Province Législature Session Type de discours Date du discours Locuteur Fonction du locuteur Parti politique Saskatchewan 22e 5e Discours sur le budget 16 Février 1995 Janice MacKinnon Ministre des finances Saskatchewan New Democratic Party Mr. Speaker, there are many special guests in this legislature today. With your indulgence I would like to begin, as in other years, by introducing four of these guests to the Assembly. First - and I'd ask them to stand please - my husband, Peter MacKinnon, who is also the dean of the law school at the University of Saskatchewan; my son, Alan MacKinnon, who is a grade 10 student and a wrestler; my son, William MacKinnon, who is a grade 7 student and soccer and basketball player; and my neighbour, Bill Kinloch, who is also a veteran ofthe Second World War. Mr. Speaker, it gives me great pleasure to rise today to present Saskatchewan people with their first balanced budget in over a decade. But, Mr. Speaker, what I am presenting here today is not just one balanced budget. I'm pleased to announce that the budget for the current year, 19941995, will be balanced. Further, the budget I am presenting today for 1995-1996 will also be balanced. Mr. Speaker, this is not just two balanced budgets. I'm proud to present our new financial plan which projects three more balanced budgets through 1998-99. Mr. Speaker, that is five consecutive balanced budgets, a half decade of sustainable, balanced budgets. This is an achievement in which all Saskatchewan people can take pride. Each and every one of us has made our contributions to this success. Each and every one of us has done our part. Saskatchewan has gone from the brink of a financial crisis to being the first province in Canada to balance its budget. Once again, Saskatchewan people have led the way. We are a model for the rest of the country. We have shown the nation how to meet the challenges of a changing world with courage, vision, and compassion. We did it with a common sense plan, the balanced budget plan. The plan set specific goals and targets. It built for the future by stimulating economic growth and creating jobs. It remained true to our community's fundamental values of caring, compassion, and cooperation. The plan succeeded because of the hard work and commitment of Saskatchewan people. We did it together. Since 1991 we've gone from a deficit of $842 million, one of the highest per capita deficits in Canada, to being the first province to achieve sustainable balanced budgets. We've gone from negative economic growth in 1992 to one of the strongest growth rates in Canada for the last two years. We've travelled from a time of uncertainty and insecurity to a time of confidence and security. A half decade of balanced budgets establishes a solid and secure foundation for Saskatchewan's future. Now is the time to Mr. Speaker, I'm pleased to present today our new financial plan for Saskatchewan's future, a plan which will prepare us for the 21st century. The debt management plan I am tabling today includes a strategy to pay down the debt so that our children and our grandchildren will not be burdened with our bills. A strategy to move toward the ideals of full employment and full employability; a strategy to improve our quality of life by improving on health and education programs; a strategy to allow Saskatchewan people to reap the rewards of their past sacrifices. Because we have come so far in just three years, we've earned the freedom to dream new dreams for ourselves and for our children. Saskatchewan people have a right to ask: will this new plan work? I can tell them with confidence it will, because it builds on what we've already accomplished together. Sound financial management is a precondition to economic growth. Business is reluctant to invest in a province that cannot manage its money. Saskatchewan's recent fiscal record has restored confidence in our economy. Moreover, stimulating economic growth was one of our key strategies in balancing the budget. We reached our deficit targets not only by cutting spending, but also by promoting economic development to increase our revenues. There are many examples. We redesigned our oil and gas royalty structure to encourage more exploration and production. We changed our approach to agriculture to encourage diversification and more value added production. We provided targeted tax reductions to business to encourage investment. Our approach is paying dividends. Over $1 billion was invested by our oil and gas industry in 1994. Annual oil production is up more than IS per cent and hundreds of jobs have been created. Realized net farm income in 1994 is estimated to be $925 million, 69 per cent higher than the previous 10-year average. Farm cash receipts are the highest in the history of this province. Retail sales increased by more than 9 per cent last year - the best performance since 1982. This revival in consumer confidence helped create more than 850 jobs. . . 8,500 jobs in our service industries in 1994. This is a solid foundation upon which we can build; and we will, by making jobs our number one priority, by making our long-term ideal full employment everyone needing a job should have one - by continuing to implement our economic development plan, Partnership for Renewal. The 1995-96 budget provides increased financial support for regional economic development authorities. This budget provides support for the Saskatchewan Research Council to help companies develop and market their new ideas and technologies - help to turn good ideas into good jobs. This year government departments and Crown corporations will spend more than $825 million on capital projects across the province - creating jobs today while investing for the future. Another $20 million has been committed to the Transportation Partnerships Corporation. This unique corporation will enter into new partnerships with private businesses, communities, and other levels of government, to improve the quality of our roads and highways - creating jobs today while investing for the future. The Saskatchewan infrastructure program will continue, with a total investment of $91 million for over 320 projects ranging from roads to a biofermentation plant - creating jobs today while investing for the future. To enable our municipalities to maintain and improve their services, this budget commits 10 per cent of VL T (video lottery terminal) revenues to local communities. Revenue-sharing grants will continue at this year's level in both in 1995-96 and 1996-97. Building stronger communities is an important part of this budget; so is helping business create jobs. Since 1991, a component of our job strategy has been targeted tax reductions to business. Over the last four years our government has reduced the corporation income tax rate for Saskatchewan small businesses by 20 per cent. The small business tax rate in Saskatchewan is now 8 per cent, the second lowest provincial rate west of Quebec. The budget 1 am presenting today builds on our strategy of targeted tax reduction tied to job creation. Effective March 1, 1995, the fuel tax on aviation turbo fuel will be reduced from 7 cents per litre to three and a half cents per litre. The fuel tax on aviation gasoline for commercial or business purposes will also be effectively reduced to three and a half cents per litre. Our government will press the airline industry to increase its fuel services and improve airline service to the province. Mr. Speaker, we are committed to processing and manufacturing our resources within Saskatchewan rather that exporting processing jobs. An example of the benefits of value added processing is Canamino. Using biotechnology research this company processes oats into a fine powder which is used in cosmetics. The export value of a tonne of raw oats is a little over $80. The value of a tonne of the processed powder is $9,000. By promoting value added processing, we are finding new uses for our agricultural products; at the same time, we are creating good, long-term jobs for Saskatchewan people. We have encouraged the expansion of our manufacturing and processing industries in a number of ways, including the elimination of the education and health tax on direct agents. This strategy is paying dividends. Manufacturing shipments grew by over 17 per cent in 1994, the strongest growth in over a decade. Two thousand new manufacturing jobs were created in 1994. Mr. Speaker, I'm pleased to announce that we are building on this solid foundation by introducing, effective midnight tonight, a non-refundable 9 per cent investment tax credit. This tax credit will apply to capital purchases in support of manufacturing and processing activity in Saskatchewan. The credit will be applied against corporation income tax payable and will effectively reduce the cost of capital expansions in Saskatchewan. In addition, effective July 1, 1995 the corporation income tax rate for manufacturing and processing firms will be reduced. The amount of the tax reduction will be tied to a company's presence in Saskatchewan. The more business activity and jobs located here, the more the tax rate will be reduced. For Saskatchewan-based companies, the corporation income tax rate for manufacturing and processing will be reduced from 17 per cent to as low as 10 per cent, the lowest of any province in western Canada. These tax changes will encourage further expansion of our growing manufacturing and processing companies and create good long-term jobs for Saskatchewan people. Adding value to our products is also a key component of our agricultural plan, Agriculture 2000. To encourage diversification in agriculture, our government has created the agri-food innovation fund. This fund will enhance research and development in areas such as speciality crops, livestock, and non-food use of agricultural products. This is an important link in building on our agricultural biotechnology strength. Where would Saskatchewan farmers be today without canola? We developed canola here by investing in the necessary research. Last year Saskatchewan farmers grew almost a billion dollars worth of canola. By investing today to promote the development of new products, we are looking to the future. We want new products, expanded opportunities, and greater income security for our farmers today and into the future. Providing security for farm families is also the goal of our farm safety net programs, which have three components: the whole farm stabilization account provides protection against drops in income by encouraging saving during good years; the sector program provides protection against drops in revenue from grains, oilseeds, and specialty crops; and crop insurance provides protection against production and quality losses. Through the new safety net programs, crop insurance, and the farm fuel program, the Government of Saskatchewan will contribute more than $350 million to agriculture this year. Mr. Speaker, our strategy to achieve our long-term ideal of full employment involves building on our agricultural strength, promoting value added processing and biotechnology, using targeted tax cuts to business, investing in infrastructure, and working in partnership with others in the community . Full employment must go hand in hand with full employability, ensuring that our people have the education, skills, and experience they need to get a job. We need jobs but we also need people with the skills, training, and experience required for those jobs. That's why we're working with the federal government to improve our training programs by providing better information about job prospects; working more closely with communities, education institutions, and industry to determine what kind of practical training will be required today and into the future. We are also committed to linking training and the workplace more effectively. That is why we are expanding our apprenticeship programs; that is why we are helping business provide immediate training, so that Saskatchewan people can secure the new jobs resulting from our economic comeback. That is why we are providing more funding to public training institutions, to allow them to give Saskatchewan people the skills they need immediately. Hon. Ms. MacKinnon: - Our youth merit special attention. Across Canada unemployment levels for young people are too high. Young people have told us they need help getting that first job so they can get work experience. We have listened. We are acting. Mr. Speaker, JobStart will provide new training and employment opportunities for young people to help them get that important first job. JobStart will provide work-based training that will lead to sustainable employment for young people who don't have a post-secondary education; opportunities for post-secondary graduates to begin their careers with small and medium-sized growth firms which need the expertise of graduates to develop new products and ideas; help for young people to move from welfare to work, but who also need training, counselling, and support. This budget will also assist another 2,400 students to get summer jobs to help them pay for their education and gain work experience. The 1995-96 budget also creates new summer jobs in reforestation. Due to poor forest management practices in the past, thousands of hectares of land were not properly restocked. We are beginning the long process of eliminating this backlog. Reforestation helps to preserve our environment, which is so crucial to our high quality of life, the same time it creates jobs for our young people. Preparing our youth for the challenges of the 21 st century requires a quality and accessible education system. Mr. Speaker, I'm pleased to announce that funding for local school boards, universities, regional and federated colleges and SIAST (Saskatchewan Institute of Applied Science and Technology) will continue at this year's levels in 1995-96. In 1996-97, there will be a 2 per cent increase in funding to these institutions. Financial barriers to higher education will be lessened by improvements to the student aid program. These changes will help ensure that student loans more accurately reflect the true cost of living. There also will be a special grant program targeted at high need, underrepresented, and disabled students. Geographical barriers to education will be reduced with a distance education initiative. More than 100 education sites will be connected with the information highway. Because of this exciting new initiative, children and adults in rural and northern Saskatchewan will have access to advanced technical training right in their own communities. Quality education and good health are key contributors to our high quality of life. To save medicare, we had to change our health care system. Our system was outdated. It was out of step with health realities, such as the declining need for hospitalization and the greater awareness of prevention. The system was not coordinated. Its costs were sky-rocketing and it was not fully meeting people's needs. Our plan, working together toward well ness, is creating a people-centred health system by spending less on institutions and more on services for people. Placing control of health services in the hands of local people. Giving people more control over their health by emphasizing prevention. Providing health services as close as possible to people's homes. Already much progress has been made. Cumbersome and costly administration has been cut and services have been expanded. More than 400 health boards have been replaced by 30 locally controlled district health boards. These health boards are cutting administrative costs. For example, in Prince Albert 13 management and administrative positions have been eliminated. The savings are being used to enhance home care services. Home and community-based services have also been expanded. For example, the Saskatoon district health board has reduced expensive acute care services by over 5 per cent. These savings are being used to enhance home care services by nearly 60 per cent, and community-based services by nearly 20 per cent. Our health care changes have been internationally recognized. For example, the Pan American Health Organization said the efforts being undertaken in Saskatchewan could serve as an inspiration and impetus for change in our member countries. Now is the time to build on this solid foundation and provide health boards with the resources they need to improve the locally controlled home-based and preventative programs that people want and need. Home care is one of the cornerstones of seniors' independence. We have already increased funding for home-based services by nearly 60 per cent since 1991. But people, especially seniors, have said they want further improvements. We listened. We are acting. We are investing in home and community-based care to meet the practical needs of people. With the 1995-96 budget, funding for home-based services will have increased by over 90 per cent since 1991. This commitment to home and community-based services will allow districts to reduce fees, to make home care more accessible, improve palliative care, and offer respite for family members of the chronically ill. District health boards are already working on improvements to services as a result of the additional support provided in this budget. For example, Swift Current is providing round the clock home care services. The Battlefords is developing a program so that more patients can receive quality health care at home rather than in institutions. To take health care into the 21 st century, we are also investing in a province-wide health information system which will help eliminate the waste and inconvenience of duplicate testing, determine which tests and treatments actually help patients. Our continued progress in renewing Saskatchewan's health system means that by the year 2000 we will have a sustainable system that is there when it is needed, provides the best and most appropriate care, prevents injury and disease, and is locally controlled by local communities. Mr. Speaker, everyone in Saskatchewan contributed to eliminating the deficit. Everyone did their part. In return, this government gave two commitments. First, that we would work continuously to eliminate waste and reduce the cost of operating government. We are living up to that commitment. Since 1991 we have reduced the cost of running this government by over $75 million through such measures as cutting cabinet ministers' salaries by 5 per cent; reducing the number of government departments. This year, another $5 million will be saved by implementing further common sense changes. Examples include implementing an energy management and conservation program for government buildings; processing Saskatchewan savings bonds applications in-house. Further, I make the commitment that this government will continue to review, on an ongoing basis, government operations to ensure that services are being delivered as cost-effectively as possible. Our second commitment to Saskatchewan people was that as times improved, our finances improved, taxes would be reduced. Because we have achieved sustainable balanced budgets, we will meet our commitment to reduce taxes. Mr. Speaker, I'm pleased to announce that effective July 1, 1995, the deficit surtax will be eliminated for lower income earners and significantly reduced for all other provincial taxpayers. This will be accomplished by providing an annual reduction against the surtax of $150 per taxpayer and $300 per dual income family. This reduction will mean 6,000 lower income taxpayers will no longer pay Saskatchewan income tax. Two-income families earning up to $34,000 will no longer pay the surtax. Two-income families earning up to $65,000 will see their surtax reduced by more than 50 per cent. The tax cuts in this budget are responsible and affordable. Saskatchewan people can be secure in the knowledge that these tax cuts are sustainable - today, tomorrow, and into the 21st century. Because the deficit has been eliminated, the money raised from this surtax will now be used to assist in paying down the debt. The debt reduction surtax reflects our commitment to paying down the debt as outlined in our debt management plan. I'm pleased to table that plan today. Now that we have achieved sustainable balanced budgets, it's time to set out a new plan for the future and to begin to pay down the debt. People have told me many times they never want to return to the 1980s. The 1980s, when government gave irresponsible tax cuts, overspent, and racked up huge debts. We've already taken steps to guard against this by opening the books of the province. People are now being shown a true picture of the province's finances. The laws of the province require timely release of the public accounts, full disclosure of the activities of Crown corporations, and the use of accrual accounting, which forces the government to budget today for its commitments, a bit like a family being forced to throwaway its credit card and live within its means. These and other changes have prompted the Provincial Auditor to report the government moved from providing what the Financial Management Review Commission viewed as the weakest and least useful financial statements in Canada to providing one of the most useful financial statements issued by a senior government in Canada. We have come a long way in improving accountability. And we have come a long way in ending the mortgaging of Saskatchewan's future. In the 1980s an average of $1 billion a year was added to the province's debt. One goal of our balanced budget plan was to stop adding to that debt. The next goal is to reduce that debt. Paying down the debt is like reducing the mortgage on one's house. As the debt is repaid, interest payments decline, leaving more revenue for other purposes. We have begun to reduce Saskatchewan's debt. Mr. Speaker, I am pleased to announce that for 1994-95 not only did we balance the budget, we project a $119 minion surplus. For the first time in over a decade, we are reducing debt rather than adding to it. The process of paying off Saskatchewan's mortgage has begun. We have taken the first step on the road to even greater financial security for our children and our grandchildren. Mr. Speaker, in 1994-95, by operating with a budget surplus, by reducing Crown corporation debt, by renegotiating megaproject deals, we will reduce the province's debt by $540 million. In one year, our total debt will be reduced by over half a billion dollars. This is a giant step forward, but it is still only the first step. We are building on this solid foundation with our debt management plan and balanced budget legislation. Our balanced budget legislation will force governments to set out long-term financial and debt management plans for sustainable balanced budgets. Our debt management plan outlines how we are going to allocate surpluses and reduce the debt. From April 1, 1994 to March 31, 1999, this debt management plan will reduce Saskatchewan's total debt by $1.2 billion. In 1994 our total provincial debt amounted to 70 per cent of Saskatchewan's gross domestic product. By 1999, this 70 per cent will be lowered to 51 per cent. Over the next four years our debt management plan gives equal priority to three objectives: one third will go to paying down the debt; one-third will go to reducing taxes; one-third will go to improving our quality of life by helping to create jobs, educating our youth, and improving our health system. Hon. Ms. MacKinnon: - The goal of our first financial plan was creating sustainable balanced budgets. That goal has been achieved. Our new financial plan outlines how, with planned, regular payments, we can pay down the mortgage on Saskatchewan. Mr. Speaker, today we are turning our back on past problems and fixing our gaze firmly on tomorrow. We are leaving behind more than a decade of deficits. We are beginning a new era of greater financial security and freedom. We can look with enthusiasm to a brighter future. A future where economic growth and jobs are our main priority; where our quality of life can be improved; where we can dream new dreams for ourselves and for our children. Together we have earned new freedom. But Saskatchewan people have also learned from the past to use our freedom responsibly and wisely, with moderation and balance. There will be those who say we should have spent more on programs and services. To them I say we cannot return to the days of spending money that we do not have. There will be those who say we should have cut taxes more. To them I say, remember the 1980s when irresponsible tax cuts led to higher deficit and higher taxes. There will be those who say that all of our additional money should have gone to paying down the debt. To them I say, repaying the debt is important but we must almost meet the needs of people today. My friends, we have come a long way together. We still have some distance to go. But let us reflect with pride on what we have achieved together. We have secured our future. We have delivered on our promise to our children and grandchildren - there is a new day dawning for Saskatchewan. Thank you. Mr. Speaker, I move, seconded by the hon. member from Riversdale: That this Assembly do now resolve itself into the Committee of Finance.