Province Législature Session Type de discours Date du discours Locuteur Fonction du locuteur Parti politique Saskatchewan 25e 1e Discours sur le budget 31 mars 2004 Harry Van Mulligan Ministre des Finances Saskatchewan New Democratic Party Thank you Mr. Speaker. I want to start by welcoming our guests, and the stakeholders who have joined us here today. Mr. Speaker, today’s budget is about priorities and about values. It is about a province we will shape through conscious choices, move forward by action, and deliver to future generations. In Saskatchewan our essential programs and services go beyond social responsibility. They are moral obligations. Education and Health Care, these are the basic institutions that contribute to our communities and provide opportunities for our young people. Yet, we can no longer demonstrate our commitment to these sacred public services through increased funding alone. Times have changed. The economy has changed. We have to change as well. This budget responds to the fiscal reality in Saskatchewan. This budget exemplifies restraint and demands change, because Saskatchewan people understand the value and the inherent importance of prudent financial choices. So we are addressing our financial picture today. We are not delaying until tomorrow. We are the architects of our own future, acting now to preserve the essential services that define our province, our principles, and our ideals. Acting now to secure our future. Acting now to create future opportunities for our youth. Making Saskatchewan ready for the next generation. Mr. Speaker, over the past decade the government has greatly enhanced the accountability and transparency in our fiscal operations. We have introduced: - Balanced Budget Legislation; - Interim financial reporting; - Summary Financial Statements with our Public Accounts; and - Department performance plans and reports. Adding to these, the province’s financial statements are now presented in the legislature within 120 days of our year-end. These are just some of the changes we have made to our financial reporting. Today we are moving forward once again with the introduction of a Summary Financial Plan. This plan is a consolidated financial look at all government departments, crowns, agencies, and boards. It is another step in this government’s efforts to ensure Saskatchewan citizens have access to their financial information. Mr. Speaker, it is my great pleasure to introduce this document today. Stability Mr. Speaker, our economy – with its dependence on natural resources and commodities - is subject to cyclical fluctuations. We can experience great swings in commodity prices or production. As examples, I will note the price of oil, or the lower crop production brought on by drought. These fluctuations can, and do, result in unexpected demands on the provincial treasury. Sometimes the result is increased expenditures. Sometimes it means falling revenues. The only constant is that these changes cannot be anticipated or incorporated into the government’s budget and financial plan. It is for this reason Mr. Speaker, that Saskatchewan has had some form of fiscal stability fund, a “rainy day account,” if you like, for many years. At one time, this fund represented retained earnings in the Saskatchewan Liquor and Gaming Authority. We now have the Fiscal Stabilization Fund, a stability mechanism that is more transparent and accountable. This fund is a responsible and prudent approach to dealing with the economic fluctuations and unexpected events that occur naturally in our economy and can have a drastic impact on our Provincial finances. The Fiscal Stabilization Fund has been instrumental in dealing with the volatile fiscal issues that we have experienced over the past three years. Drought, forest fires, and BSE all demanded unbudgeted Provincial support. We were there to provide that support through payments to agricultural producers and fire suppression initiatives. All together we have contributed over $200 million dollars in cash payments and $207 million dollars in loans, to meet these emergencies over the past three years. It is well known that these extraordinary events, combined with spiraling costs in our health care system, have created a gap between revenues and expenses. Mr. Speaker, this government acknowledges that gap. A gap derived from the needs that exist in our society. A gap created by the need for essential public services and support programs. We have put money into health care. We have put money into education. We have invested in agriculture and in highways. We make no apologies for these investments. They were necessary, they were right. These were choices made available to us in large part through the Fiscal Stabilization Fund. The Fund has helped us through the challenges over the last few years, and helped us balance our budget. It has served us well and operated as it was intended. Yet, we cannot live on savings indefinitely. We are committed to living within our means. We are committed to finding the greatest efficiency from every public dollar. Competing Priorities – Changing Demands Mr. Speaker, today I am presenting our 11th consecutive balanced General Revenue Fund budget – balanced with the benefit of a $158 million dollar transfer from the Fiscal Stabilization Fund. This transfer is a 40% reduction from the last fiscal year. We will further reduce the gap between our revenues and expenditures next year, and by the fiscal year 2006/07, our revenues and expenditures will balance. In the fourth year of the financial plan I am presenting here today, we will generate a $42 million dollar surplus. Mr. Speaker, the budget I present here today is balanced. The four-year financial plan I present today is balanced. This budget reflects our commitment to sound financial management. This budget reaffirms our commitment to the promises made in the Throne Speech including: - Education and Opportunities for our young people; - Building a Green and Prosperous Economy; - Providing the Best Public Health Care in Canada; and - Making Saskatchewan the most affordable place to live and raise a family in Canada. Mr. Speaker, we have a plan. We know where we are going. We are securing our financial future. We are committed to the long-term prosperity of this great Province. Mr. Speaker, we have faced significant challenges in the last year that have forced us to confirm our spending priorities and examine our spending levels in all areas of government. This government has met these challenges with responsive leadership and decisive action. During the budget process, we conducted an extensive and thorough expenditure review. Our goal was simple, to hold the line and reduce expenditures. We will continue this process. Everyone has had to make sacrifices. It is our commitment to fiscally responsible governance. We are holding the line on salaries in Government Departments, and Crown corporations. I am sorry to say that some people will lose their jobs today. Mr. Speaker, it is with great regret that I announce that approximately 500 seasonal, temporary, and permanent staff will be impacted by this budget. To help ease the job losses resulting from this announcement, restricted early retirement will be offered to some employees. I say again Mr. Speaker; sacrifices have been made across government. Funding was reallocated, priorities maintained. Twelve Departments have had their budgets reduced this fiscal year. Excluding the Departments of Health and Learning, we have managed to hold spending increases to $15.6 million dollars, or .7%. These two departments, Health and Learning, two of the highest priority areas for the people of Saskatchewan, now account for almost two-thirds of our annual budget. We have not abandoned these sectors. We will not abandon these services. Health and Learning are the highest priorities for Saskatchewan people. Their preservation demanded the difficult choices we made. Across Government, our goal was to cut administrative costs while retaining our valued public services. Some of the steps we are taking include the following: In agriculture, we will reorganize extension services, consolidating 31 offices into 9 and adding a new call centre. The result will be a more efficient system of service delivery and an annual cost reduction of $2 million. The Department of Environment will reorganize and save $6 million dollars annually. They are creating efficiencies by redeploying their staff to better address their mandate. We will reduce administrative costs in the Department of Health by over $2 million. These were not easy choices, but decisions that must be made. Federal Transfers and Confiscatory Federalism Mr. Speaker, I would like to take a moment to discuss federal transfers, in particular Equalization. Equalization is a simple idea made complex with an intricate funding formula that uses a number of factors to determine provincial entitlements. Originally created in the 1950s, Equalization was constitutionally mandated in 1982. The program was created – and I quote from the Constitution, Mr. Speaker – “to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.” In Canada, each province’s ability to raise revenue varies. Equalization payments from the federal government help ensure all the provinces, the affluent and less affluent, can provide comparable levels of public service. The program takes into account all provincial and local revenue sources, population, and the economies of five provinces in defining a standard fiscal capacity. This standard defines whether a province will receive Equalization entitlements. Those provinces with a lower than average ability to raise revenues are designated ‘have not’ provinces and are entitled to receive unconditional cash transfers from the federal government. A recent paper by Professor Thomas J. Courchene indicated that Saskatchewan’s natural resources are still being treated inequitably under the equalization funding formula used by the federal government. At times we are penalized at rates exceeding 100% of our energy revenues. Saskatchewan recently received a one-time payment of $120 million to cover Equalization inequities dating back over fifteen years. This was a positive step in the short term, but we still need progress over the long-term. We need to resolve the inequities in the Equalization program now, and not five years from now when the program is renewed. We are calling for the same treatment of our oil and gas revenues that are provided to Atlantic Canada. We also want a return to the previous mining tax base. We are open to discussions with the federal government and have lobbied for the changes I mentioned. We want to find a solution to the problems in Equalization funding. The program should not discourage economic growth. Our natural resources should benefit our citizens, not penalize them. Saskatchewan is being penalized unjustly! The equalization formula is not fair! It is not equitable! This must be changed! Increasing Revenues Mr. Speaker, the delivery of essential services is neither easy nor inexpensive. There is a cost that must be paid to protect our quality of life – to preserve those public services essential to Saskatchewan citizens. To maintain our essential services, provide assistance to our communities, and support our young people, this budget contains a number of revenue initiatives. These decisions were not made easily and were pursued only after all expenditures were reviewed and spending held or cut in most areas other than Health or Education. We have announced changes in a number of fees and licenses to more accurately reflect service costs. We are also introducing revenue measures that we will implement including: - Effective midnight tonight, an increase in the tobacco tax by one and a half cents per cigarette; and - Increasing the mark-up on bottled beer by 26 cents per litre effective midnight April 24, 2004. Mr. Speaker: - We will change the current Fuel Tax exemption on farm gasoline to 80% of all bulk purchases effective April 7, 2004; and the annual farm rebate for retail gasoline purchases is eliminated beginning this calendar year; and - Beginning in 2005, indexation of personal income tax brackets and credits will be modified annually. Changes will balance inflation protection for taxpayers with the government’s fiscal pressures. Finally Mr. Speaker: - Effective midnight tonight the Provincial Sales Tax rate will increase from 6% to 7% This last measure will provide $136M in revenues this year. Revenues required to help fund the $160 million increase in health care, and the $45 million increase in education. Mr. Speaker, while the PST has been increased, it is not being expanded. Saskatchewan will retain its narrow PST base. Current excluded goods and services will continue to be exempt. This includes key family essentials like utilities and prescription drugs. We will continue with important exemptions to support economic growth and agriculture, including direct agents for manufacturing, construction services, fertilizer and other farm inputs and farm machinery. And, Mr. Speaker, we will also continue to exempt restaurant meals. Mr. Speaker, to lessen the impact on low-income earners, I am also announcing an $8 million dollar annual increase to the Saskatchewan Sales Tax Credit. Beginning July 1, 2004 families will see an increase in the maximum from $274 to $350. Single parent families will have their maximum benefits increased to $275. The decision to increase the PST was a difficult one, but I must point out that Saskatchewan still has the second lowest provincial sales tax rate in Canada. The increase to the PST will raise an additional $136 million dollars this year. An amount that I must point out, while substantial, will not cover the $160 million dollar increase for our health care system. Combined, these revenue measures will raise over $180 million dollars this year and help ensure that Saskatchewan citizens can continue to rely on the essential services we have clearly heard are important. The Canadian Challenge: Funding Health Care Mr. Speaker, I pointed earlier to the fact that this budget is about choices. It is about choices that reflect the values and needs of Saskatchewan people. Health Care is a primary need, an essential service that our citizens depend on. We have heard repeatedly that our publicly funded health care system must be the first priority of this administration. Quality care is what Saskatchewan citizens have stated must be the number one concern of our government. We recognize this need and are working to ensure the long term health and sustainability of the system. Saskatchewan will spend a staggering $2.7 billion dollars on the health care system in this fiscal year. 72% of our overall increase in operating expenses, $160 million dollars, is going towards Health Care. This year’s increase in health care funding is 6.3% and will target those priority areas identified in the Action Plan on Health Care. The extra funding will help our Regional Health Authorities to reduce waitlists for surgeries and to expand diagnostic services. $1.8 million dollars will be directed to extended operating hours for CT scans and MRI services. Of the $160 million in new health funding, $115 million will go towards salaries, benefits, and medical fee-for-services so that we can continue to attract and retain the best and brightest health care professionals to Saskatchewan. We will increase funding to the Saskatchewan Cancer Agency by $6.6 million dollars. This money will help provide increased treatments, the introduction of new drugs and drug therapies. In light of ever increasing costs of prescription drugs, we will increase funding to the Provincial Drug Plan by 10% to assist people with high drug costs or low incomes. Mr. Speaker, Fetal Alcohol Spectrum Disorder is a disease with long-term complications that will affect a child and our society for years. Today we are announcing $1 million for prevention projects, enhanced diagnostics and assessment for individuals with cognitive disabilities including Fetal Alcohol Spectrum Disorder. We will invest $46 million dollars in facilities and equipment. Mr. Speaker, we will invest $19 million for diagnostic equipment. Part of those funds will allow us to purchase a new CT scan machine. This also includes $2 million for a new MRI for Regina. We will invest $27 million in health facilities that will ensure all previously announced projects can go forward. Although these are significant increases, changes in health delivery are required and will include further administrative efficiencies, changes in staff mix, facility closures or conversions, and reductions in long-term care bed numbers. Health Care now accounts for forty-four percent of our operating expenditures. The increased funding exceeds both the growth of our economy and the rate of inflation. Earlier I indicated that the $160 million dollar increase in health care spending will exceed the additional $136 million we will receive from the 1% increase in the PST. Provincial Health Care costs have increased at an average of 6.6% each year since 1999. This is simply not sustainable. At this rate health care will consume more than half of our annual operating budget in just a few short years. Saskatchewan is the birthplace of Medicare. A system valued and respected around the world for the benefits that it has provided for all citizens. A source of pride for all Canadians. Mr. Speaker, we have increased the health care budget to a record $2.7 billion dollars. Yet, even with the increased funding we understand that changes must be made. In the coming year, we will assess how our health dollars are spent and ensure that we are conducting our operations with the greatest efficiency possible. We will question how health care is delivered in our Province. This is an immense task, but we will not hesitate in our effort to seek out and implement those reforms available to preserve this valuable system. We have already made significant progress in improving our health care system. We have the Action Plan on Health Care that is guiding reforms in our Health Care system. The Plan is an evolving document that has improved efficiencies and created changes in front line care. I want to assure everyone that a well funded, public health care system remains the highest priority for this government - but we must continue with changes to the system that will ensure its long-term sustainability, or we will watch it collapse. Health care is a priority for Saskatchewan people. It is the most valued public service we have. Today, we want to encourage a debate on it’s future...not just in government, not just in the legislature, but also in our homes, and in our communities. We want to get people talking about the entire health care system. We need to talk about what it means to us, what it costs, and what the future should be. To create a better understanding of health costs, we have included a paper on health care costs in the budget summary book. We are also sending out information to households across the Province. I hope this information sparks a discussion amongst our citizens and harnesses the ideas and actions that will strengthen our health care system. Mr. Speaker, federal funding used to represent almost fifty percent of health and social program spending. It was cut drastically in the mid-1990s and now accounts for only 16% of total provincial health and social program costs in Canada. The Premier has joined with the other Premiers in urging Ottawa to increase its contribution to 25% of provincial health and social spending. Together we are a unified voice demanding from Ottawa a greater financial commitment to the public health care system. Mr. Speaker, it is time for the federal government to honour its commitment to stable, consistent health care funding. Ottawa must address its responsibility for social programs and step forward with more equitable funding arrangements. We are certainly not alone in our efforts to preserve publicly funded health care. Across the country, every province is facing similar challenges in delivering health services. They are facing the same escalating costs, the same demands on the system, and the same burden of funding the system more and more on provincial dollars. I would add that rising health care costs are also a major concern for individuals and governments in the USA and across Europe. In Canada, the reliance on provincial tax dollars is creating concern across our country. We are working in partnership with every province. Through shared purpose, we will continue to push the federal government for better funding. We are encouraged by the Prime Minister’s recent comments that the federal government is prepared to enter into meaningful discussions on implementing the Romanow Commission report. Mr. Martin has pointed to the report as the basis for reform and sustainability in the health care system. We will work with the federal government to achieve this. But make no mistake, better funding is also required to preserve medicare. We have a national health care system and it requires national support. Mr. Speaker, we can preserve the publicly funded health system. We must preserve the publicly funded health system. Investing in Our Future Mr. Speaker, this budget is about positioning Saskatchewan to have strong, continued economic and social growth in the years ahead. We have a positive outlook for our Province. Government forecasters predict our real GDP growth will reach 2.6% in 2004, a positive indication that our economy is strong. Mr. Speaker, our economy is strong. There is confidence in our continued growth and across our province there is a belief in Saskatchewan’s prosperous future. Earlier, I spoke about the budget process and how we conducted a thorough expenditure review. Priorities were maintained and funding reallocated. I am proud to announce the following new and enhanced initiatives: We are strengthening families with funding to the KidsFirst Program, allowing 60 new families to enter the prenatal program and receive support. We will add over 200 new child-care spaces, so that working families have access to safe, affordable day care for their children. We will increase Saskatchewan Child Benefit payments for single parent households and increase support through the Saskatchewan Employment Supplement for lowincome working parents. We are assisting families in securing a home of their own by investing $12.6 million dollars into affordable housing construction under the Provincial Housing Policy Framework. Together these add up to a better quality of life for Saskatchewan families and a brighter future for Saskatchewan’s children. In our communities we have partnered with municipalities. As promised, we are continuing our support with a further $10 million in this budget, a 13% increase in municipal revenue sharing grants. We will build on the $900 million dollar investment in our Highway system. This year we will resurface 325Km of the Provincial Highway System, investing $295 million dollars into road construction and maintenance. We will continue twinning both the Trans-Canada and the Yellowhead Highways. We will also invest in a “safe communities” initiative designed to fight organized crime. For our young people we will invest $500 thousand into the Young Entrepreneurs of Saskatchewan program. The foundation will provide 150 youth entrepreneurs with loans of up to $15,000 each to turn ideas into sound business ventures. This year we will launch a summer student employment program called the Green Team for young people interested in environmental management and energy conservation. Mr. Speaker, through the Centennial Student Employment Program, we will invest $2.2 million into youth employment. This funding will create 593 employment opportunities for Saskatchewan youth. We will invest $500,000 for the Aboriginal Employment Development Program creating 17 partnerships promoting Aboriginal training and employment in Saskatchewan. We will increase the Innovation and Science Fund by 25% to $9.8 million. The additional investment will support leading edge research opportunities at our universities. This year we will invest $425.4 million into Post-Secondary Education. This is 2% more than last year’s budget and will increase training seats in the Nursing Education Program, increase research funding, and continue our support for the College of Medicine. We are increasing the Post-Secondary Graduate Tax Credit from $350 to $1,000 incrementally over the next four years. In 2004 the credit will rise to $500. Operating grants to school divisions will increase by over 3% to $527.9 million, addressing teacher salary increases from the current collective agreement. This year we will also contribute $24 million to capital projects for Saskatchewan’s K–12 sector and $16 million for post secondary facilities. Education, Mr. Speaker, is the greatest investment in our future. We are committed to a quality education for our young people. To make Saskatchewan ready for the next generation. In agriculture, we will continue supporting our producers. Our agriculture sector has encountered many challenges over the past three years. The discovery of BSE has hit our livestock industry with great force. This government responded with $55 million dollars in income support for our livestock producers. Two years of drought have also had an impact. Crop yields are low, farm incomes are affected and we have responded with income support programs and crop insurance. We will continue supporting our agriculture producers with over $1 billion dollars over the next five years for the Agricultural Policy Framework. Mr. Speaker, we are committed to building a green and prosperous economy for Saskatchewan. New and ongoing initiatives include: PST rebate program for Energy Star compliant appliances. This will help reduce greenhouse gasses and create a cleaner climate. Operations at the Office of Energy Conservation will continue with conservation initiatives with Saskatchewan residents, businesses and farmers. This government will continue to encourage Economic Growth. We will double the funding for the Small Business Loans Association with $10 million dollars in funding. These extra funds will increase the loan limits by 50% for emerging and established small businesses. Key to growing our province are a skilled workforce and employment opportunities. We are investing $211 million dollars in job training and job creation. Investment Saskatchewan will invest $50 million dollars back into the Saskatchewan economy. We will contribute $860 thousand dollars to the Ethanol Fuel Tax Rebate program to encourage development in the ethanol industry and help reduce transportation related greenhouse gas emissions. Mr. Speaker, a budget represents more than numbers. Optimism for the future drives our economy. The Saskatchewan spirit is inspired and powered by an unshakeable desire to succeed and move forward. Saskatchewan citizens want to create opportunities not just for themselves, but also for their children, and succeeding generations. I believe today we have moved one step closer to that future. The role of a government is not always to do what is popular. Often it is about doing what is right - and doing what is needed. This was a difficult budget to prepare and to deliver. But one that was necessary. It is a budget that will preserve our vital public services. This is a plan that will move us forward to greater fiscal stability and sustainability. This is a plan that will secure Saskatchewan’s future. This is a plan that will make Saskatchewan the finest place to live, work, and raise a family. Thank you Mr. Speaker.