year ahead. Programs will be expanded in our school system. - The Community College system will receive increased funding, and despite recent federal cutbacks in postsecondary education, for the third year in a row, the province will meet the Maritime Provinces Higher Education Commission's recommended level of funding for our universities. - Over $20 million will be provided for new initiatives and expansions to existing programs in 1990-91, with almost half of this amount devoted to job creation and preparing people for jobs. - Environment programs will be expanded, and the operating budget of the Department of the Environment will increase to $18.5 million. And in 1990-91, despite federal restraint, we are budgeting for a surplus of $3.7 million on the Ordinary Account. The 1990-91 fiscal year will be the third year in a row that we will provide quality programs and services to New Brunswickers by paying for day-to-day spending without adding to our debt. Mr. Speaker, before describing the ,government's expenditure plans in more detail for the year ahead, I would like to outline the fiscal and economic factors that were considered in preparing this budget. When our government was elected in the fall of 1987, the financial and fiscal condition of the province dictated that we had to take decisive corrective measures if we were to protect the province's financial integrity. New Brunswick's financial situation had deteriorated to the point where the government's ability to fund important programs and services was being threatened by a large and growing debt, brought on by a succession of large Ordinary Account deficits and an excessive capital construction program. The province's debt had reached the point where an increasing share of revenues had to be diverted to interest payments to service that debt. Interest payments had become the third highest expenditure of the government, after health care and education. The situation in New Brunswick threatened to become like the problem facing the federal government today. As honourable members know, controlling debt has become the major preoccupation of recent federal budgets. In order to slow the growth in the province's debt, Mr. Speaker, our government adopted a strategy that had two key components. The first was a plan to limit annual capital spending to the $300- million range, and the second was a plan to keep growth in ordinary expenditures in line with the growth in our economy, which is a broad measure of our ability to carry debt. In our first two budgets, we have successfully managed our capital budget and have been able to stay within the $300-million range each year. Through careful planning and by closely monitoring and managing expenditures, we have been able to remain within our capital plan, while at the same time speeding up the completion of our hospital construction program and building new schools. With the help of our new highway trust fund, we have started rebuilding our highway system. As a result of prudent financial management and some good fortune, our financial situation has improved and now provides increased flexibility in our spending plans. I am pleased to announce that the government has determined that it can exceed its $300-million capital range in the current budget. Accordingly, in 1990-91. the government's capital program will be $327 million. Thirty million dollars over and above the highway capital budget that was tabled last fall will be applied to the Trans-Canada Highway in 1990-91. I will have more to say about this, Mr. Speaker, when I discuss the government's spending plans for 1990-91. In our two previous budgets, we have been able to provide quality programs and services, as well as introduce some much-needed new initiatives, without incurring a deficit on the Ordinary Account. This is in stark contrast to the 1982 to 1987 period, when operating deficits regularly exceeded $100 million and on one occasion exceeded $200 million. In 1988-89, the surplus on the Ordinary Account was $64 million. The recent third-quarter report for 1989-90 projects that the province will have an Ordinary Account surplus of $116.5 million for the fiscal year just ending. Yes, Mr. Speaker, this record continues for 1990-91, when an Ordinary Account surplus is budgeted for the third consecutive year. In both 1988-89 and 1989-90, the province received unanticipated increases in revenues. In both years, the government decided not to spend these additional revenues, but to operate within the planned fiscal framework. Those decisions reduced our borrowing needs, will save millions of dollars in future interest costs, and now provide more flexibility in our expenditure plans. Mr. Speaker, the connection between deficits and debt is often not clearly understood. The enormous deficits between 1982 and 1987 resulted in a rapid increase in our debt. Recent success in dealing with deficits on the Ordinary Account does not reduce the debt, which remains a matter of significant concern. However, eliminating Ordinary Account deficits and reducing borrowing for capital projects has dramatically reduced the rate of growth in the provincial debt. As a result of responsible fiscal management, the burden of the debt, which is measured by net debt as a percentage of provincial economic activity, has declined each year since we took office. Because of the slower growth in debt, as well as opportunities to refinance earlier debt at lower interest rates, interest charges as a percent of revenue have also declined. In other words, we are now able to allocate a larger share of revenue to provide quality services to our citizens than at any time in recent years. Mr. Speaker, our improved financial position has been achieved in spite of a steady withdrawal of federal support for many of our programs. The recent pattern of federal cutbacks is a major cause for concern. In 1990-91 and in 1991-92, federal cash contributions in support of health and postsecondary education will be about $70 million less than had been anticipated prior to the recent federal budget. Mr. Speaker, this is a very serious problem for all provinces and continues a trend of federal restraint that we have endured for several years now. Since I presented my last budget, we have seen delays in ERDA negotiations and reduced federal cost-sharing ratios; proposed changes to unemployment insurance; cutbacks in defence spending, VIA rail services, crop insurance, grain transportation subsidies and housing, to name only a few. Under the subsidiary agreements for agri-food, fisheries and aquaculture, forest renewal and planning, which expired last March and were renewed for another five years, federal funding will be down an average of $2.26 million a year. Federal cost sharing under new agreements has fallen from 651 110 to 551 110. Midstream rule changes in ACONs action program have also added to our costs, since it fell to the province to help new industries which were no longer eligible for ACOA assistance. The New Brunswick Housing Corporation also anticipates a reduction in federal funding for 1990- 91. The reduction in federal funding of criminal legal aid is $53 000 in 1990-91. Capping federal contributions under the young offenders cost-sharing agreement will cost the province at least $500 000 a year. Federal spending under the existing Canada/New Brunswick highway improvement agreement is expected to fall by $10 million in 1990-91, below 1988-89, and by as much as $29 million in 1992- 93. At the same time, rail line abandonments and free trade will increase highway traffic, and the need for upgrading the road network becomes more apparent with each passing day. Mr. Speaker, the financial problems currently facing the federal government are something that we have to factor into our planning for the next several years. The federal deficit of $28.5 billion projected for the next year and a net debt approaching $380 billion are very serious. If the federal financial situation turns out to be worse than their projections, we can expect the federal government to take further actions which will have negative effects on both our economy and our finances. Mr. Speaker, I earnestly hope that such an event will not occur, but in light of its potential impact on New Brunswick's financial picture, I feel it must be recognized. As things now stand, just taking into account the cutbacks announced in the latest federal budget, it will be extremely difficult for New Brunswick to have a balanced Ordinary Account budget in 1991-92. Mr. Speaker, I would now like to turn to the economic outlook which is an important parameter of our budget. In 1989, New Brunswick's economy grew by 7.2 %, up from the 7.0 % increase forecast in the budget last year. Investment led our economic expansion as investor confidence in the province was at an all-time high. Consumer spending and personal income were also higher than forecast, while the inflation rate was below the Canadian average for the fourth consecutive year. The slowdown expected in the economies of the United States, Canada and other industrial countries in 1990, will lead to slower growth in New Brunswick. I expect our economy to expand by 6.6fT/o in the coming fiscal year. According to the Conference Board of Canada, after adjusting for inflation, economic growth in New Brunswick in 1990 is forecast to be the highest in all of the Atlantic Region. Despite current high interest rates, I anticipate that investment in 1990 will exceed the record high level set last year. The continuing strong investment picture promises hundreds of construction jobs, as well as hundreds more permanent jobs when new capital facilities are brought into service. Personal income is forecast to grow by 6.6 % in 1990, despite slower growth in export industries and some other sectors. While this is less than in recent years, it is not significantly different from the 7.2 % increase achieved in 1989. Corporate profits are predicted to rise by 5 %, which is better than in both 1988 and 1989. It is particularly encouraging that employment growth is forecast to hold up through the economic slowdown expected in 1990. While the unemployment rate is forecast to increase to 12.7 % in 1990, that is due to an increase in the participation rate. The forecast calls for an increase in employment of 1.4 %, which is the same as in 1989. Although New Brunswick is expected to grow more slowly in 1990 than in recent years, I anticipate that the medium and longer term will show major gains in economic activity. Our province is particularly well positioned to benefit from the economic expansion that is foreseen for Canada and the rest of the industrial world through the mid-1990s. New Brunswick has many strengths on which to capitalize over this period. We have a productive labour force and an impressive pool of entrepreneurial talent. Our location, our environment and our stable fiscal and political climate are all important assets. New Brunswickers can be certain that their provincial government will aggressively pursue every opportunity to advance the interest of New Brunswick and create jobs and greater prosperity for our people. Mr. Speaker, in developing the budget plan for 1990-91, our government was determined to move forward with the vision for New Brunswick outlined in our major policy documents, Agenda for Change and Toward 2000. At the same time, the importance of maintaining a sound fiscal situation was recognized. The first matter I want to address is the decision we have taken to proceed with the Trans-Canada Highway project. In the capital budget that was tabled last fall, capital spending was set at $297 million for 1990-91. In addition to that amount, another $30 million in capital expenditures from the arterial highways trust fund was earmarked for our arterial highway improvement program. Ever since our arrival in office 2 1/2 years ago, we have been lobbying the federal government to join with us to cost share much-needed improvements to the Trans-Canada Highway. While New Brunswickers have been patient, we believe that the time has come to accelerate our efforts at improving and expanding our major highway link. Since our financial situation has improved and we have gained a certain measure of flexibility, we will finally begin to four-lane the TransCanada Highway in New Brunswick later this summer. The 1990-91 budget will be supplemented with an additional $30 million for capital work this year. Including the budget in the highway trust fund, a total of $102 million in capital spending will be specifically targeted to improving our arterial highways in 1990-91. Mr. Speaker, our government is continuing to press the federal government to join us in this venture, which is so important for New Brunswickers and for all those who travel the Trans-Canada Highway. We believe that the federal government has an obligation to carry a major share of the cost of upgrading the Trans-Canada Highway in New Brunswick. When a suitable cost-sharing agreement is reached with the government of Canada, we fully expect to recover most of our spending on this important project. I would now like to describe other new spending initiatives contained in this budget. Two and a half years of responsible financial management, together with tight budgeting, has enabled the government to allocate in excess of $20 million for new and expanded services in 1990-91. Of this amount, almost one half will be directed to activities in support of the creation of permanent jobs. It is important that we continue to create jobs, not only to generate income for individuals but also to help generate more economic activity to allow for more and better quality services in health care and education. Yes, Mr. Speaker, since 1987, 12 000 new jobs have been created in New Brunswick. Job creation and economic development are priorities that the government carries into the new decade. Central to our job creation strategy is continued emphasis on the manufacturing sector, with particular attention to the growth potential of small business. Mr. Speaker, as highlighted in Toward 2000, small business and entrepreneurship will continue to be major contributors to the future growth of our economy. In the coming year, a number of programs emphasizing small business will be funded in the Department of Commerce and Technology. Three hundred thousand dollars will be provided for a quality assurance program to assist small and medium-sized firms produce consistently high quality goods and services. That's right, $800 000 will be allocated for the continuation of small business programs previously financed by the federal government. By continuing to fund such programs as business entrepreneurship, business planning, market planning and management, and technical training services, the government will continue to directly assist and support expansion of the small business community throughout New Brunswick. Two hundred thousand dollars will also be provided to honour our commitment to implement a stock savings plan, which will provide New Brunswickers with a unique opportunity to invest in the development of our province. Mr. Speaker, in order for our government to create more jobs in our tourist industry, an improved and expanded tourism promotion campaign is required. Over the years, New Brunswick has not marketed itself as aggressively as our Maritime neighbours. In order to better sell the many attractive features that New Brunswick offers as a tourist destination, the government has established four objectives for expanded tourism promotion programs: firstly, to make New Brunswick better known as a tourist destination; secondly, to encourage more tourists to visit the province; thirdly, to encourage New Brunswickers to travel more within their own province and, finally, to extend the tourist season, both in the spring and in the fall. Approximately $470 000 will be added to the budget for tourism-related marketing initiatives, including a cooperative marketing venture with the Atlantic Provinces and an expanded advertising campaign in major market areas like New England and Central Canada. Mr. Speaker, $100 000 will be allocated for the development and implementation of a quality grading system for roofed accommodations. This voluntary grading system will be carried out in conjunction with the hospitality industry. To further promote travel within the province, $75 000 will be spent on the designation of scenic trails and roads. The government will also proceed with the establishment of a Fundy Trail Agency which will develop an action plan to build the Fundy Trail. It is anticipated that the agency will progress according to the plan of action, as resources permit. The Department of Natural Resources and Energy has an additional $406000 in its 1990-91 budget for deer and big game management. This will benefit hunters and the outfitting industry, and the costs will be covered for the most part by recent fee increases. In 1989, New Brunswick agriculture showed the third highest increase in farm cash receipts in the country. This budget provides funds to build on this momentum. A $2.25-million new entrant program, to help qualified new farmers acquire working farms, will be established in 1990-91. New funds totalling $210 000 will be provided to expand programs in beef finishing, potato and meat inspections and market development. The Department of Agriculture will also implement a special four-year financial assistance program for the New Brunswick fox and mink industry. Interest free loans will be provided to eligible producers to provide support during this period of weak markets. To help address setbacks in the fishing industry in the northeast, a new $1.5-million loan program in the Department of Agriculture will be directed at expanding the horticulture industry. Mr. Speaker, 1989 proved to be a very difficult year for the Atlantic fishery, as fish quotas were reduced and jobs were lost in the four Atlantic Provinces. In the face of difficulties in this industry, it is very important to gain maximum economic benefit from the resources we have. Yes. Mr. Speaker, an additional $100 000 is budgeted in the Department of Fisheries and Aquaculture to better market our fish in Canada and around the world. The aquaculture industry remains a source of growth in the fisheries sector. The new $l-million laboratory and office building to be built in St. George will provide important technical support to the aquaculture industry. as well as other aspects of the Bay of Fundy fishery. New courses in aquatic safety, business management and quality control will also be introduced at the School of Fisheries in Caraquet. The Department of Fisheries and Aquaculture has the responsibility for monitoring and licensing the processing, storage, handling and marketing of seafood products, including the various cultured species. An additional $200 000 will be used to provide additional inspectors to enforce provisions of the revised Fish Processing Act and Fish Inspection Act. More resources will be made available so that New Brunswick can bring a stronger voice to national and regional species negotiations. The equivalent of over 3600 person-years of work will be created through the construction of the $965 million Belledune generating station and a $250million investment in four combustion turbine generating units in Millbank. Planning is also underway for a new energy project at Grand Lake. Mr. Speaker, a key feature of our job creation efforts will be to continue with a broad range of funding designed to help people enter the labour force. It is our intention to use these funds to create job opportunities that will enhance social programs, improve our environment, and make our province more attractive for recreation and leisure activities. Since October 1988, approximately 3000 income assistance clients have gained valuable work experience in the public sector. An additional 1400 clients have received training and other services designed to improve their employability. Another successful program in helping people enter the work force is the Department of Labour's visible abilities program, where 551 disabled persons have found employment in the past 18 months. The government is aware that for many persons on income assistance, going back to work or school means placing their children in day care centres. In recognition of the rising cost of this service, I am pleased to announce that changes will be made to the child care program in the Department of Income Assistance to increase the daily subsidy from $13 to $14 for infants and from $11 to $12 for children over the age of two. As well, in 1990-91, the daily flat rate paid to day care operators will be increased from 33~ per space to 58~ per space. In total, there will be $428 000 in new funding next year, which will help day care operators address training, staffing and equipment issues. I am very pleased to report, Mr. Speaker, that the employment equity and the equal employment opportunity programs in the Board of Management are proceeding well. A new initiative is being added to provide secretaries and clerks with additional opportunities for promotion and professional development within government. The government believes that job creation funds can be used more effectively if we have a better understanding of employment needs as well as the job opportunities available. To this end, $200 000 is provided in the Department of Labour to develop a human resources strategy. Mr. Speaker, such a strategy will help us place people in jobs and ensure that our labour force will have the skills and occupations needed in the 1990s. The government believes that quality education is one of its most important services. I am pleased that new funding is provided for several educational priorities in the 1990-91 budget. This province is a leader in its program to integrate and educate special needs students in the classroom. In 1990-91, the integration program will be expanded by $I.26 million in new funding in the Department of Education to increase the number of teachers, teachers' aides and attendants for students who require more individual attention. [n addition, funds are provided to increase support services for the integration of special needs students in the school system. Another area where New Brunswick is leading other jurisdictions is in our second language program. Our goal in this regard is that all students should attain a functional level of proficiency by the time they leave high school, regardless of their original linguistic environment. Second language instruction will be expanded by $1.3 million in new funds in the Department of Education to help fulfill this goal. Mr. Speaker, our new high school reorganization program is working well. While a greater proportion of provincial students are completing high school and earning a diploma, the government wants to do more in that area. To this end, the province is negotiating with the federal government for a program to keep students at risk from dropping out and failing to complete their education. With respect to postsecondary education, the government's commitment to our universities has been reaffirmed in this budget. Despite the recent cutbacks in federal grants in support of postsecondary education, I am pleased to announce that grants to universities will increase to $143.9 million in 1990-91, as recommended by the Maritime Provinces Higher Education Commission. Our Community College system will receive $7.7 million in increased funding in 1990-91; this is a 7.91 % increase over the 1989-90 budget. To address the government's commitment to educate and train unemployed persons and those who do not have the benefit of a high school education, $536 000 will be placed in the budget of the Department of Advanced Education and Training as additional funding for the night school component of the adult basic education program. The government has budgeted $650 000 to continue the operation of the three storefront Adult Learning Centres in the northeast that were established last year as a pilot project. The government continues to be committed to the improvement of health care services. To reaffirm our strong commitment to the Decade of Disabled Persons, I am very pleased, Mr. Speaker, to announce several new initiatives. The vocational rehabilitation program will be increased by $200 000, raising the program's 1990-91 budget to $928 000. This program provides educational resources, equipment, training and support to enable more disabled persons to lead independent life styles. Improved access to government programs will be provided to the 14 100 visually impaired New Brunswickers by making major government documents available in cassettes and Braille. A speech language pathology and audiology coordinator will be established to assist in the placement of New Brunswick students studying speech pathology and audiology. Money has been provided to the Department of Supply and Services to engage the services of a sign language interpreter. My colleague, the Minister of Income Assistance, will also be announcing a program to provide assistance to disabled persons currently in room and board accommodations. Mr. Speaker, we must ensure that our young people have a solid chance for a prosperous and secure future. For those youth who are troubled, the need is even more acute. In this respect, the Provincial Court will be expanded and designated as the court of jurisdiction for the Young Offenders Act. This will provide a more prompt response for referring young offenders for appropriate counselling and services. Mr. Speaker, we are all aware of the tragedy that occurs when young persons become addicted to alcohol and drugs. To help address this problem, I am pleased to announce that a community-based youth addiction program will be initially implemented in Saint John, Moncton, Tracadie and Fredericton. New libraries have been approved and additional staff support will be provided for the operation of one-person libraries. New funding totaling $123 000 has been allocated in 1990-91 for these activities. In total, $7.3 million will be spent on library services in 1990-91. Mr. Speaker, the government is committed to providing quality services to both linguistic communities. To strengthen our efforts in this area, an additional $300 000 in increased funding will be directed to the Translation Bureau of the Department of Supply and Services. The government has recently released its policy for providing quality services to both linguistic communities. An integral part of this policy is an increased commitment to second language training. In response to this commitment, the budget of the provincial language school will be increased by $500 000 in 1990-91 to hire more language instructors and to expand language training programs in Community Colleges. These measures will significantly increase our capacity for second language training in the public service. Additional funds from a federal/provincial agreement will also be allocated to the Department of Intergovernmental Affairs for the student exchange program, in order to foster greater understanding between our two limmistic communities. Mr. Speaker, this budget includes funds to widen our network of transition houses. My colleague, the Minister of Health and Community Services, will outline these commitments in greater detail during the discussion of the Main Estimates. I am pleased to announce, Mr. Speaker, the addition of $500 000 to the budget of the Department of Income Assistance to meet our commitment to extend the fuel supplement payments to the month of November. There are now six months in which the fuel supplement payments are made. This compares to only four months when we took office. Mr. Speaker, this budget provides $33 million in Loans and Advances and Ordinary Account expenditures for the New Brunswick Housing Corporation. Last year, this government introduced several new programs and expanded the budget for existing programs to help low-income families improve their housing conditions. These included the down payment assistance program, the home completion program, the emergency repair program and the rent supplement program. My colleague, the Minister Responsible for Housing, will be speaking later on the success of these initiatives. Mr. Speaker, I would like to note that funding for the provincial rent supplement program has been substantially increased. This year, we are adding another $368 000 for a total budget of$I.6 million. In addition, $200 000 has been added to the emergency repair program, for a total budget of $722 500. Mr. Speaker, the government of New Brunswick is committed to improving the quality of our environment and avoiding the severe environmental degradation that has occurred in many parts of the world. The improvements that we achieve in New Brunswick are important to the people of this province and they contribute in a small way to the betterment of our planet. Mr. Speaker, this government took an important step to improve management of environmental issues when it created a separate Department of the Environment with its own full-time minister. The government has also established the Premier's Round Table on Environment and the Economy, which has held a series of public hearings on environmental concerns. It is the intention of the government to continue to bring the public and industry together, not only to resolve environmental problems as they arise, but to also incorporate a preventive approach to maintaining the quality of our environment. Environmental problems can only be solved when everyone is committed to their solution. This includes the public and private sectors, as well as each and every individual New Brunswicker. In keeping with the government's commitment to improve its laboratory facilities, construction of a new $3-million analytical laboratory in Fredericton will begin in 1990-91. The laboratory will provide a major expansion of testing capabilities for the Department of the Environment and will be used to carry out all microbiological testing for the Department of Health and Community Services. Identifying and dealing with potential pollution problems before development takes place is the best way to protect our environment. To strengthen our capacity in this regard, $85 000 of new funding will be provided for additional staff resources to carry out environmental impact assessment studies in the Department of the Environment. This additional funding will improve the EIA process and will ensure the compatibility of economic development with environmental protection. Mr. Speaker, I earlier referred to the aquaculture program in New Brunswick and the fact that it has become a major contributor to the value of our fishing industry and will grow significantly in the years ahead. In response to the need for a clean environment at cage sites, $50 000 will be allocated to aquaculture operations in Dark Harbour, Lime Kiln Bay and Bliss Harbour, to prevent pollution of these sites. New funds will be directed to the development of a comprehensive hazardous waste management policy to enable the government to effectively respond to the dangers imposed by the storage and handling of hazardous wastes. To enhance the visual appearance of New Brunswick, the government will proceed with a vegetation and litter control program along our highways. One million dollars will be dedicated by the government to enhance the scenic value of New Brunswick highways. The government has invited NB Power and NBTel to participate financially in this program. Mr. Speaker, growth in Ordinary Account spending has been kept within the fiscal plan in the three budgets presented by this government. Because of federal cutbacks and the slower economy, it was particularly difficult in 1990-91 to expand funding in areas of priority and still stay within the plan. The government succeeded in this task by maintaining strict control of spending in 1989-90, and by careful management of the increases allowed in all areas of spending for 1990-91. In achieving this result, the government has asked a great deal of the managers across government. I thank them for the commitment to the government's objectives and I applaud them for the skill they brought to the task of managing their programs with limited funding. Success in expenditure management to date has been achieved by improved efficiency and by reducing spending in areas of low benefit in relation to cost. While it became apparent to the government that this approach yields savings, the government recognized that it was not enough. If future expenditure growth was to be kept within our ability to pay, something had to be done about the high cost of open-ended programs. I refer to programs where services are provided according to demand, and the government is obliged to pay the cost. Some of the most expensive open-ended programs are in the health care field. The government concluded that the only way to deal responsibly with these cost pressures was to adopt specific policies to slow the escalation in these expenditures without affecting the quality or availability of health care services. Mr. Speaker, Canada's health care system is the envy of many nations. It provides high-quality health care at no charge to the individual. However, the cost of this system has escalated rapidly, outpacing the growth of provincial revenues. At one time, the government of Canada paid a fixed 5.hare of the cost of the health care system. This is no longer the case. A succession of federal budgets has dramatically reduced the government of Canada's financial commitment to health care. The latest cutbacks delivered in the recent federal budget reduce Canada's contribution to New Brunswick's health and postsecondary education programs by about $70 million over the next two years. These two factors, a rapid increase in cost and declining federal support, pose a major challenge to the management of our health care system in the 1990s. The government is prepared to meet this challenge, but we will need the understanding and support of the public and service providers. Mr. Speaker, there are many issues to be addressed in the health care system. To help guide us in the task, the government is establishing the Premier's Council on Health Strategy. To be chaired by the Premier. The council will consist of the Minister of Health and Community Services, ministers of other departments whose policies and programs impact on health, various health professionals and private citizens. The council will provide for broad research and policy formulation in specific areas of health care, with the objective of providing quality services with the financial resources available. The McKelvey-Levesque Commission on Selected Health Care Programs identified a number of key issues and concerns, among which were: the open-ended characteristics of the Medicare and prescription drug programs; the fact that the number of physicians billing Medicare is increasing at a faster rate of growth than the population; the fact that provincial residents use inpatient hospital facilities significantly more than the national average, and the fact that New Brunswick exceeds the national average of hospital beds per thousand population. Mr. Speaker, in implementing the budget for 1990-91, the government had to take immediate steps to bring health care costs more in line with available financial resources. In the face of federal cutbacks, delaying action to later years would jeopardize our basic health care services. The Minister of Health and Community Services will provide details on measures that will be implemented in 1990-91 to manage the growth of health care expenditures. These measures will draw heavily on the recommendations of the McKelvey-Levesque Commission and experiences of other provinces. In addition to health care, Mr. Speaker, we have made other adjustments to programs in order to realize economies and continue our practice of responsible financial management. In spite of federal cuts in support of postsecondary education, this budget meets the recommendation of the Maritime Provinces Higher Education Commission in terms of grants to our universities. However, to slow growth in overall postsecondary education costs, minimal adjustments will be made in student aid. In 1990-91, the student loan limit will be increased by $60 to $3360 before issuing bursaries. The limit on student debt load after four years of study will be increased to $9000 as opposed to the current $8000. The Department of Tourism, Recreation and Heritage will offer several small provincial parks as concessions to private entrepreneurs and organizations. Attendance at these parks has fallen well below the feasibility level for operation by the department. For example, in one case the average occupancy rate was 8070, in another, 14070. Mr. Speaker, one of the serious problems that the government inherited is a very large unfunded pension liability for the public service superannuation plan and the teachers' pension plan. In a nutshell, commitments have been made to government employees to pay pensions, but sufficient funds have not been put aside to meet these obligations, most of which come due well into the future. Funds have been established to pay future pensions, but they are not big enough to meet commitments to the large number of public employees retiring over the next 20 to 30 years. The difference between the funds set aside to pay pensions and the amount required to pay them is the unfunded pension liability, estimated to be $1.6 billion as of March 31, 1990. If this obligation were included in our financial statements, it would have a significant impact. To illustrate, if the government were to adopt the accounting treatment of pension liabilities recommended by the Canadian Institute of Chartered Accountants, Ordinary Account spending would have increased in 1989-90 by $90 million. If this amount had been contributed to the pension funds; it would only have stopped the unfunded liability from growing. It would not have addressed how we meet the unfunded liability already incurred would be added to the provincial net debt. Following the recommendation of the ICCA, the government established a committee of ministers to review and assess the magnitude of the problem and develop options to deal with it. A report summarizing the committee's findings to date is appended to this speech. I urge honourable members to take the time to read it. In the face of other financial pressures, the pension problem will be very difficult to resolve. The paper notes that the unfunded liability issue has two dimensions. The first is that insufficient funds were set aside in the past to meet future pension obligations. The second is that current contributions to pension funds are not sufficient to cover pension commitments currently being made. The second dimension is mainly a problem with the teachers' pension plan in which contributions to the teachers' pension fund, by both employer and employees are short of what is required to provide funding for benefits currently being earned. It would require an annual payment of $122.8 million over the next 50 years to eliminate the unfunded liability and additional annual payments equal to 6.09070 of the teachers' payroll and 0.46 of 1070 of the public service payroll to bring current contributions up to the level to cover the cost of pension benefits currently being earned. The total payment required in 1990-91 would be about $146 million. Mr. Speaker, the paper outlines four areas for consideration in resolving the pension issue. These are: (I) increase employer contributions; (2) increase employee contributions; (3) reduce pension benefits, and (4) increase the earnings of the fund. Resolving the problem by increasing fund earnings is a painless solution, but not realistic given the magnitude of underfunding. The government has already begun to address the problem by increasing its contribution. In last year's budget, I announced that an additional $41.9 million would be added to the pension funds, which was over and above our normal contribution as an employer. In 1990-91, this additional amount will be increased to $44.1 million. While this additional contribution is a step in the right direction, a much larger financial commitment will be required to deal with the problem. The government is seeking a solution that is fair to employees who have chosen a career in the public service and to taxpayers who ultimately pay all government costs. The present government did not create the financial difficulties surrounding pensions, but we have an obligation to deal with them. Although the actual financial crunch on pensions will not occur until present funds are exhausted in 20 to 30 years, we must act soon so the cost can be spread out more fairly and evenly over an extended period of time. The most significant revenue issue the province will face in the coming fiscal year is the introduction of the federal goods and services tax. The imposition of the 71% federal goods and services tax-GST on January 1, 1991 represents a watershed in the Canadian tax system. The presence of the federal government in the sales tax field has serious implications for the province's tax structure. In the short term, the province will be forced to adjust its gasoline, motive fuel, and liquor and tobacco taxes to ensure that provincial revenues are not adversely affected. Furthermore, the introduction of the GST has forced the province to review its own sales tax system and its interaction with the federal system. This review will be completed over the coming months. The introduction of the federal goods and services tax will also have long-term implications for New Brunswick's tax system. The province relies heavily on consumption taxes such as sales, gasoline and tobacco taxes, as do all the Atlantic Provinces. In New Brunswick's case, consumption taxes amount to about 37,1% of our own source revenue. Our sales tax alone amounts to about 29,1%, or $666.7 million. Over the last several years, the federal government has significantly increased its reliance on consumption taxes. The introduction of the federal goods and services tax represents a continuation of this trend. This shift in the federal focus will have serious implications for New Brunswick's ability to maintain revenues from its consumption taxes. Over the last several months, there has been pressure by business, consumers and special interest groups to adopt a uniform sales tax system. Many national and provincial groups, including the Canadian Manufacturers' Association, the Canadian Federation of Independent Business, the Retail Council of Canada, the Conseil économique du Nouveau-Brunswick and the New Brunswick Institute of Chartered Accountants have all expressed their desire to have a unified tax system. Given that the federal government's GST will apply across the nation, any joint sales tax system is likely to be modeled after the goods and services tax. New Brunswick considers renewed discussions on the GST with the federal government essential for the good of the country; therefore, it was encouraging when the federal minister agreed to renew discussions with the provinces. Initially, these discussions will focus on the complex issues surrounding the GST and its interplay with existing retail sales taxes. The discussions will also look at the issues surrounding the application of the GST to the government sector, including municipalities, universities, schools and hospitals. These discussions represent a positive step, and I hope they prove to be beneficial for all Canadians. In the 1989 budget, the normal retail price of cigarettes for the purpose of determining a tobacco tax was expanded to include the retail sales tax. This initiative was, in part, a response to increased representation from health groups and concerned citizens. The Auditor General has determined that the quarterly price surveys used to establish the normal retail prices did not properly measure the retail sales tax component. This error only affected tailor-made cigarettes, not fine cut tobacco or cigars. As a result of this problem, the government inadvertently collected approximately $2.3 million too much in tobacco tax in fiscal 1989-90. The only way the government could compensate individuals for this error would be to lower the tax for a period of time. This would lower tobacco prices and encourage smoking. Consequently, the government has decided to amend the Tobacco Tax Act retroactively to establish the tax per cigarette at the rates set by regulation as of April 1, 1989; July 1, 1989; October 1, 1989; and January 1, 1990. The recently completed price survey, scheduled to come into effect on April 1, 1990, correctly measures the retail sales tax component of the tobacco tax base, so this problem will not recur. However, based on this price survey, the tax per cigarette would have fallen from 6.804$ to 6.664$. In order to ensure that the province's revenues from this source are not adversely affected, the ad valorem tobacco tax rate will be increased to 51 070 from 50 000 this will set the tax per cigarette at 6.794 which is approximately the same per cigarette levy that applied in the previous quarter. Both the price survey and the rate increase become effective on April 1, 1990. The problems with video gaming devices have become a matter of concern to a number of citizens. The government of New Brunswick shares these concerns and plans to address the problems through effective control and regulation of these machines. Details of the program will be announced at a later date. It is expected that these measures will provide additional revenue to the province, which will be allocated to the new environmental trust fund. In this budget, I am announcing an increase in the guarantee fee applied to the debt of the New Brunswick Electric Power Commission. This fee was introduced in the 1988-89 budget, to ensure that the taxpayers of New Brunswick were compensated for the province's guarantee of Power Commission debt. The debt guarantee fee will be set to generate $12 million in fiscal 1990-91. Mr. Speaker, the 1990-91 budget will meet the challenges in the year ahead and continue the progress we have made in terms of strengthening our economy and improving services for New Brunswickers. The 1990-91 budget reaffirms and builds on our commitment to creating jobs for our citizens. It provides resources to continue the job of developing our economy and creating employment opportunities. The 1990-91 budget broadens our commitment to education and training and ensures that resources will be available so that New Brunswickers will have the skills needed in the decade ahead In 1990-91, resources will be provided to build on our efforts to protect and enhance the environment. This budget increases spending on environmental programs and addresses a number of environmental issues of importance to New Brunswickers. In the 1990-91 budget, funds have been provided to improve government services, and we have allocated funds for important new initiatives that will improve access to services for New Brunswickers. With Ordinary Account revenues of $3754.7 million and Ordinary Account expenditures of $3751 million, the Ordinary Account is budgeted to have a surplus of $3.7 million in 1990-91. This will be the third consecutive year that New Brunswick will not increase its debt to pay for day-to-day spending. Combining the surplus on the Ordinary Account with net capital spending and the special purpose account, the budgetary deficit is budgeted at $294.1 million for 1990-91. With net loans and advances of $41.5 million and adjustments for provision for losses and depreciation, financial requirements will be $381.2 million. With sinking fund earnings of $146 million, net debt is budgeted to increase by $148.I million in 1990-91. Mr. Speaker, the 1990-91 budget continues the policy of responsible financial management that this government has practiced since assuming office. The government remains committed to the policy of balancing the needs of New Brunswickers with our ability to pay. In the 1990-91 budget, we are reaping the benefits of that policy. Since we have been able to realize significant interest savings, we will be able to budget more of our revenues for programs and services again this year. This means that we will be able to increase spending on programs and services by 7070 in 1990-91, which is a higher rate of growth than ordinary spending in total. As well, Mr. Speaker, we have gained the flexibility to increase capital spending on the Trans-Canada Highway and connecting links to Saint John. In short, Mr. Speaker, our past policies have given us flexibility to face the challenges brought about as a result of a general slowdown in the economy and cutbacks in funding from the federal government. We will face the year ahead with no major cutbacks in services. Mr. Speaker, our record in financial management will stand the test when compared to any jurisdiction in Canada. In 1990-91, the budget will build on this record and at the same time ensure that New Brunswickers are provided with the programs and services that are needed as we enter the decade of the nineties.