Province
Législature
Session
Type de discours
Date du discours
Locuteur
Fonction du locuteur
Parti politique
Ontario
37e
3e
Discours du budget
17 juin 2002
Janet Ecker
Minister of Finance
Progressive Conservative Party of Ontario
Mr. Speaker, I am pleased to table today Ontario's fourth consecutive balanced budget. This government is keeping its promise of growth and prosperity for Ontario. On February 14, 1967, the first Ontario Treasurer to come from Exeter, the Honourable Charles MacNaughton, described the challenge facing all Provincial Treasurers. In preparing a budget, he said, "We tread the slender tightrope between the reasonable expectations of our people for government services- and a constant awareness of the burdens on the taxpayer." Thirty-five years later, Mr. Speaker, the second Ontario Treasurer to come from Exeter has developed a keen appreciation in the last few weeks for the meaning of those words. While much has changed in Ontario since 1967, the essential task of preparing a budget remains the same. A keen sense of balance is still required, between meeting today's needs and investing for tomorrow's challenges.
Mr. Speaker, budgets are also about values and choices. As I learned growing up in Exeter, values come from families and communities-from the people who live those values with quiet strength and perseverance. Values such as setting personal goals, and working hard to achieve them. Pursuing education as the key to opportunity. Respecting the rights of others while accepting our own responsibilities. Valuing and protecting our natural heritage and environment. Standing up for what is right. Answering the call of your community through public service, volunteerism and personal commitment. And sharing the fruits of your own success with those who need help.
Mr. Speaker, these are the values that built this province, that made it strong. They are the same values that motivated our government when we promised to return Ontario to prosperity in 1995. While our predecessors preferred to carve a shrinking pie into ever-smaller pieces, the Common Sense Revolution chose to make the pie bigger. We placed this province on the path to increased growth. The people of Ontario know that prosperity is a virtuous circle. That a growing economy provides more and better jobs, more disposable income and more revenue to invest in our future-in turn renewing economic growth and creating even more prosperity.
Mr. Speaker, this government has kept its promise. By cutting taxes to create jobs. By removing barriers to growth. By balancing the budget and paying down debt. By helping people off welfare and into jobs. By strengthening our universally accessible health care system. By making significant infrastructure investments for the future. And, most importantly, by setting higher standards in education to equip Ontario's students with the knowledge and skills they need for success in the global economy.
Mr. Speaker, the evidence is now clear. Because we put the right fundamentals in place, our plan for prosperity is working. The numbers that chart our progress are impressive. But the real improvements are in people's everyday lives. The young family buying their first home. The recent graduate getting a great job. Businesses expanding and creating new jobs at home, and finding success in foreign markets. The opportunities that people have today that didn't exist in 1995.
Making progress since 1995
• 893,000 new jobs have been created in the past seven years.
• Approximately 600,000 of our fellow citizens have been helped off social assistance since June 1995.
• Our tax cuts for people will allow taxpayers to keep more of their hard-earned money-a family of four with $60,000 of net income from two earners will save $2,005 in Ontario income tax this year.
• Real take-home pay has increased by 18.5 per cent since we began cutting taxes.
• Tax revenues to pay for programs and services are up by nearly $14 billion.
This was the vision of the Common Sense Revolution-that Ontario could become the best place to live, work and raise a family. We have accomplished much, but there is clearly more to do. And that's why we are sticking with the fundamentals of our plan. This Budget is about how we intend to do that, based on what the people of Ontario have told us needs to be done.
Mr. Speaker, while the Minister of Finance must take ultimate responsibility for the Budget, it is truly the work of many capable hands. I want to thank Premier Ernie Eves for his clear vision and leadership. We owe much of today's prosperity to the bold and courageous steps he took to restore confidence and growth in this province, over six years as Minister of Finance. I am also indebted to my caucus colleagues, especially my immediate predecessor, Minister Jim Flaherty; to the Chair of Management Board, David Tsubouchi; to my Parliamentary Assistants, Marcel Beaubien and Ted Chudleigh; and to the many members of the Legislature who have offered advice and counsel to me over the past few weeks. As I have learned over the past 64 days, the Ministry of Finance is staffed by highly capable and professional people. They are led most effectively by my Deputy Minister, Bob Christie. He and his hard-working staff have been most helpful to a new Minister and I am deeply grateful for their advice. I would like to thank my personal staff whose many contributions and long hours of dedication are ably co-ordinated by my Chief of Staff, Scott Andison. 
Finally, Mr. Speaker, I want to thank my husband, Derek Nelson, for his patience, understanding and support.
ONTARIO'S FISCAL CHALLENGE
Mr. Speaker, I'd like to deal first with the fiscal challenge we face this year. Because Ontario's economy is open and trade-oriented, the global economy of 2001 is our starting point.
During the past year, our largest trading partner, the United States, experienced a sharp economic slowdown. U.S. real economic growth slowed from 4.1 per cent in 2000 to 1.2 per cent in 2001. Key building blocks of our economy-most notably the automobile and telecommunication equipment sectors-were hard hit by the sharp reduction in demand in world markets and by the terrorist attacks in the United States. Exports fell more last year than in the recession year of 1991. The result was that after four consecutive years of annual real growth exceeding five per cent, Ontario's economy grew by just one per cent in 2001. In last year's Budget, growth was forecast to slow, and we provided a fiscal plan that responded to this situation. After September 11, we took further action to restore consumer confidence by accelerating tax cuts. Coupled with prudent management and the use of our $1 billion reserve, we balanced the budget last year-for the third year in a row. We were also able to make an additional $127 million payment on Ontario's accumulated debt. This brings our total debt repayment to $4.2 billion, almost 85 per cent of the target we set for ourselves to reduce the mortgage that past governments have left our generation.
Mr. Speaker, Ontario's economy is rebounding sharply, but our revenues this year are still reflecting last year's slowdown. The fall in exports and the competitive pressures that led to lower prices caused corporate profits in Ontario to fall nearly 13 per cent in 2001, with little expectation of an upturn this year. Lower economic growth last year and continued weak stock markets mean that our largest tax source, the personal income tax, is forecast to decline slightly in 2002-03. There is another important factor in Ontario's fiscal challenge-some specific federal policies. First, Ontario and all provinces are being short-changed because the Canada Health and Social Transfer (CHST) has failed to keep up with rapidly rising health care costs, the expansion of post-secondary education and the need to protect the most vulnerable people in our society. Second, continued federal overtaxing of Ontario workers and employers through excessive Employment Insurance premiums heavily burdens Ontario's growth, and penalizes this province for having a strong economy.
What this means, Mr. Speaker, is that while Ottawa continues to collect more taxpayers' money than it requires to meet its obligations, the provinces continue to struggle with the growing costs of the programs that mean the most to our people-health care and education. This is not a healthy situation for Canada. Ontario is the largest driver of national economic growth. We recognize and accept our responsibility to make significant contributions to equalization payments to help other provinces. But if our growth is slowed by federal policies and decisions, the impacts are felt across the country. The cumulative impact of all of these factors presented us with a challenge-to develop a balanced fiscal plan in the face of little revenue growth and growing program needs.
CHOOSING PROSPERITY
Mr. Speaker, in the face of this challenge, we know that the sound path we have established over the past seven years is still the right one to follow. This government will continue to make choices that encourage prosperity.
Tax cuts are central to the plan
Our government has pursued an aggressive tax-cut plan for one very simple reason. Tax cuts work. We will continue with tax cuts because we want to take even more steps to promote prosperity in this province. Over the coming months, I will be seeking advice with a view to announcing in next year's Budget a new multi-year tax reduction plan, including the next steps towards eliminating the capital tax and Ontario's income tax surtax. In the meantime, because of our short-term fiscal situation, I propose to introduce legislation to delay, for one year only, the current planned reductions in personal income tax and in the general and manufacturing rates of corporate income tax, and the next step of the Equity in Education Tax Credit. We will also delay by one year planned reductions in education property tax rates. Because nearly half of new jobs are created by small business, we will continue the corporate tax rate reductions for small businesses as currently scheduled. Due to the importance of mining to the northern Ontario economy, we will continue with our planned reductions in the mining tax rate. To help people remain in the workforce, I will table legislation to remove another 50,000 people from the income tax rolls through enrichment of the Ontario Tax Reduction program. This means 745,000 Ontarians would not pay any provincial income tax whatsoever; yet these same Ontarians will continue to pay an estimated $375 million a year in federal income tax. We believe taking modest-income Ontarians off the tax rolls is the right thing to do. We encourage the federal government to follow our lead.
Proposed Plan for Continuing Ontario Tax Cuts
January 1, 2003
• enrich Ontario Tax Reduction program
• cut small business corporate income tax rate to 5.5%
• cut mining tax rate to 12%
April 1, 2003
• cut Retail Sales Tax (RST) rates on automobile insurance premiums and repairs and replacements made under warranty to 1%
January 1, 2004
• cut first personal income tax rate to 5.65%
• cut middle personal income tax rate to 8.85%
• eliminate 20% surtax for taxpayers who only pay the first tier surtax
• implement second half of the 20% residential education property tax cut
• cut general corporate income tax rate to 11%
• cut Manufacturing and Processing (M&P) corporate income tax rate to 10%
• cut small business corporate income tax rate to 5%
• cut mining tax rate to 10%
• implement 50% of the remaining business education property tax cut
• increase Equity in Education Tax Credit rate from 10% to 20%
April 1, 2004
• eliminate RST on automobile insurance premiums and repairs and replacements made under warranty
January 1, 2005
• cut general corporate income tax rate to 9.5%
• cut M&P corporate income tax rate to 9%
• cut small business corporate income tax rate to 4%
• complete business education property tax cut
January 1, 2006
• cut general corporate income tax rate to 8%
• cut M&P corporate income tax rate to 8%

Mr. Speaker, tobacco taxation is an important part of our efforts to discourage young people from smoking and to provide more resources for health care. I propose to increase tobacco tax by $5.00 per carton, in partnership with the federal government and concurrent with actions by the Governments of Quebec and New Brunswick. The combined price effect in Ontario of this change will amount to over $9.00 per carton. I also propose to amend the structure of tobacco taxation by exempting tobacco products under the Retail Sales Tax Act and recovering the revenues through an equivalent increase in rates under the Tobacco Tax Act. This restructuring will help to reduce tax evasion and allow us to collect tobacco tax more effectively.
Efficient, effective and more accountable government
Mr. Speaker, prudence and frugality in its own operations are important contributions that government can make to prosperity. That's why we've pursued a consistent course-tight fiscal discipline, balanced budgets and debt reduction-in order to provide more resources to priority areas.
"The people of Ontario expect their government to live within its means...we are finding savings in every area of government activity. The government is making the same difficult decisions and adjustments that we have all had to make at home, at work and in our everyday lives."-Finance Minister Ernie Eves, 1996 Budget
We have focused on the most efficient and effective delivery of government programs and services. The result has been that, excluding health care and education, real program spending per person is down by close to 30 per cent since 1995-96. We will continue these efforts because we cannot afford to put our hard-won fiscal discipline at risk. Effective this year, our business planning process incorporates zero-based budgeting principles. Every ministry is now required to review all of its program spending over a four-year cycle to determine program effectiveness, efficiency and value for money. We're taking the process further. Minister Tsubouchi has established a Parliamentary Assistants' Committee on Program Evaluation, chaired by Julia Munro, Member for York North. Through its government-wide review, this committee will identify resources for re-direction into priority areas.
Members of the Parliamentary Assistants' Committee on 
Program Evaluation
Julia Munro, Chair, Member for York North
Frank Mazzilli, Member for London-Fanshawe
Marilyn Mushinski, Member for Scarborough Centre
Garfield Dunlop, Member for Simcoe North
Wayne Wettlaufer, Member for Kitchener Centre
We will also begin this year to depreciate assets in the same way that a business does, as recommended by the Ontario Financial Review Commission (OFRC), the Provincial Auditor and Rob Sampson, Member for Mississauga Centre. This will enable us to determine the true cost of delivering government services and improve our resource allocation.
I also propose to amend legislation to convert legislative spending authority and appropriation control to the accrual basis of accounting, effective the fiscal year starting April 1, 2003. This means that Ministry Estimates will be accounted for on the same basis as the Budget, as recommended by the OFRC and the Provincial Auditor.
Mr. Speaker, in the next year, we will begin to provide more stability and certainty for our public-sector partners by moving towards a multi-year approach to budgeting and funding. We will also look for better ways to incorporate information on results so that users, decision-makers and taxpayers can hold the government and its partners accountable for delivering on their goals and objectives.
Finally, Mr. Speaker, we will table next year's Budget before the start of the fiscal year, and this should assist all public-sector organizations to plan and manage more effectively.
Mr. Speaker, these initiatives may not be the stuff of headlines, but they are the hallmark of a government with a profound respect for transparency and taxpayers' dollars.

Getting better results for taxpayers from public assets
Mr. Speaker, another step is to ensure that government's services and benefits from public assets are provided effectively, efficiently, fairly, safely and in a way that is transparent and accountable to taxpayers. In some cases, these objectives can only be accomplished through government ownership and direct operation of public assets. But around the world, there is growing recognition that providing benefits to people and businesses no longer requires government to be the sole provider of almost any modern service. In many cases, the role for government is to provide a strong regulatory framework and controls to protect the public interest. In the 1900s, the public need in Ontario was electrical power at cost, all across the province. This vision of Sir Adam Beck and successive generations transformed Ontario into the industrial colossus that it is today. But what started out as power at cost became power at any cost. And the real cost was masked by an approach that priced power below cost. Now our generation has been handed the bill, a staggering debt of $38 billion. Measures to pay for these past costs are being implemented. For example, the Debt Retirement Charge is paying down residual stranded debt in a prudent way over time. We have also taken steps to meet the needs of a growing economy for reliable power at an affordable price. The open electricity market promotes competition and consumer choice. The old Ontario Hydro has been separated into distinct generation and transmission companies. A new regulatory body-the Independent Electricity Market Operator-and a strengthened Ontario Energy Board oversee the market. Hydro One remains part of this plan. As a result of consultation, the control of Hydro One will remain in public hands, while the government seeks the best method to bring in much-needed private-sector discipline and new investment to upgrade our electricity distribution and transmission infrastructure. Public-sector regulation will continue to ensure that ratepayers are protected. Further steps will be taken. Through SuperBuild, we continue to review other assets of the government, including power generation capacity, government land and buildings, and the government's interest in Teranet, with a view to improving service and increasing returns. This government's continued commitment to responsible management of our public assets will yield substantial dividends for taxpayers.

INVESTING IN THE MOST IMPORTANT PRIORITIES
Mr. Speaker, since 1995 this government has invested in those priorities that respond to people's needs and encourage growth, jobs and prosperity.
In this Budget, we are choosing to make major investments in health care, education, and a clean and safe environment-important investments in the well-being of Ontarians, our quality of life and our future prosperity. This Budget provides an additional $1.7 billion in health care operating spending this fiscal year, over $500 million for schools and post-secondary education, and commits half a billion dollars in investments for clean, safe drinking water. We are also increasing SuperBuild's priority infrastructure capital investments. Overall program spending excluding expenditure on health care, education and the environment will decline by two per cent.
Dependable health care for Ontarians
Mr. Speaker, let me provide further details. First, on health care. Universally accessible health care is central to Ontarians' quality of life, and a key part of why people want to live and work in Ontario. People want a health care system they can count on when they need it; a health care system that promotes healthy living and wellness; a system that provides access to timely, accurate diagnosis and treatment; that ensures the availability of nurses, doctors and other caregivers. We agree. Since 1995, we have worked relentlessly to build a modern, integrated health care system that can provide accessible, high quality health services for all Ontarians. New investments are part of this. In 1995-96, health care operating spending was $17.6 billion. This year, it is $25.5 billion, a 7.3 per cent increase over last year. This includes a 7.7 per cent increase for hospitals. These increased investments are making a real difference-from increased access to diagnostic services, to improved emergency rooms, to more long-term care beds.
Making a difference in health care
• The number of MRI machines in Ontario has increased from 12 to 43.
• 20,000 new long-term care beds are coming on stream.
• Increased funding for cardiac care means an additional 61,000 heart procedures performed since 1995.
• Dialysis services are available to 3,240 more patients.
• Hospital emergency rooms have been expanded and upgraded to provide quicker service.
• Ontario has North America's first free, universal influenza vaccination program, providing five million doses annually.
These investments will also improve cancer care. Today, I am pleased to announce increased funding of $50 million over three years to enhance the Ontario Cancer Research Network, doubling the number of patients who can benefit from this research. In addition, we will provide $40 million for new therapies and treatment techniques, and $30 million to modernize and upgrade cancer radiation equipment.
Highlights of 2002-03 health care investments
• Support for hospitals to increase by 7.7 per cent to $9.4 billion, allowing for the expansion of priority programs such as cardiac services, dialysis and MRI scans.
• Over $250 million in additional funding for diagnostic services and payments to physicians and other practitioners, including alternative funding agreements negotiated with physicians.
• Nearly $200 million to support residents in long-term care facilities and to continue the expansion of long-term care beds.
• $50 million by 2005-06 to support the collaborative degree program in nursing education.
• $14 million by 2005-06 to support the expansion of undergraduate medical school enrolment by 160 first-year spaces.
My colleague, Tony Clement, the Minister of Health and Long-Term Care, will provide details of further improvements to priority programs, hospitals, long-term care facilities, and nursing and medical programs.
Improving health care in underserviced areas
• New northern medical school in Thunder Bay and Sudbury to train more doctors and encourage them to build their professional lives in the North.
• Double the number of nurse practitioners in Ontario.
• Free medical school tuition for new doctors willing to practise in underserviced areas.
• Northern Physician Retention Initiative provides eligible physicians with a retention incentive for each year they practise full time in the North.
• NORTH (Northern Ontario Remote Telecommunications Health) Network provides medical consultations and continuing medical education to rural northern Ontario communities via two-way television.

Mr. Speaker, we face major challenges for new capital investment in hospitals and other health care facilities, even though we have already invested $2.5 billion to expand, modernize and build new hospitals, and to support community health infrastructure. Today, I am announcing an additional $342 million for health capital, an increase of almost 70 per cent over last year. But while we recognize the need for more capital investment, we also recognize the need to improve how it is invested, where it is invested and the timeliness of those investments. I am therefore announcing that the government will commission a Health Capital Planning Review. It will make recommendations jointly to me and Minister Clement, on ways to streamline the government's health capital planning process, measure outcomes based on performance, and clarify accountabilities. Representatives from the health care community and the private sector will be consulted as part of the Review.
Mr. Speaker, we will continue investing in health care, but new money alone will not solve the challenges that face us. If we want to strengthen the system and improve its quality, and maintain the principles of the Canada Health Act, as we do, then we must continue to innovate, to renovate, to reform how we deliver services and invest in health care alternatives that work. As Premier Eves said in his 2000 Budget, "The amount of money that government spends is not the only measure of good health care. Sustaining the quality of care that Ontarians deserve requires restructuring and reforming our health care system to keep up with new technology and meet the challenges of a growing and aging population."
Reform and innovation in health care
• Ontario's pioneering TeleHealth system offers quality advice on a round-the- clock basis across the province to an average of 3,500 Ontarians each day.
• Family Health Networks ensure that services are consistent with a reformed primary care system.
• Funding telemedicine initiatives in 140 hospital sites across Ontario.
• Support for innovative new partnership opportunities between service providers to improve accessibility to diagnostic services like MRI and CT scans.
• Created the Ontario Cancer Research Network to support research into new cancer treatments.
Mr. Speaker, this challenge is not unique to Ontario. It is shared by all provinces. New treatments, new drugs, new technologies, an aging population, increased expectations and pressure for consumer choice are all increasing costs beyond the ability of provinces to pay, are fuelling demands for reform we cannot undertake on our own. These are challenges that no province can meet alone. The federal government, the provinces and service providers must all be part of the solution. Across Canada, health care spending continues to rise at over five per cent per year. Meanwhile, the federal government's contribution is less than it was in 1994-95, when total cash transfers were equal to 18 per cent of health, education and other social program spending. Last year, CHST cash transfers totalled only 14 per cent of spending in these areas. For Ontario, this is a shortfall of $2 billion in federal support for health care this year.
Mr. Speaker, we all hope that the Romanow Commission's report contributes to a stronger future for health care. But, regardless of its findings, we already know that health care has to be a shared national priority-for resources and for reforms that will improve the quality of health care outcomes. Ontarians, indeed all Canadians, express their nationalism through their belief in our universally accessible health care system. Our government shares this basic faith and its citizens' values. Ontario remains willing to work with the federal government, other provinces and our health partners to implement the needed reforms that will secure this vision.
Education and skills training for the future
Improving student learning in our elementary and secondary schools
Mr. Speaker, a quality education and lifelong learning are the most fundamental building blocks of future prosperity. Excellence in education is the key to ensuring that every young person in Ontario has equal access to opportunity, no matter where he or she lives.
"Education is not all bricks and mortar nor does it revolve entirely around dollars and cents. What is important and must be kept in the forefront of all our planning is the student. Education, to be fully effective, must begin in infancy and be carried on through life. We in government, our educators and you as parents, taxpayers and citizens must realize that the continued progress of our society is largely dependent on the quality of education we provide to our children." -Premier John P. Robarts, 1966
Parents, employers and post-secondary institutions all told us that public education had to improve, that Ontario needed to do better. Since 1995, our government has been putting in place a comprehensive plan to improve student learning and achievement.
The key elements of our plan include:
• A new, more rigorous curriculum from kindergarten to the end of high school that sets high standards for students.
• Province-wide tests that now report regularly on how well students are meeting standards.
• Improvement strategies that respond to test results, such as the Early Reading Strategy to raise reading skills in the early grades, and the requirement that elementary schools now set improvement targets for higher achievement in early reading.
• Comprehensive standards for teachers' ongoing professional development, performance appraisal in the classroom and an entry-to-the-profession test for all beginning teachers, to ensure they all have the most up-to-date skills and knowledge.
This plan is working. Student achievement is improving in both national and international tests. It is essential that we build on these successes. That we continue to invest in improvements in student achievement. That the public education system become more accountable for results.
"In the long run, the key to public support is the education system's commitment to continuous improvement and accountability for results." -Task Force on Effective Schools, 2001
This spring, Premier Eves announced an additional $65 million for school boards, specifically targeted to purchase textbooks and technology-based learning materials. We also provided a $25 million investment for 2002-03 to expand the highly successful Early Reading Strategy from Grade 3 to Grade 6 and to introduce an Early Math Strategy from junior kindergarten to Grade 3. To keep this focus on school improvement and higher student achievement, I am announcing several new initiatives. To further support improved student learning, I am pleased to announce the creation of the Student Achievement Fund. This $20 million Fund will begin by providing $5,000 to every elementary school principal whose school meets or exceeds its student literacy goals in Grade 3. The principal, in consultation with the School Council, will be able to invest in their local initiatives that further improve student learning in that school. Ontario has many excellent and dedicated teachers. And while we have set higher standards for teacher performance and professional development, we also believe that our teachers deserve support in their ongoing efforts to continue learning and upgrading their skills. In the coming year, we will provide $10 million in one-time funding to develop further professional learning resources for teachers and principals. We will also invest $5 million in 2002-03 to extend the Early Math Strategy from the Grade 3 to the Grade 6 level and to enhance the teaching skills of elementary school teachers in this area. Improved teaching skills will help students meet the higher standards of the new curriculum.

Investing in Special Education
• Special Education is a priority for this government. Funding for Special Education has increased by 17 per cent since 1998-99 to $1.4 billion.
• To address the issue of delays in obtaining Intensive Support Amount (ISA) assessments for special needs children, an additional $10 million will be provided to enhance access to ISA assessments in 2002-03.
Mr. Speaker, every day 800,000 Ontario children ride school buses to school, so it is essential that our school bus system be both safe and efficient. Today, I am pleased to announce that an additional $20 million annually is being committed to assist with student transportation costs. This will support the further development of a new approach to student transportation funding that will ensure school boards work together to provide safe and efficient transportation for their students. I am also pleased to announce that we are taking action to upgrade and renew our school facilities, starting with the most pressing needs. This involves two related initiatives. First, we are making a commitment of $17 million over two years to work with school boards to assess school renewal needs across the province and to identify the most important investment priorities. Second, we will also provide an ongoing increase of $25 million in school renewal funding to enable boards to make urgently needed repairs and renovations. This is in addition to the previously announced $6.5 million for nine school boards facing prohibitive repair costs. Finally, Ontario will invest $10 million this year to upgrade provincial schools for children with disabilities.
Mr. Speaker, the initiatives that I have announced today will increase our commitment to public education by an additional $45 million for the 2002-03 school year and will add $45 million to address additional education priorities in the current fiscal year.
Mr. Speaker, earlier this spring, my colleague, Elizabeth Witmer, the Minister of Education, announced a significant increase of nearly $350 million in student-focused funding for the coming school year. In fact, education funding has increased from $12.9 billion in 1995 to $14.3 billion this year, an increase of 11 per cent, which is greater than the increase in enrolment over that time period. Our government introduced student-focused funding in 1998. It ties education funding to enrolment and student need instead of the local property tax base. There are no more "rich" school boards and "poor" school boards, and students have equal access to education wherever they live. It also ensures that less is spent on administration so that more can be directed to the classroom. While student-focused funding has accomplished much, Ontarians have told us they want to be sure that the formula is investing resources where they are needed most. For that reason, the Throne Speech announced the appointment of Dr. Mordechai Rozanski, President of the University of Guelph, to review the formula. Minister Witmer released the terms of reference for this review last week.

Mr. Speaker, on November 3, 2000, Premier Mike Harris launched Ontario's Promise-the Partnership for Children and Youth. It is based on Ontario's long tradition of volunteer spirit and community service. It supports our children by mobilizing individuals, families, youth organizations, schools, business and government to work together in a unique partnership to keep five promises to our young people:
• A healthy start;
• An adult who cares;
• Safe places to learn and grow;
• The tools to succeed; and
• A chance to make a difference.
To date, over $39 million has been committed from Partners of Promise. The Ontario government is continuing its support for this initiative as Mr. Harris, who is now the Chair of the Ontario's Promise Board, works to expand partnerships with the private and not-for-profit sectors to help children and families.
Further investments in universities and colleges
Mr. Speaker, because we live and compete today in a global, knowledge-based economy, post-secondary education is central to our future prosperity. It plays a critical role in improving Ontario's natural advantage-our highly skilled workforce and the diversity of our population with its contacts all over the world. To expand and improve post-secondary education, we have been investing in new buildings and labs, new research funding, new capital and new advanced skills initiatives like the Access to Opportunities Program. In anticipation of increasing post-secondary participation and the arrival of the "double cohort" of secondary-school graduates at our institutions in 2003, we invested more than $1 billion to create over 73,000 new student spaces in our colleges and universities through SuperBuild. This is the largest infusion of capital dollars since the Robarts and Davis governments created Ontario's modern post-secondary education system. Universities and colleges have committed to making another 36,000 spaces available through operating improvements. As part of our plan to expand post-secondary capacity, the budget bill I am tabling today includes the establishment of the University of Ontario Institute of Technology in Durham. This new institution would provide innovative and responsive training that would allow students to earn a degree, diploma or other credential, depending on their program of choice.
New Investments in Post-Secondary Education

A space for every student
• Increased operating grants by an additional $75 million, reaching $368 million by 2003-04 to address higher enrolment.
• $16 million operating enhancement to northern and rural colleges and universities.
Meeting skills shortages
• $50 million by 2005-06 to support collaborative degree programs in nursing education.
• $50 million over five years for state-of-the-art equipment and learning resources through the College Equipment and Renewal Fund.
• $25 million annually by 2005-06 to further expand apprenticeship and training.
• $14 million by 2005-06 to support the expansion of undergraduate medical school enrolment by 160 first-year spaces.
Enhancements to student assistance
• The Province will consult with students, colleges and universities on designing the second phase of the Ontario Student Opportunity Trust Fund so that it can assist 400,000 students over the next decade.

Last year, we made a multi-year operating grant commitment to support the expected increase in enrolment. But revised projections show a greater-than-anticipated enrolment over the double-cohort period. So we are increasing our previous multi-year funding commitment to colleges and universities by $75 million, raising it to $368 million by 2003-04.
Mr. Speaker, we need more student spaces to accommodate the higher-than-expected enrolment increase. I am therefore announcing that SuperBuild will work with my colleague, Minister Dianne Cunningham, and the Ministry of Training, Colleges and Universities to invite a new round of post-secondary SuperBuild proposals. We will be seeking the most cost-effective and creative financing proposals to increase the number of student spaces in the areas where they are needed. We are committed to continuing our partnership with our post-secondary institutions to ensure that there will be a place for every willing and qualified Ontario student.
"This bill... provides for the establishment and operation of a system of colleges of applied arts and technology....This development is another step towards the fulfillment of our efforts to expand and redesign our schools and universities to meet more adequately the changing demands of very challenging times."-Honourable William G. Davis, Minister of Education, 1965, announcing the creation of Ontario's community college system
Mr. Speaker, the 25 colleges of applied arts and technology graduate skilled workers from campuses in more than 100 Ontario communities. They play a pivotal role in teaching the technical skills for hundreds of occupations in our economy. To help colleges deliver on their role, we are establishing the College Equipment and Renewal Fund. Over the next five years, the Fund will provide $50 million to colleges to support the acquisition of state-of-the-art equipment and learning resources. We also recognize that northern and rural colleges and universities face financial challenges due to economies of scale and geography. To provide fairness and equity, we will provide $10 million annually in additional operating funds to northern colleges and those serving rural communities, and an additional $6 million annually to northern universities. Lack of financial resources should not limit the opportunity to gain a post-secondary education. The Province will consult with students, colleges and universities on designing a second phase of the Ontario Student Opportunity Trust Fund so that it can assist 400,000 students in attending colleges and universities over the next decade.
Expanding apprenticeship and training options
Mr. Speaker, the government has modernized our apprenticeship system and increased funding by nearly 50 per cent. In 1996, the federal government agreed to devolve primary responsibility for training to the provinces, along with nearly $2 billion from Employment Insurance funds to pay for employment programs. Six years later, Ontario is the only province where the federal government has refused to sign an agreement. We continue to urge them to sign the Labour Market Development Agreement. Signing of the Agreement would allow Ontarians to access almost $600 million in apprenticeship and skills training funds.
"Stakeholders believe strongly in the value of OYAP (Ontario Youth Apprenticeship Program) and support the government's commitment to double the number of new apprentice registrants, thereby increasing the number of OYAP opportunities."-Garfield Dunlop, MPP, Report on Technological Education in Ontario's Public Schools: Contributing to a Skilled Workforce, 2002
With or without an Agreement, however, Ontario must continue to improve our training system and expand the apprenticeship model to new skills areas. We will therefore make further investments in apprenticeship of $5 million this year, rising to $25 million by 2005-06, to provide training for 6,000 to 8,000 additional individuals.

A safe and healthy environment
Mr. Speaker, we are committed to ensuring that Ontario has the toughest policies in the world for safe, clean drinking water and we will dedicate whatever resources are required to accomplish this goal. Following the tragic events at Walkerton, the government took immediate steps to improve water safety. These included $18 million for Operation Clean Water to implement tough new regulations for water system operations. Justice Dennis O'Connor's two reports provide a clear roadmap to finish the job. That is why we have accepted all of his recommendations, and remain fully committed to their implementation. We are providing additional funding to more than double the number of inspectors to inspect municipal water systems. The events of the past week indicate the importance of constant vigilance to ensure that Ontario's water is safe and clean. Should further steps be required, we will take them to assure Ontarians that our drinking water is clean and safe. Justice O'Connor estimated that the one-time cost to the province, municipalities and individuals of implementing his recommendations would be up to $280 million, with ongoing costs of about $50 million.
Mr. Speaker, I am pleased to announce that the government will itself commit to an investment of over half a billion dollars in the next two years on clean, safe drinking water for the people of Ontario. This year we will provide $245 million, including investments to:
• help municipalities upgrade their water systems to meet our tough new standards and make improvements to their wastewater systems;
• establish the $50 million Clean Water Legacy Trust and the Clean Water Centre of Excellence in Walkerton to provide access to the best scientific knowledge, research and technology and training in the management and monitoring of our safe drinking water;
• begin implementing Justice O'Connor's Part 2 recommendations;
• conduct groundwater studies to support the development of source water protection plans; and
• purchase new environmental and water monitoring equipment for the Ontario Ministry of the Environment and Energy.
Researchers are on the verge of developing an automated water-testing system enabling the immediate detection of biological contamination and immediate notification of those responsible for maintaining water systems. The Province will work with municipalities, researchers and individuals to develop and utilize this innovative technology for the safety and benefit of Ontarians.
I would like to thank Marilyn Churley, Member for Toronto-Danforth, for her proposed legislation to improve the province's drinking water quality. My colleague Chris Stockwell, Minister of Environment and Energy, will work with her to ensure passage of a Safe Drinking Water Act for Ontario, strengthened by Justice O'Connor's recommendations. Justice O'Connor also supports Bill 155, the Sustainable Water and Sewage Systems Act, as the underpinning of a sound legislative approach to ensure clean, safe water for the future. In proceeding with the implementation of this proposed legislation, we recognize, as does Justice O'Connor, that there may be exceptional circumstances where some municipalities may require assistance to keep water rates affordable for users. In his Part 2 report, Justice O'Connor recognizes that everyone will have to contribute their fair share to the cost of ensuring a safe, clean water supply, and he estimates that his recommendations could cost up to $19 per household per year. Justice O'Connor also emphasized the importance of watershed planning and management. We agree, and have already taken the first step, through the Oak Ridges Moraine Conservation Act, to protect 100 per cent of the Moraine's important water resources and significant natural features. We have endowed the Oak Ridges Moraine Legacy Trust with an initial $15 million. Along with partnership funding from other levels of government, and the private and non-profit sectors, the Trust will fund such activities as securing land, stewardship, research, public education, and support for the establishment of a continuous Oak Ridges Moraine Trail. From the creation of provincial parks to the Niagara Escarpment to Ontario's Living Legacy, Progressive Conservative governments have a long and impressive history of securing our natural heritage and protecting environmentally sensitive areas.
Mr. Speaker, the government is also committed to clean air. I want to thank the Select Committee on Alternative Fuels and Energy, chaired by Dr. Doug Galt, Member for Northumberland, for the many thoughtful and creative recommendations contained in its report. Consistent with one of the report's recommendations, the Premier recently proposed that biodiesel be exempt from fuel tax in Ontario. In addition, I propose to extend the sales tax rebate for hybrid-electric automobiles to cover sport utility vehicles and light trucks equipped with this technology.

Ontario's Air Quality Initiatives
• Ontario's Drive Clean will expand in July 2002 to cover all of southern Ontario's smog zone.
• The Smog Patrol identifies and tests vehicles with excessive visible exhaust on Ontario's highways, including out-of-province vehicles such as trucks and buses.
• The government is requiring the Lakeview Generating Station to cease burning coal by April 30, 2005. In addition, Ontario has introduced tough new limits (caps) on air pollutants and an emissions-reduction trading system for the electricity sector.
• Ontario's open electricity market allows consumers to choose electricity from renewable energy sources.
• Ontario is one of the first jurisdictions in the world to require monitoring and public reporting on a full range of greenhouse gases linked to climate change.
• Ontario passed legislation in 2000 giving the Province the highest fines and longest jail terms in Canada for major environmental offences.
Investing in infrastructure-building for the future
Mr. Speaker, prosperity requires investing in the infrastructure on which our economy and quality of life depend-highways, transit, universities and colleges, hospitals, water systems and community facilities. That is why we created SuperBuild. With our public and private partners, we will invest at least $20 billion over five years. With the $2.7 billion allocated in this Budget for infrastructure investments, the government and our partners are well on track to meet that target by 2004.
SuperBuild investments in Ontario's cultural renaissance
On May 31, 2002, Premier Eves announced a $119.5 million investment in seven of Ontario's key cultural facilities, including:
• $31 million for the Canadian Opera House (value of land)
• $30 million for exhibits and events expansion to the Royal Ontario Museum
• $24 million for expansion and improvements to the Art Gallery of Ontario
• $20 million for expansion of the National Ballet School
• $10 million for expansion of the Royal Conservatory of Music
• Taking into account partner contributions, these projects will result in capital investments of more than $500 million.

SuperBuild investments in highways and transit
• $10 billion over 10 years to renew and expand our highway system.
• Investment of $1 billion in our highway system in the coming year.
• Moving forward on our 10-year, $9 billion transit investment plan.
• The federal government needs to become a full transit investment partner with Ontario and its municipalities.
• Full responsibility for GO Transit taken back. GO Transit's current services to be the foundation for the expansion of inter-regional transit throughout the entire Golden Horseshoe area.

Investments to help vulnerable people
• $27 million annually to provide specialized programs and services to help children with a combination of physical, developmental, behavioural and psychiatric disabilities whose complex needs are not being fully met within their communities.
• $104 million in 2002-03, growing to $197 million annually, to enhance services for people with developmental disabilities. This is an increase of $49 million from 2001-02. In addition, the Province remains committed to its investment of $67 million over five years to build new places for people with developmental disabilities to live within the community.
• Over $860 million to protect children from neglect and abuse-an increase of 139 per cent since 1995.
• $114 million this year to provide respite care for families caring for high-needs children and for parents caring for adult sons and daughters with developmental disabilities.

Respecting and equipping those who protect us
• Working with the fire services community, create a firefighters' memorial on the grounds of Queen's Park.
• $4 million to equip more OPP vehicles with mobile work stations.




REINFORCING GROWTH IN THE NEW ECONOMY
Fostering an innovative economy
Mr. Speaker, we recognize that to become more productive and competitive, Ontario must become more innovative. Our goal is to be one of North America's top-performing jurisdictions for research and innovation. Since 1997, the Research and Development Challenge Fund has committed nearly all of its half a billion dollars to fund research projects province-wide. To promote research excellence and partnership between industry and Ontario's research community, I am today announcing a $250 million expansion over five years to allow the Fund to call for a new round of research proposals this fall. We will also provide a $300 million enhancement to the Ontario Innovation Trust to help Ontario's universities, community colleges, hospitals and research institutions develop the infrastructure needed for scientific research and technology development. This will bring the government's investment in Ontario's research infrastructure to well over $1 billion. The Challenge Fund and the Ontario Innovation Trust work together to promote research excellence and increase research capacity in Ontario. Including today's announcement, this government will have committed a total of $1.8 billion to innovation through these two programs. Just last week we saw how these two programs can work together. On June 14, the government announced a joint investment of more than $11.5 million from both of these programs to the Perimeter Institute and the University of Waterloo, for projects to support world-class institutes for theoretical physics and quantum computing.
In this Budget, Mr. Speaker, I am committing an additional $5 million per year for three years to support the Perimeter Institute's important work, starting in 2004-05. This brings our total commitment to over $25 million.
Mr. Speaker, in the 2000 Budget, we made a $30 million annual commitment to the Ontario Research Performance Fund. The Fund is the only ongoing program in Canada solely dedicated to covering the overhead costs of research.
We will strengthen our commitment to research by increasing this Fund by $2 million per year. We also challenge the federal government to provide ongoing and adequate support to cover overhead costs of federally sponsored research.
Mr. Speaker, Ontario needs to realize greater social and economic benefits from its R&D investments and the scientific output of its universities, colleges and research hospitals. More successful commercialization requires improved connections between publicly funded research and the marketplace and entrepreneurs who produce products and services that can compete globally.
Today I am announcing a $161 million renewal for five years of the Ontario Centres of Excellence Program to help our small and medium-sized entrepreneurial firms access expertise and commercialize inventions from publicly funded institutions.
Mr. Speaker, strong linkages between academic research and entrepreneurial firms are essential in the biotechnology sector. More than half of the Research and Development Challenge Fund's investments have promoted industry-academic research partnerships in the life sciences. But we need to do more- and we are. On June 7, Premier Eves announced a $51 million strategy that will help make Ontario a North American leader in biotechnology by attracting scientists and new investments. It includes a $20 million investment in the Medical and Related Sciences Discovery District in downtown Toronto, which could result in total public and private investment of up to $300 million. The strategy also includes a $30 million Biotechnology Cluster Innovation Program to provide grants to develop regional innovation plans and support the development of commercialization centres, research parks and innovation networks in regions across Ontario. The government will also provide seed funding for a Bioprocessing Institute, which will help make Ontario a leader in the development and manufacture of therapeutic proteins, the basis for promising new medicines. Further details of these initiatives will be announced by my colleague Jim Flaherty, the Minister of Enterprise, Opportunity and Innovation.

Fair and efficient financial markets
Mr. Speaker, businesses need access to capital to invest in new products and services and in job creation. Savers and investors need financial markets in which they can be confident their financial interests will be safeguarded. I would like to thank Purdy Crawford and the other members of the Five Year Review Committee for their recently published draft report on the Ontario Securities Act. The report pointed out that the Canadian securities industry faces 13 sets of rules and regulations administered by 13 different regulators. This places a burden on business and investors operating in different regions of the country and weakens Canada's economic performance. I intend to work with my colleagues across the country to promote the benefits that will result for all of us from moving towards national securities regulation.
Mr. Speaker, when we were elected in 1995, Ontarians were facing double-digit increases in auto insurance rates-the result of the flawed policies of previous governments. As a result of our 1996 auto insurance reform legislation, rates fell for a number of years. However, the market has changed. Both here and across North America, rising health care and vehicle repair costs are contributing to higher rates. We will address pressures on the system and also consider longer-term solutions to ensure that automobile insurance remains available and affordable to Ontario citizens. I have asked my Parliamentary Assistant, Ted Chudleigh, and Rob Sampson, the original author of our 1996 reform package, to complete the consultation that began last year and to return to the government as soon as possible with an action plan.
Healthy and growing communities
Mr. Speaker, strong cities, towns and rural communities are vital to achieving economic prosperity. We recognize this, and have invested in the ability of our communities to contribute to our economic growth and our quality of life.
We have implemented comprehensive and far-reaching reforms to the property tax system to improve fairness and to restore the health of this important revenue source for municipalities. My colleague, the Minister of Municipal Affairs and Housing, Chris Hodgson, introduced the first new Municipal Act in Ontario in over a century, to ensure that the legal and financial powers of municipalities will support their modern responsibilities. Under his leadership, we have launched an ambitious partnership initiative, Smart Growth, to promote and manage growth in ways that sustain a strong economy, build strong communities and promote a clean and healthy environment. Smart Growth means making investments for a better transportation network to reduce gridlock and emissions in urban centres. It means promoting economic growth in northern and rural areas so that youth have real opportunities to stay in their communities, and it means directed growth, away from key environmental features and significant agricultural lands. Ontario values the contribution that strong cities make to the continuing prosperity of Ontario and Canada, as urban regions across North America compete with one another for global investment and jobs. We are willing to join the emerging dialogue about a new deal for cities-if it's the right one. We recognize that there are calls for new revenue sources for cities, but there are also calls for greater accountability and reforms to governance. At all levels of government, taxpayers need strong assurances that their money will be spent wisely. Furthermore, Mr. Speaker, a new deal for cities requires, as a precondition, a new deal between the federal government and Ontario to restore the balance between revenue and funding responsibilities for all levels of government in Canada. We will continue to work in partnership with municipalities, guided by Smart Growth principles, to ensure that our communities have the infrastructure they need to sustain their contribution to Ontario's economic prosperity. We welcome the federal government's participation in this partnership.
Support for municipal infrastructure in Ontario's communities
• Provincial investment of $520 million in 2002-03, including federal flow-throughs, for municipal infrastructure initiatives:
• Helping municipalities make investments to bring them into compliance with the new Ontario Drinking Water Protection Regulation and make other improvements to their water and wastewater systems;
• Improving and modernizing sports, cultural, recreational and tourism facilities;
• Enhancing and expanding public transit, and renewing municipal bus fleets; and
• Investing as a partner in strategic infrastructure projects in major urban areas, including the Toronto Waterfront Revitalization initiative.

In the current fiscal year, we will provide $520 million for municipal infrastructure, including investments in clean, safe drinking water; public transit; and community, recreational and cultural facilities. Ontario's municipalities are accountable to their citizens to invest prudently in maintaining and improving their infrastructure. Where municipalities choose to borrow funds to support their investments in infrastructure, we want to ensure that their borrowing costs are as low as possible. We will consult with municipalities on how to lower their financing costs, including through the introduction of tax-free Opportunity Bonds. This government's plan must allow Ontario's smaller and more remote communities to take advantage of the economic growth seen in larger urban centres. We will therefore consult with the private sector and communities about the conditions that are necessary to support sound business investments. We will draw on their experience and advice to develop legislation that would establish tax-incentive zones in Ontario. These zones would create economic growth and give young people the opportunity to live, work, raise a family and give back to the communities where they grew up. Strong communities need strong leadership. We will fund the Ontario Centre for Municipal Best Practices, a partnership between the Ontario government and the Association of Municipalities of Ontario.
New investments in northern and rural Ontario
• $255 million (including federal cost-sharing of $9 million) to improve northern highways, a key support to economic development in the North.
• $36 million for partnership projects to promote alternative agricultural products and markets, rural economic diversity and the creation of long-term jobs in rural Ontario.

Supporting our agricultural communities
Mr. Speaker, agriculture is one of Ontario's major industries. But it is also a way of life in rural communities across the province. The future of our family farms and the sustainability of our agri-food industry are challenges that affect all Ontarians. The industry is faced with a host of important issues, including global trade, new technologies and environmental concerns. Ontario is working with the industry through the Premier's Roundtable discussions. In addition, my colleague Helen Johns, the Minister of Agriculture and Food, is representing Ontario in the discussions leading to a new Agricultural Policy Framework with our provincial and federal counterparts. Ontario is committed to negotiating the best possible deal to meet the needs of our farmers, today and for the future. My colleague Brian Coburn, the Associate Minister Responsible for Rural Affairs, has emphasized to me the importance of a fair property tax for farmers. I am pleased to announce my intention to bring forward changes recommended by Minister Coburn and my Parliamentary Assistant, Marcel Beaubien, respecting the property tax treatment of farmland.
I look forward to receiving Mr. Beaubien's final report on the property tax assessment process in the coming weeks with the goal of improving property tax fairness in other sectors in this province.
Fairer property taxes for farmland
• Beginning in 2003, municipalities would be enabled to set a tax rate for the farmlands property class that is below 25 per cent of the residential tax rate. Both municipalities and farmers believe this would better recognize the valuable contribution made by farm properties to their communities.
• Also beginning in 2003, government-owned farmlands that are occupied by tenant farmers would be eligible for inclusion in the farmlands property tax class, ensuring that members of the farm community are treated consistently.

CONCLUSION
Mr. Speaker, deficits eat away our future growth and undermine public- and private-sector confidence.
That is why I am tabling the fourth balanced Budget in a row and why I am committed to tabling a balanced Budget for 2003-04.
As we look ahead, it is clear that Ontario continues to be Canada's engine of prosperity. Virtually all of the economic indicators are improving.
As a result, private-sector forecasters expect real economic growth to exceed three per cent this year and be more than four per cent next year. As it did over the 1996-2000 period, Ontario's dynamic economy will once again register growth exceeding that of the G-7 nations over the next two years.
Positive economic indicators
• 70,000 new jobs have been created since September of last year. Employment is projected to rise by between 1.5 and 2.0 per cent this year, and an additional 2.5 to 3.0 per cent in 2003.
• Stronger job growth has led to stronger household spending. Ontario retail sales are up 5 per cent so far this year and department store sales are 8.1 per cent ahead of the same period last year.
• Ontario is the leader in creating new manufacturing jobs in North America. Ontario added 24,000 net new jobs in this sector since September, while the United States lost 649,000 manufacturing jobs.
• Housing starts in Ontario are expected to reach 80,000 in 2002, the highest level in 13 years. So far this year Ontario home sales have soared 29.7 per cent ahead of last year.
The challenges we successfully faced over the past year would have been much worse, Mr. Speaker, without the earlier growth in jobs and prosperity resulting from our plan, and without the stimulus to consumers and investors we provided through tax cuts.
Some will argue that there is little we can do to influence the global economic forces that buffet our province. We disagree.
The plan we laid out in 1995 has helped Ontario weather this challenging economic storm. All we have to do is remember the last recession of the early 1990s.
Ontario was first into the hole, we went down the deepest, and we were the last out-with an $11 billion deficit.
Coming out of the downturn, Mr. Speaker, our citizens are benefiting from $11 billion a year in tax relief, our prudent fiscal management has kept our budget balanced, and our resources are focused on the priorities of Ontarians- health care, education and a clean and safe environment.
Our government has put in place the right fundamentals for growth and prosperity, as we promised we would.
The skills, the creativity, the courage and the hard work of Ontarians will do the rest.
Thank you, Mr. Speaker.

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