Province Législature Session Type de discours Date du discours Locuteur Fonction du locuteur Parti politique Saskatchewan 27e 4e Discours sur le budget 18 mars 2015 Ken Krawetz Ministre des Finances Saskatchewan Party INTRODUCTION Mr. Speaker, colleagues and visitors, I am honoured to rise today to present our government’s 2015-16 Budget. This is my fifth – and final – budget as Finance Minister. I’m going to still be around for a little while yet, but this does seem like a culmination of the 20 years I have had the privilege to serve in this Assembly. So there are many, many people I need to thank. The people of Canora-Pelly, who elected me five times. Thank you for your support. The many individuals and organizations I have met with over the years, as an Opposition member, as Deputy Premier, as Education Minister, and most recently as Finance Minister. Thank you for all of your ideas and advice. The many hard-working, professional public servants I have worked with – the Ministry of Finance officials led by an extremely capable Deputy Minister, Clare Isman. Thank you for your hard work and dedication. The staff I have worked with over the years in my Ministerial Offices. Thank you for your hard work, and for putting up with me. And of course, the Premier and my colleagues in the Saskatchewan Party Caucus. Thank you for your counsel, your patience, your support, your good humour,… And for giving me the opportunity to serve as Finance Minister of this great province. It has been the greatest opportunity, the greatest challenge, the greatest privilege and the greatest honour of my career. Mr. Speaker, I would even like to thank the members opposite – for all those years in government showing me what NOT to do. And, as Opposition, for performing the important democratic duty of holding the government accountable. And I would like to thank my family. I could have done precisely none of this without you. Mr. Speaker, I wasn’t going to bother getting new shoes for this year’s budget. But my family insisted that I should have new shoes for my last budget. So I am standing in new shoes today because of my family. And that seems fitting, because I quite simply wouldn’t be standing here at all today without the love and support of my family. Thank you so much. FAMILY INTROS And so, Mr. Speaker, I stand before you and before this Legislative Assembly to announce my fifth and final budget as Minister of Finance — honoring tradition, confident in our economy, proud of the budget I am about to deliver for the people of this province, and tremendously excited about the future of this great province. THE CHALLENGE OF BUDGET 2015-16 Mr. Speaker, my colleagues will tell you – I use a lot of numbers when I speak. So I want to set the stage for today’s budget with two important numbers. The first is one hundred dollars and eight cents. One year ago today that was the spot price of a barrel of oil. One hundred dollars and eight cents. Today, a barrel of oil sells for less than half that. Obviously, this number presents some pretty significant challenges when building a budget. In a moment, I will outline how our government is meeting those challenges. But first I want to note one other number – an even more important number. One million, one hundred and thirty two thousand, six hundred and forty. That’s the new population of Saskatchewan, announced just this morning by Statistics Canada. One million, one hundred and thirty two thousand, six hundred and forty. That represents growth of more than 122 thousand people in the past seven years. And it means Saskatchewan’s population has now grown more during the term of our current Premier than during the term of any other Premier since our first – Walter Scott – a century ago. That’s the strongest period of growth since the earliest days of our province. This number tells us that while our budget faces challenges, Saskatchewan is strong. Our economy is strong. Our people are strong. And this budget is all about keeping Saskatchewan strong. Despite the falling oil price, Saskatchewan’s economy is more diversified than ever and well-positioned to meet this challenge. Now, government does not drive the economy. But by making the right decisions, governments can create the right conditions for economic growth. Or, as we’ve seen in the past, governments can make the wrong decisions — such as raising taxes and failing to invest in infrastructure. Decisions that lead to economic decline and population loss. We have chosen a different path. We’re determined to avoid the mistakes of the past and make the right budget decisions that will keep Saskatchewan strong. Here are some of those decisions. BUDGET OVERVIEW One. We will keep taxes low. Over the past few years, our government has delivered the largest tax cuts in Saskatchewan history,… And this budget contains no tax increases. Two. We will continue to invest in infrastructure. Our government has already made record investments in infrastructure,…. And this budget invests an unprecedented $3.3 billion in highways, schools, health facilities and Crown sector capital. Three. We will control operating spending. This budget contains just a marginal increase in spending of 1.2 per cent, and ten ministries and agencies have seen their budgets reduced. Four. We will help the private sector create jobs. This budget contains new tax incentives for new job creation and continues to support increased training opportunities for our young people. And five. We will balance the budget. I am pleased to say – for the fifth time as finance minister… This budget is a balanced budget. Overall revenue of $14.28 billion – up just 1.2 per cent from last year. Overall spending of $14.17 billion – also up just 1.2 per cent from last year. So Saskatchewan’s 2015-16 Budget is balanced, with a surplus of $107 million. ACHIEVING FISCAL BALANCE Controlling Operating Spending Mr. Speaker, in order to get to balance without raising taxes, we had to made some tough decisions. That meant keeping our operating spending under control. This budget continues our government’s track record of investing in what matters most — in Saskatchewan people and in the types of infrastructure that our people value and depend upon most, such as schools, highways, and health care facilities. At the same time, we have made some difficult but necessary choices on the spending side with the goal of keeping Saskatchewan strong. That means some areas funded by government will receive less than they might have been hoping for once again this year. Our government’s commitment to control operating spending in this budget actually began last month with the Premier’s announcement of a wage freeze for all senior government officials, including MLAs and cabinet ministers, through the 2015-16 fiscal year. Across government, the wage freeze is expected to save about $15 million. Other Spending Reductions Mr. Speaker, investment in health, education, and social services and assistance continue to be priorities of our government, accounting for nearly three quarters of all expense in this budget. The overall operational spending lift in those key areas is just under two per cent. Categories outside those priority areas are budgeted to spend 0.6 percent less this year. In addition, the Active Families Benefit, Graduate Retention Program, Seniors’ Drug Plan, Saskatchewan Employment Supplement, and the Research and Development Tax Credit Program are being changed to ensure their ongoing sustainability. The income threshold related to the Seniors’ Drug Plan is being lowered, from about $80 thousand to about $65.5 thousand, ensuring the benefit is sustainable and continues to help those seniors with less income. The Active Families Benefit will be income tested - available to families with net incomes below $60,000 - to ensure it continues to benefit those families who need it most. The Graduate Retention Program will become a non-refundable tax credit while remaining the most aggressive youth retention program in Canada. Post-secondary graduates who stay in Saskatchewan will still be able to receive the full amount of their tuition back – up to $20,000 – through a reduction in their provincial income tax. They will now have up to 10 years, instead of seven, to use this tax reduction. The Saskatchewan Employment Supplement is changing to keep the benefit affordable and still help families with younger children, those who need it most. The Research and Development Tax Credit will now be fully non-refundable and the rate is being reduced from 15 per cent to 10 percent of qualifying research and development expenditures. These changes also help to maintain a sustainable level of support for innovation and research activities in the province. More Potash Revenue On the revenue side, a change is being made to the Potash Production Tax. The total amount of deductions which potash producers receive from their capital spending will now be utilized over a longer period of time. As a result of this change and overall growth in the potash industry, potash revenue is expected to be up by nearly $400 million this year. This change was made following consultation with the potash industry, and I note that this industry continues to show tremendous confidence in Saskatchewan. Major capital expansions are continuing, and just last week, Mosaic announced a further $1.7 billion investment in the K3 mine at Esterhazy, making this the largest potash mine in the world, and creating as many as 600 new jobs during construction. This interim step taken this year will be followed by a broader review of the entire potash taxation and royalty regime. However, any further changes resulting from are review must balance the excellent investment and operational environment for this sector, which is so important to the provincial economy, with the need for a fair return for the owners of the resource, the people of Saskatchewan. NOT RAISING TAXES Mr. Speaker, instead of controlling operating spending, our government could have made a different choice – a choice we have seen in the past. We could have raised taxes. But that would have been bad for Saskatchewan people and bad for the economy,… And this budget is about keeping Saskatchewan strong. As a result of controlling operating spending, this budget contains no tax increases. No personal tax increase. No business tax increase. No Education Property Tax increase. No increase to the fuel tax. And no reduction in revenue sharing with municipalities, which could have contributed to higher taxes at the municipal level. This budget provides $265.3 million in revenue sharing—the largest grant ever provided to Saskatchewan municipalities—an increase of $8.3 million compared to last year, and an increase of $138.0 million or more than 108 percent, from the 2007-08 Budget. In total since 2007, our government has delivered more than $5 billion in tax relief. As a result, a family of four pays no Saskatchewan income tax on their first $49,155 of income — the highest tax-free threshold for a family of four in Canada. And a family of four with $50,000 income has seen their provincial income tax cut by more than 95 per cent since 2007 — from about $2,300 to less than $100 in 2015. A single senior with an income of $25, 000 is now paying only $16 in provincial income tax for 2015. This year, consideration was given to increasing Education Property Tax, but we decided to keep the mill rates the same. Since Education Property Tax reform in 2009, mill rates have only been lowered. Mill rates have not been adjusted to keep up with inflation, growing enrolments or the increased cost of school operating over the past several years. In fact, the share of school operating funding provided by the government has risen to 65 percent, with Education Property Tax providing 35 percent—surpassing our government’s goal of 60:40. While there is no increase this year, rebalancing may be necessary in future years, in order to ensure a sustainable and equitable funding base for the critically important education sector. CONTINUING TO INVEST IN INFRASTRUCTURE Mr. Speaker, our government had another choice to make in this budget. Do we stop building? Do we stop investing in infrastructure, as we have seen governments do at times in the past… Or – do we continue to show confidence in Saskatchewan’s economy today and continue building for the needs of tomorrow? We chose to keep building Saskatchewan. Controlling operating spending also allows us to continue our government’s unprecedented investment in infrastructure. Saskatchewan Builds Capital Plan This budget begins a four-year, $5.8 billion commitment—the Saskatchewan Builds Capital Plan—to build and maintain needed core infrastructure such as schools, health-care facilities; municipal infrastructure, roads, bridges and highways. This budget provides more than $1.3 billion for core infrastructure in 2015-16, the largest infrastructure allocation in our province’s history and an increase of almost 50 per cent from last year. This investment is in addition to $2 billion in capital investment forecast this year by the commercial Crown corporations – largely SaskPower, SaskTel and SaskEnergy. Including this budget, our government has now committed more than $3 billion to core Government infrastructure since 2013-14—exceeding the Growth Plan commitment to invest $2.5 billion in infrastructure from 2013-14 to the end of 2015-16. We are continuing to build roads and highways. This budget commits $842 million in 2015-16 to building, operating and maintaining highways and transportation infrastructure, which will bring the total over the past four years to more than $2.7 billion—exceeding the $2.2 billion commitment in the Growth Plan. This includes $211 million dollars to begin construction on the next phase of the Regina bypass – the largest infrastructure project in Saskatchewan history. This budget also provides funding for significant twinning projects: - $23 million for the twinning of Highway 16, east of Saskatoon to east of Clavet; - $11.4 million for twinning Highway 7 from Saskatoon to Delisle; - $7.6 million for twinning Highway 39 from Estevan to Bienfait; and - $1.2 million for initial work on twinning Highway 6 and 39 from Regina to Estevan. This budget also includes funding for interchanges at Warman and Martensville, and passing lanes on Highway 7 from Delisle to Rosetown, and on Highway 5 from Saskatoon to Humboldt. We are continuing to support municipal infrastructure investment. This budget commits $74.5 million for municipal infrastructure in 2015-16, with plans to invest over $400 million over the next four years. Including provincial, municipal, and federal contributions, more than $1 billion has been invested in municipal infrastructure in Saskatchewan since 2008. We are continuing to build and renovate schools. This budget provides $248 million in capital in 2015-16 for K-12 schools, up over $150 million compared to last year. This is the largest allocation for school construction and renovation in our province’s history. In 2015-16, construction will begin on nine joint-use schools potentially through a P-3 procurement process in the high-growth communities of Martensville, Warman, Saskatoon and Regina. Construction will also begin on three new schools approved for planning last year — Connaught Elementary and Sacred Heart, both in Regina, and a new school in St. Brieux. This year a major renovation project will begin at Hague High School, and this budget also provides more than $28 million to complete eight other school projects started in previous years in the communities of Saskatoon, Martensville, Weyburn, Langenburg, Gravelbourg, and Hudson Bay. Over the next four years, almost $900 million will be invested to build and renovate schools. Beginning this year, school divisions will no longer be required to contribute the local share costs of major school capital projects. This policy change means the province will fund 100 percent of the capital costs for major school projects including those that have been announced but have not begun construction. We are also continuing to make significant capital investments in our universities, regional colleges and other post-secondary training institutions. This budget commits $46.6 million in capital in 2015-16 for advanced education and training, including $23.6 million for maintenance, and the balance for continued construction of the Southeast Regional College, the Trades and Technology Centre at Parkland Regional College and the Academic Health Sciences Facility at the University of Saskatchewan. The four-year plan forecasts almost $185 million for advanced education and training capital. We are continuing to invest in hospitals and other health-care infrastructure. This budget provides $256 million for health capital, an increase of over $161 million from last year. Some of the key projects include $65 million to continue construction of the Swift Current Long-term Care P-3 project which is expected to be complete in spring 2016…. And it includes funding in 2015-16 for construction of the replacement of the Saskatchewan Hospital at North Battleford, potentially using a P-3 procurement model. Several other major projects are underway, including: - the new hospital in Moose Jaw; - planning for rejuvenation of the Victoria Hospital in Prince Albert; - planning for a new acute care centre in Weyburn; - the new Leader integrated care facility; and - the Kelvington integrated care facility. The four-year plan is to invest more than $700 million in health facilities. And this budget will continue to support tourism by investing over $13 million in capital projects at Saskatchewan’s beautiful provincial parks, including new campgrounds, new campsites and the electrification of existing campsites. Financing for Infrastructure Mr. Speaker, the Saskatchewan Builds Capital Plan is an ambitious plan to address the growing infrastructure needs of a growing province. And it required our government to ask an important question. Is now the time to borrow for capital projects? Interest rates are at historically low levels. Over the past seven years, our government has paid off more than $3 billion of the province’s operational debt, resulting in cumulative savings of nearly $1 billion in interest. Last September, Moody’s Investor Services upgraded Saskatchewan’s credit rating to triple A — the highest rating possible. Moody’s said the upgrade, quote—“reflects the province’s fiscal discipline and sustained low debt levels, which underscores prudent financial management practices”—unquote. Saskatchewan now enjoys the highest possible ratings from both Moody’s and Standard & Poor’s. Overall, our province has achieved one of the highest credit ratings of any jurisdiction in North America, and the second lowest tax-supported debt to GDP ratio among the provinces. Mr. Speaker, our population continues to grow, as do our capital needs. Just as a growing family moves to a larger house when a mortgage can be managed, the province’s resilient economy, positive outlook, and sound fiscal management leading to strong credit ratings now provides a solid foundation from which to borrow in order to build. We looked at perhaps stopping or pausing some projects. But delaying much-needed projects would just mean higher construction costs in the years ahead and the infrastructure gap would continue to grow. As well, we believe that continuing major capital construction projects this year through the Saskatchewan Builds Capital Plan will have a positive impact on the economy – creating jobs and sending a strong signal that Saskatchewan is confident we will weather the downturn in the oil sector. We chose to continue building Saskatchewan,… So our government will borrow an estimated $700 million to invest in core Government capital during 2015-16, taking advantage of the current low interest rates. The balance of the Capital Plan will be funded with available cash, including $106 million from the proceeds of the 2013 sale of Information Services Corporation, public-private partnerships and federal transfers. A key aspect of the borrowing plan is the debt repayment plan. It’s okay to have a mortgage on your house, as long as you are able to manage the mortgage payments. We will manage our payments. Amounts borrowed to finance infrastructure assets will be separately identified, and at least two percent of the value of the borrowed amount will be set aside and invested each year to ensure sufficient cash will be available to repay the debt as it comes due. Borrowing for long-term capital needs, for tangible assets such as schools, hospitals, and highways that Saskatchewan people will need and use for decades is much different than borrowing for annual operations. And Mr. Speaker, let me be clear, our government will not borrow for operations. New Tax Incentives For Job Creation And Capital Investment To help keep Saskatchewan strong and also fulfil our Growth Plan commitments, this budget also introduces two new tax incentives — the first aimed at job creation, the second with a goal of generating more capital investment. Saskatchewan is already Canada’s largest per capita exporter, and we’re going to build on that strength. The new Manufacturing and Processing Exporter Tax Incentive supports the Growth Plan goals of doubling Saskatchewan’s exports and having 60,000 more people working in the province—both by the year 2020. This incentive will provide tax credits to eligible corporations that increase their number of full-time employees. In addition to the traditional manufacturing and processing sector, the incentive will also apply to corporations involved in the commercial development of new economy products for export—including interactive digital media and creative industry products. The incentive will also provide tax credits to eligible corporations that increase the number of full-time employees who do work typically considered to be head office functions. The second new tax incentive is an income tax rebate for primary steel production, supporting the Growth Plan commitment to encourage new capital investment. The income tax rebate will provide an incentive for eligible primary steel producers that make a minimum capital investment of $100 million in new or expanded productive capacity. INVESTING IN PEOPLE Increasing Training Opportunities For Young People We believe these incentives and the overall strength of Saskatchewan’s economy will continue to lead to new job creation in our province. Our government remains committed to ensuring our young people have the skills and training they need to take on those new jobs. This budget provides for various training opportunities to help develop a skilled work force, vital to a growing province. In fact, Mr. Speaker, when asked about the number one challenge businesses face in Saskatchewan, owners and executives say loud and clear it is about finding and keeping skilled workers. And it all starts with training. We are continuing to invest in the training of nurses and doctors with the provision of nearly $27 million, up more than 10 percent from last year, to fulfill three medical training commitments: • 100 medical training seats; • 120 medical residency seats; and • 20 new nurse practitioner seats. This budget also helps Saskatchewan people complete their Adult Basic Education or A-B-E, enhancing their employment prospects and quality of life. This year 200 additional ABE seats will be added, bringing the total to 8,780 through a total investment of more than $25.6 million in 2015-16. As a result, we expect to meet our Growth Plan commitment to eliminate the A-B-E waitlist in 2016-17. Our diverse economy also needs more skilled tradespeople. This budget provides $1 million in additional funding to add 300 more apprenticeship training seats this year. This brings the total number of training seats to 7,000 in 2015-16 at a total cost of about $23.2 million. This budget also includes more support for Aboriginal students and training programs. We are increasing the operating funding for the Saskatchewan Indian Institute of Technology by more than 22 per cent in this budget to a total of nearly $2.2 million in 2015-16, to better align SIIT’s funding to other technical institutes. Overall, this budget provides more than $210 million for targeted program funding for First Nations and Métis people, including a significant portion for training and employment initiatives. Mr. Speaker, we are committed to supporting students and this budget includes a $1 million increase in the Provincial Training Allowance, bringing the total to more than $32 million, to cover living costs associated with the additional A-B-E seats while people attend training. We are also providing $3.25 million in total for the Apprenticeship Training Allowance to support the increase in training seats. The Student Aid fund, including grants, bursaries and student loans amounts to $32.5 million in this budget. The Saskatchewan Advantage Scholarship - which lowers tuition costs for every Saskatchewan high school grad - is $9 million, an increase of $2.3 million from last year. There is $5.5 million for a number of other scholarships and $6.5 million for the Saskatchewan Advantage Grant for Education Savings. Our commitment to students supports accessibility to post-secondary education and the future of our province. Health Health spending by the Ministry of Health, health regions, and agencies such as the Saskatchewan Cancer Agency will increase about 1.1 per cent in this budget to $5.5 billion. That includes $3.3 billion in Regional Health Authorities—an increase of $55.7 million compared to last year—for operating funding and for targeted initiatives. Much of the increase in operational spending in 2015-16 will go to increased compensation for health-care workers—the people on the front lines who ensure the system is providing the best possible care to Saskatchewan people. Seniors’ care will be improved with $10.0 million in targeted new funding in the 2015-16 Budget, bringing the total to $14.5 million specifically for enhanced seniors’ care initiatives. Funding includes a $3.5 million increase dedicated to enhance the Home First program, bringing the total commitment to $8.0 million, and a $2.8 million increase for Dementia/Behaviour Units in Regina and Saskatoon. In addition, $2.0 million in this budget will provide increased choice and flexibility in care options for home care clients, $1 million will improve quality and safety in long term care, and $700,000 will develop a new geriatric program in Regina. This budget includes $3 million in additional funding to help reduce emergency department wait times and improve patient flow. And it includes almost $300 million for the drug plan, and more than $157 million for the Saskatchewan Cancer Agency. Education This budget provides $3.7 billion for education spending, which includes the budgets of ministries responsible for Pre-K to 12 and post-secondary education, along with boards of education and other government entities that provide job skills training and other educational programs. That $3.7 billion allocation represents a 2.8 percent increase in education spending compared to last year. It also means that education spending under our government has grown by more than 32 percent since 2009—the year the province began to set Education Property Tax mill rates. This budget includes nearly $1.87 billion in total school division operating funding, an increase of 2.9 per cent. That includes nearly $960 million for teacher salaries which includes increases based on the recent settlement. And it includes $965,000 for the initial operating year of the Teachers’ Self Regulating Professional Body. This budget includes more than $661 million for post-secondary operating funding. That includes operating increases of one percent for universities, affiliated and regional colleges; and two percent for technical institutes and federated colleges. Social Services Spending on social services and assistance—to help provide for those most vulnerable in our society, including seniors and people with disabilities—will grow by about 3.2 percent this year to a total of $1.2 billion. This means that, under our government, spending on social services and assistance has grown by more than 34 percent since 2008. This budget continues our government’s unprecedented investments on behalf of Saskatchewan people who are most vulnerable. For example, it provides more than $200 million, an increase of almost $27 million or 15 per cent, for the Saskatchewan Assured Income for Disabilities program. This fulfils our platform commitment to increase benefits each year for four years and also responds to strong program demand. This budget provides more than $159 million for the Saskatchewan Assistance Program, up 4.4 percent, as a result of cost per case increases and program uptake. This budget provides more than $160 million to assist people with complex and emerging needs. It provides more than $62 million, an increase of more than five percent, for out-of-home care for children in need of protection. And – for the eighth consecutive budget – we will increase the monthly benefit under the Seniors Income Plan. A 10 dollar a month increase on July 1, 2015 will mean that since 2007, Seniors Income Plan benefits will have tripled to $270 a month – after being frozen at just 90 dollars for the previous 16 years. Those are just a few of the many, many examples of how we are making much-needed investments in the areas of health, education, and social services to improve our quality of life and keep Saskatchewan strong. Summary Budget As we announced in 2014-15, Saskatchewan has moved to a single Summary Budget and financial reporting, consistent with the recommendation of the Provincial Auditor. Over the year we have transitioned a number of our reports, including first and third quarter summary reports (for the first time ever). We indicated last year the transition will take time and that our work is continuing. One new change in this budget is the separate presentation of the pension adjustment to account for the pension expense on an accrual basis. This new presentation highlights and explains the adjustment. Maintaining a Strong Base In this budget, spending on the broad themes of health, education and social services and assistance accounts for nearly three-quarters of all government expense, or about $10.4 billion—up 1.9 per cent from last year. That’s a smaller increase than previous years. Since 2007-08 spending on health, education and social services and assistance is up 67.7 per cent, or $4.3 billion. This year, we will continue to fully fund agricultural business risk management programs, like AgriStability, AgriInvest and Crop Insurance. In fact, the Minister of Agriculture recently announced enhancement to 2015 Crop Insurance coverage, lowering producer premiums while increasing coverage levels. Overall, while this budget required our government to control operating spending, this budget maintains funding levels that ensure government ministries and third-party sectors can continue to sustain important programs for Saskatchewan people. CONCLUSION So there you have it: the 2015-16 Saskatchewan Budget. A budget that keeps taxes low. A budget that controls operational spending. A budget that continues to make much-needed investments in schools, highways and hospitals. A budget that will help Saskatchewan businesses create new jobs and ensure our young people have the training they need to fill those jobs. A budget that is balanced. A budget that will keep Saskatchewan strong. Mr. Speaker, there is no doubt this is a challenging budget. But the good news is — Saskatchewan has never been in better position to meet this challenge. More people live here than ever before. Our unemployment rate continues to be the lowest in Canada. Exports are at an all-time high. Businesses continue to show tremendous confidence in Saskatchewan’s future through major capital investments. But what gives me the most confidence is our people…. Saskatchewan people. Cautious, yet confident. Humble, yet self-assured. Hard-working and compassionate. And always optimistic about our province’s future. So, as I conclude my final budget speech, that is why I can say with confidence that Saskatchewan will meet these challenges. Because Saskatchewan is strong. And our best days are still ahead.