Hon. James McCrae (Government House Leader): Madam Speaker, as discussed previously, I would hope that we could move now to Interim Supply, and depending on the progress we make tomorrow, as I said, we propose that Wednesday would be an Opposition Day and that we would return to Interim Supply, should that be necessary, on Thursday.
Madam Speaker: It is my understanding that there is agreement now to move into Interim Supply. [agreed]
Hon. Eric Stefanson (Minister of Finance): I move, seconded by the Minister of Environment (Mr. McCrae), that Madam Speaker do now leave the Chair and the House resolve itself into a committee to consider of the Supply to be granted to Her Majesty.
Motion presented.
Mr. Leonard Evans (Brandon East): Madam Speaker, I was standing and I intend to debate the motion.
As I indicated, I had been standing because I believe this is a debatable motion, and we would like to take the opportunity to put a few remarks on the record. Of course, we will have more remarks to make as we progress through the Estimates and quiz the government on its various spending initiatives. I cannot but help reflect that generally what we have got from this government by way of spending and taxing, put together as a budget, is nothing more than a shell game when it comes to the bottom line.
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We get a shell game because of the Fiscal Stabilization Fund, where you put money in on one hand and then you take money out on the other hand. I think the minister has to admit that he would not have a surplus to show to the people of Manitoba this year if he had not taken an additional $60 million out of the Fiscal Stabilization Fund to put it into revenue. If he had not put that $60 million, and he has got it by way of a footnote now instead of a line, which was the case in previous years, if he had not had that $60 million, he would not have had a $23-million surplus, he would have had a $37-million deficit.
Well, that is the case. The minister is shaking his head, but that is the case. If you did not put the 60 in, you would have had a deficit. It is simple arithmetic. All you have to do is look at your budget documents, look at the financial statements right on page 22, I believe it is, of the budget document, Financial Review and Statistics appendix, and it is quite clear that there is an additional $60 million added at that point. In fact, there is a footnote. Footnote No. 3 includes $60 million from the Fiscal Stabilization Fund. The simple arithmetic would show you that this would end up with a budgetary deficit of $37 million.
To make matters even more confusing, the minister then turns around and takes that $23-million surplus and puts it back into the Fiscal Stabilization Fund, so that when you look at his table on the Fiscal Stabilization Fund, it shows on page 10 of the Financial Review and Statistics section quite clearly that that $23 million is now being put back into the Fiscal Stabilization Fund.
It seems to me rather ridiculous, Madam Speaker. I suppose if you wanted to do this, why not only take 37 million and then you would not have to take as much out in the first place and you would not end up putting 23 back in.
This, to me, is a very confusing matter, and I would say it misrepresents the real budget situation. I would even use the words, it is deceiving. It is deceiving, if you say: my gracious, we have a $23-million surplus, but that, thanks to footnote No. 3, is because we have taken $60 million out of the fund, and then when you get to the bottom line, you have $23 million surplus, you put that back in. There used to be an old song, when I was a kid, called "the music goes round and around and it comes out here." Well, in this case, the monies go round and round between the Fiscal Stabilization Fund and the general accounts, in and out, in and out, to make the government look good on the bottom line. That is what it is all about, and I therefore would say, Madam Speaker, that this makes the budget document more of a political document than one would want to see.
The Fiscal Stabilization Fund is becoming a fudge fund. I know we talk about it as a rainy day fund but I thought it was not raining right now, so why are we taking money out of the fund anyway? So, Madam Speaker, and as I said also previously that $60 million, that amount that was taken out of the fund and put up with own-source revenue in previous years would have been on a line called Deficit Reduction Transfers, because if you go back to 1992-93, for example, $200 million was taken out of the fund, put into general revenue to reduce the provincial deficit of that year. So the question is: why is that $60 million not just put in that particular position so we can all see it, rather than virtually hidden up on own-source revenue with the little footnote No. 3 saying, well, we took $60 million out of the fund to put there? At any rate, that is in addition to other monies taken out of the fund.
Madam Speaker, another observation I would make is that in this budget and in the government's approach to spending, while we all want to see a lower debt, we all want to see a reduced debt, I would suggest that there is overemphasis put on the debt situation of the Province of Manitoba. Certainly compared to the Ottawa situation, we are in a relatively good position. Our debt as a percentage of the gross domestic product is 22.2 percent. This is the net general purpose debt as a percent of our GDP, 22.2, and I might observe that was more or less what it was back when the government took office. It was around 21-22 percent around that time. It did go up in their mid-term, particularly in the mid-'90s, because the government had higher deficits for various reasons, but now it has been coming back down, so we are today where we were back over a decade ago. But compared to Ottawa, I believe the federal government is running a general purpose debt as over 70 percent of the gross domestic product, well, 71 percent or whatever, well over 70 percent as a percentage of the GDP and in a far worse position than the Province of Manitoba.
Of course, if we look at other elements, other statistics on the debt, we can note that debt as a percent of revenue debt costs, that is the interest on the debt, as a percent of revenue, has come down slightly, but it never was--well, when this government first took office it was around 10-11 percent. It did go up again during the mid-term of this government, early to mid-90s, again, to be quite open and honest about it, because of a recession at that time which reduced government revenues, in '92-93 in particular when government revenues were down by 8.4 percent. But 9.2 percent as a percentage of total revenue, the public debt cost as a percent of total revenue, or if you look at it as a percentage of total expenditure, you get the same pattern. It was around 10 percent in 1989-90, and they are down to about 9.4 percent now.
The minister in his own document indicates that we compare favourably with other provinces in terms of debt servicing costs. There is a table on page 13 of Financial Review and Statistics showing Manitoba is in the third lowest category; that is debt-servicing costs as a percent of total expenditures in the year 1997-98. Only British Columbia and Alberta are in a better position.
So I suggest, Madam Speaker, that there has been over-emphasis on the debt, and that additional payment on the debt has been at the expense of monies that could well have been spent in health care, and people of Manitoba get very furious. I received a letter today where people complain about the cuts to the health care system--treatment, in this case, in a personal care home of the parents of this individual--and they could not understand why there were these cuts in health care in her particular region, in the Westman area, when we had money in a Fiscal Stabilization Fund and when she reads, and we all read, about an additional $75 million paid down on the debt.
Madam Speaker, the minister is proud of the fact that he reduced income tax, personal income tax, as a percentage of the federal tax by two points in two stages, bringing it down from 52 to 51 this year and from 51 to 50 next year, and while a lot of people may benefit from that, unfortunately the greatest benefit will go to those with the highest income. The higher income levels are obviously going to benefit more from that kind of a tax cut, and I would argue that a more equitable approach would have been to ease up on some of the retail taxes that we impose in this province.
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In fact, maybe we should go back to pre-1993 when the government then extended the sales tax to levy sales taxes on meals under $6, on personal hygiene products, on school supplies, on baby expenses. It was a significant increase and a burden on people who were raising children or who were having to buy school supplies and so on. In fact, as we referred to in the past, there is a government document showing the sales tax impact of around $53 million. That was an increase of $53 million on the people of Manitoba.
I would suggest, Madam Speaker, if we took a look at the sales taxes and try to give some relief through that system in certain specific categories, particularly for children, for babies, that this would have been much more equitable. In fact, it would have been more stimulative of the provincial economy. We would also urge that rather than this type of across-the-board income tax cut that we have a property tax relief system. We suggested 75, because that is the amount that the government took away back in 1993 when it was estimated at the time of the 1993 budget being brought down, and that, in turn, had a great impact on people. In effect, it was like a tax increase because we removed a tax credit. This is something that we would have urged, and, again, at a more equitable relief for people.
As I said, the income tax cut is fine if you are in the higher income brackets. It does not mean very much for a lot of working people in this province. Surely, if the minister and the government wanted to go the income tax route, they could have done it in a far more equitable way, so that people in the lower categories would get some relief, and the people in the higher income categories should just proceed along without any relief at this point if this is all the government can do.
I know in past statements, many ministers on the government side have blamed Ottawa. You know, Ottawa made me do it; we have to cut health care because Ottawa has cut us, and we had to keep the lid on other spending, education, social services, and so on. But, Madam Speaker, although indeed the Canada Health and Social Transfer was cut, in the last couple of years it has now been stabilized at around $499 million, $498 million, but counteracting that has been an increase in stabilization. I note the stabilization monies have gone from $1.021 billion last year to $1.061 billion in the 1998-99 budget year. So, in effect, equalization increase has mostly made up for the reduction in the health and social transfer cuts.
The minister made a statement in the budget debate, and he has stated elsewhere since then, that his approach to budgeting, working towards surpluses and balances, this is how to create jobs in the province of Manitoba. I would submit that this is absolutely wrong. The economic and financial statistics do not make the case for the minister.
If you look carefully at the data, you will see that when we had a sharp decrease in revenue is indeed when we had large deficits, and that decrease in revenue was a direct result of an increase in unemployment. The fact that we had fewer jobs or, putting it another way, the fact that we were not having the job creation we wanted, led to a cut in revenues because people were unable to pay the income taxes or the sales taxes and so on.
So that it is just the reverse from what the minister was promoting or suggesting in his budget document; that it is jobs and, therefore, economic growth that allows for surpluses and not vice versa. In fact, I would suggest that whenever governments run surpluses, especially if you are under a--as long as you have some unemployment--when governments run surpluses, they are actually taking a deflationary move. They are taking monies out of the circulation, and you have a less buoyant economy on that account. Most economists accept this reasoning. That is pretty standard in macroeconomic textbooks, that if governments run surpluses they are withdrawing funds out of the circulatory system we have. Conversely, if governments engage in deficit spending, that has a stimulative impact. Again, I am suggesting this is a situation where you have less than full employment.
In 1992-93, indeed, revenues were down 8.4 percent, and the reason for that is because jobs were down, if you want to put it that way. We had more unemployment, more people out of work, and the revenues fell.
On the matter of the economy, again the minister makes much ado about the growing Manitoba economy, and, let us face it, we have been in a better position the last couple of years than were for many years before, certainly in the mid-'90s. But looking at the--we tried to draw this to the minister's attention last week in the Question Period--if you look at the figures now from the labour force survey, looking at Statistics Canada reports, this little blue document that we can get every month from Ottawa, you see that there is a flattening of employment growth in the last few months. [interjection] Well, depends on which side of the House you are on, Madam Speaker, because I recall the Premier on this side making great speeches as Leader of the Opposition, and he took the same tack, criticized the economy, criticizing the lack of jobs and so on, and that made him happy, you see. It made him happy. So now he is accusing us of being happy by pointing out that there has not been this employment growth.
In December of 1997--these are seasonally adjusted figures, so that is supposed to take the seasonality out so that you can compare one month to the next, rather than one month of the year compared to the same month of the previous year. Employment was 542,600, and then it dropped to 542,400 in January, and it dropped again in February to 541,100 persons. In other words, there was a drop last month of minus 0.2, and from year to date, minus 0.3.
What I am suggesting, Madam Speaker, even though we had some job growth the last year, year and a half or so, if you look at what is happening now, you see this flattening out. I guess the minister has to ask himself: why is the economy flattening out in terms of job creation at this point if things are so great?
Similarly, related to that, the minister should ask himself: why has there been a sharp increase in the exodus of people? I would admit that there has been a reduction in the exodus for a number of years, which was good. The rate of outward migration fell for a number of years, although we always had a negative situation. But now we are in a position where this has come to a halt and we have had the sharp increase in the exodus of people from the province of Manitoba.
The first three quarters or the first nine months of 1997 we lost nearly 5,000 people to other provinces. That is on a net basis. If you take all those who came in and subtract all those who left, we lost nearly 5,000, which is two and a half times the amount of loss in the same period in the previous year, namely 1996.
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Incidentally, if you want to add all this up, you might find that since this government took office, in 1998 we have lost over 61,000 people on a net basis to other provinces. What is particularly interesting in these figures is that while we usually lose to Alberta and B.C., it is not common for us to lose so many people to the province of Saskatchewan. In the first three quarters of 1997, we have lost nearly 800 people on a net basis. I think there is something significant about that. I think it would suggest that maybe the pastures are indeed greener to the west of us in the province of Saskatchewan, not to speak of Alberta and B.C., where most of the people have gone.
That has been the traditional pattern, leaving Manitoba and going to B.C. and going to Alberta, but here we have Saskatchewan which, in some years, it has been the reverse. If you look back, '89, '90, '91, '92, we were gaining people from Saskatchewan. The odd year we lost, but this year we have lost big time. We have lost 800 people in the first nine months of the year, so that should cause the minister to pause and ask himself exactly what is happening to the economy.
I think this is very, very sad, and you might say, well, this is something to do with the urban development of the larger cities in North America, and that is the deterioration, the continued deterioration of downtown Winnipeg. I appreciate there is some effort being made now to again rejuvenate it, but I suggest to the minister and others to take a walk from Portage and Main down to The Bay, and it is just frightening the number of offices, the number of buildings, the number of stores that are closed. They are boarded up, they have got For Sale signs on them; they have got For Lease signs on them one after the other. There is one block, almost the entire block was boarded up.
I appreciate that we have such a thing as the Portage mall and there are people up there, but, you know, if we had this vibrant, dynamic economy that the minister would like us to think, why do we have this deterioration in the centre of Winnipeg, famous Portage Avenue? Portage and Main up to the Bay, it is really sad to see the vacant, dirty, old buildings. They are an eyesore, boarded up, painted, graffiti, dirt, and what kind of a message does that give to tourists and visitors to our city when they come out of a hotel and maybe walk around in the afternoon or the evening to get a little fresh air, and they see this? It is just amazing, and you do not see that in other western Canadian cities. I submit, you do not see that in Regina or Saskatoon or Calgary or Edmonton or Vancouver or Victoria. You do not see this, but we certainly see it in Winnipeg.
The other day, I learned of some young entrepreneurs who had set up a retail business on Graham Avenue. They tried it for a few months, and they decided there just was not the business to be had. It was time to go, and they are packing up to go to Victoria. This is sad. We do not like to see our young people, our young entrepreneurs, go, but they went because their experience indicated they did not have the market here. It was just impossible to really make a go of it with their particular type of retail business.
I think also what the minister should be concerned about in terms of the economy is what is happening to real wages of workers. Since 1988 when this government took office, since this government took office, the average weekly earnings of workers has declined by around $79 a month, almost $80 a month in real purchasing power. The average worker in Manitoba today has $78.90 per 30-day month less in purchasing power than he or she had in 1988, the year this government took office. In contrast, the federal scene, the national scene, real wages have actually gone up. They have actually increased $11.74 a week or about $50.31 per 30-day month.
The question I ask is why is it that real wages have increased nationally but have diminished in the province of Manitoba? The minister has to answer that question. He has to concern himself about that. What has happened, of course, in this process is that real wages, which are much lower than the Canadian wages back in '88, are even lower today than they were, vis-a-vis Canada, in 1988. In other words, our position has deteriorated in that period of time. In 1988, the real average wage was about $38 higher per week in Canada than in Manitoba, Canada as a whole, about $38. Today, the spread is $69, almost double in terms of us being under the Canadian average, and that is a serious concern.
It should be a serious concern to this government and to this minister. Why is it that our average worker--and when I say worker, I am talking about the industrial aggregate, and that includes not just factory workers, it includes office workers, it includes white collar workers, every industry category you can think of, agriculture, manufacturing, construction, retail trade, transportation, public utilities, the whole works, the whole gamut. Every industry sector taken together, take the average, and that is what the situation is.
I would be the first one to admit and to argue that the Manitoba economy does not perform in isolation to the rest of Canada or in isolation, indeed, to North America or to the world economy. To the extent that we have grown in the last couple of years, I would suggest, Madam Speaker, the extent to which we have grown has been as a result of our being a part of a national economy, because indeed the Canadian economy has expanded in that particular time and will, hopefully, go on expanding, as will the American, but if the American economy slows down, I would submit that the Canadian economy will be slowing down thereafter, and the Manitoba economy will be adversely affected.
I am not suggesting for one moment that provincial policies do not have a bearing--they obviously do--but provincial policies are only one element in the pie. They are only one element at work in determining the level of economic performance in Manitoba.
The Royal Bank is predicting a slowdown over the next two years. As a matter of fact, the minister himself in his budget book has predicted a slower rate of growth for this year compared to last year. The Royal Bank notes that the slower rate of growth will occur over the next two years in Canada, and they also observe that Manitoba should slow down in line with the Canadian economic profile.
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So, Madam Speaker, I am suggesting that what we are looking at here when we talk about economic growth we should be happy with it. But there are a lot of factors, a lot of elements of our economic situation that we should be concerned about: declining real wages; at the present time, a significant outward migration, including to Saskatchewan; and also a flat situation in terms of employment growth. As a matter of fact, when you look at the employment figures, you see that there has been a decline in the last few months in the labour force size. The labour force is smaller in February '98 than it was in December of last year. There has been a decline in January and then again in February, and this is after you take the seasonal factors out. It is not because of winter. It is because, after you take all the seasonal factors out, it would indicate something wrong with the business cycle at this point.
Madam Speaker, I want to make one last observation at this point, and that is the surplus the minister likes to brag about. The financial surplus has been at the expense of a growing social deficit. There is nothing magical about coming up with a surplus if you cut spending across the board, if you cut back in various areas in education or health or social services, or if you squeeze it so that those expenditures do not keep pace with inflation; or, on the other hand, if you have a tax situation where you are continually getting more taxes because of bracket creep, among other things, when you automatically get more income taxes. I note, even with the tax break, that the minister is giving the two points, a one point this year and another point next year, even at that, there is going to be more collected by way of personal income tax from the people of Manitoba.
The fact is, though, that we have an increasing social deficit. Our health care system leaves much to be desired. We hear day after day, not just in this House, but across this province and in all kinds of centres, the tragedies and horror stories about the health care situation. Recently I brought up the situation of the lack of pediatricians in Brandon, and that situation does not seem to be on its way to being resolved. Local officials say that they do not see any immediate solutions at hand, so--[interjection] There has been a statement made in the paper by the CEO that--[interjection] I can only indicate what I have just read in the paper, and the minister is free to do that as well.
Mr. Marcel Laurendeau, Deputy Speaker, in the Chair
I have seen the CEO from time to time. I have talked to him from time to time, of course, in various situations. I have not discussed this personally with him, but this is the statement that was made and that should concern the minister. At any rate there are all kinds of stories that come up about inadequacies in the health care system, and we have a lot of good people in the health care system. A lot of people are trying, but the fact is that it has been starved. In the budget of the Brandon General Hospital, it has been cut about $6 million the last four or five years. I submit the government has simply gone too far, and there is evidence of that. There are all kinds of detailed examples of that.
Pharmacare. We give less assistance today with our Pharmacare program than we did a few years back and certainly less than when it was administered under the previous NDP government. It is sad because a lot of people in the middle income bracket or low middle income bracket who are getting less help with the purchase of drugs today may unfortunately decide not to purchase the medicines that their doctors have prescribed simply because of the additional cost.
I remember having a lengthy discussion at one point with a representative, a chemical engineer from Ayerst Organics people who are into producing various kinds of drugs and so on in medicines, and he said categorically, the cheaper you make the drugs for people, the better it is for all of us, because people will take their medicine and hopefully stay out of a hospital or stay out of a nursing home if they take the prescribed drugs that their doctors have recommended. The fact that you increased the cost now to Manitobans and there are categories--maybe if you are very wealthy, it does not matter or maybe if you are very poor it does not make any impact on you, but there is a middle group there that are being negatively impacted, and I think that is a backwards step.
Then I go back to my example that I really get upset about whenever I think about it and that is before this particular minister took office as Minister of Health (Mr. Praznik), and that is the total elimination of the Children's Dental Program in rural and northern Manitoba. That was a fine program, a low-cost program. We have lessened enormously the level of dental health in Manitoba because of the elimination of that program. It is sad. So I say the social deficit is rising.
Similarly in education, larger classes. Universities being very much shortchanged for adequate funding, so much so that the standards that are offered by some of our universities begin to look rather shabby compared to universities elsewhere in the country. I refer to the Maclean's magazine article. Once a year they come out and compare universities and unfortunately, and I am sorry to say this because I am a graduate of that university, the University of Manitoba, that it does not fare as well as it should and could with other Canadian universities. I submit that the basic reason is because they have been starved for funding.
There is no question that people have given up $75 by way of property tax rebates. The government eliminated those rebates. That is an increased burden on householders, and, of course, I mentioned the extending of retail taxes back in 1993. There are other examples you could look at and say our social deficit is rising. It has risen because this minister has determined that he is going to put so much into debt retirement, and that he is going to run his fiscal ship in such a way as to come up with a surplus.
I have talked about health before, but I just want to mention once again a very shocking situation where we are getting examples of individuals and families going out and hiring private nurses and nursing agencies to come into our publicly funded nursing homes and hospitals to provide service that should be provided by those institutions. You talk about a two-tier system; there it is in spades.
I am beginning to find more and more examples of this occurring throughout this province, and that is something that should be very much a concern of the minister and should have his top attention. Why do nursing homes in this province and hospitals find it necessary from time to time to bring in private nurses or make contracts with private nursing agencies such as We Care to submit a service, to supply a service that should be provided by the existing staff?
If existing staff cannot cope, it is obvious that they have been underfunded; the nursing home or the hospital has been underfunded for those services. It is time that adequate funding be provided to a nursing home or to a hospital so that this situation is corrected, that we do not require a person to hire We Care and pay hundreds and hundreds of dollars. Well, the one example I gave in Killarney--and I gave the details to the legislative assistant to the minister, the names and so on--I think they were paying something in the order of $1,100 a month for this nursing home for the mom, a 94-year-old lady in a nursing home. I think the rate they were paying We Care was something like $800 a month in addition to that for a couple of hours assistance per day throughout the week.
At any rate, I believe they terminated the contract with We Care, and they have made other arrangements. But the principle still stands: they are still bringing in people from outside. They are hiring someone to come and provide the assistance that should be supplied by the home.
Mr. Deputy Speaker, I have gone on at some length, but we wanted to put on record some basic concerns we have about this spending and taxing program of the government and our concerns about the economy, and to again remind the government that they can brag about a financial surplus but what we have seen arisen under this government is a very serious social deficit. What we have to ask ourselves in the long run, with budgets and actions and programs of government: to what extent has the quality of life of Manitobans been improved, or to what extent have we caused them to be lessened, to deteriorate.
The object of any budget should be, surely, to improve the quality of life for Manitobans. That should be the objective, not whether we have a $23-million surplus or a $37-million surplus or a balanced budget. Thank you, Mr. Deputy Speaker.
Mr. Deputy Speaker: Is it the will of the House to adopt the motion?
Motion agreed to.
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Mr. Chairperson (Marcel Laurendeau): The Committee of Supply will please come to order. We have before us for consideration a resolution respecting the Interim Supply bill. The resolution reads as follows:
RESOLVED that a sum not exceeding $1,845,435,095, being 35 percent of the total amount to be voted as set out in the Main Estimates, be granted to Her Majesty for the fiscal year ending the 31st day of March, 1999.
Does the Minister of Finance have any opening comments?
Hon. Eric Stefanson (Minister of Finance): Yes, I do. I will be very brief, but I cannot help but respond to a few of the comments from the member for Brandon East (Mr. Leonard Evans), because unfortunately I think he put some inaccurate information on the record, and I certainly challenge some of the comments that he did make in terms of his response to the bill.
First of all, he talks about the budgeted surplus of $23 million and the utilization of the Fiscal Stabilization account and so on, and I think it would do him well to review what others are saying about this budget. I will just point out to him the response of two or three organizations in terms of what they said about Manitoba's budget. These are people who have the expertise in terms of looking at provincial budgets right across Canada, look at the federal budget and have been doing this for years.
The first one I will read is from financial analysts, Nesbitt Burns. Their headline read: more surpluses in the hopper. I could read many quotes from their response, but I will read just one, and this is a quote from Nesbitt Burns. Manitoba has brought down yet another fiscally sound budget that manages to accomplish a wide variety of goals. Manitoba is notable not only for being the most lean provincial government in the country--spending is the lowest on a per-capita basis--but also for its tough, antideficit, antitax legislation.
Another financial analyst, Scotia Bank, went on to say that Manitoba's fiscal year '98-99 budget plan projects a small surplus, $23 million, its fourth consecutive annual surplus while maintaining progress on all its longer-term priorities.
CIBC summarized Manitoba's fiscal circumstances this way, and, again, I quote: A track record of successive surpluses and a strong economy have made this year's tax cuts possible. What has become a solid history of fiscal responsibility is expected to pay dividends over the coming year.
Mr. Chairman, that is just a snapshot of what some of the experts have been saying about Manitoba's budget, and I would encourage the member for Brandon East (Mr. Leonard Evans) to take the time to read and to look at what others are saying about Manitoba's 1998 budget.
Now, Mr. Chairman, the member for Brandon East referred to a song, and he talked about the music going round and around, and I think if he needs to look for that music, all he need do is go back to the period 1981 to 1988, if he is looking for music going round and round, when we had an era of high deficits every single year. As a result of those high deficits, we had an era of high taxes and tax increases each and every year, and we had an era where our debt was going up at 25.5 percent each and every year. If you want to look for music going round and round, that was certainly a period of time, but it was not music that was good for Manitobans or that they enjoyed.
That was a period--and I will not do it again because I do want to get on to questions, but I have read into the record on previous occasions many of the dozens and dozens of tax increases that were brought into Manitoba during the period of 1981 to 1988 under that previous NDP administration, and I also have pointed out that that was a period of time where our debt quadrupled and our debt increased at an average rate of 25.6 percent each and every year, Mr. Chairman. So, again, that was a period of time that was certainly not supported by Manitobans and obviously not in the best interest of our province.
The member for Brandon East (Mr. Leonard Evans) asked about why are you using the rainy day fund, and he calls into question us using the rainy day fund, Mr. Chairman. First of all, Manitobans suggested that if we had an opportunity we should use it where it makes sense, and in this particular budget we use it in three or four key areas. We use some of it to pay down our debt at a faster rate; we use some of it to cover our share of the 1997 flood costs; we are using $60 million of it to continue to bridge the significant reductions in funding from Ottawa; and we are using $50 million for some one-time capital funding for our highways, for our residential streets, for our sewer and water and so on, all very important initiatives. So, again, I am wondering why the member for Brandon East is calling those kinds of things into question and particularly when his own Leader, I believe, just this last weekend--I think his Leader was out in the city of Brandon--was calling for us utilizing that very account, so there seems to be, again, some inconsistency in terms of that message that is coming from members opposite.
The member for Brandon East also calls into question the whole issue of paying down the debt, and this one really does bewilder me, that he and some of his colleagues cannot seem to make the link of the importance of paying down our debt so that by paying down our debt we reduce our interest costs, and by reducing our interest costs that gives us more choices and more flexibility in terms of either spending on priority areas, paying down the debt at a faster rate or continuing to reduce taxes.
I want to read just very briefly to the member for Brandon East (Mr. Leonard Evans) from a budget, and I encourage him to read this budget and I will quote from it, Mr. Chairman. It says: Mr. Speaker, Saskatchewan people know that the buy now, pay later philosophy does not work. We are determined to keep paying down the mortgage on our children's future.
They then go on at length to talk about debt, and they carry on later on in this section: Mr. Speaker, five years ago nearly 19 cents out of every dollar collected in revenue went to pay interest on the public debt. This year, we will pay 14 cents on the dollar. That means--this is the Saskatchewan budget--more money to invest in people for jobs, education, health, highways and lower taxes, and most important, it provides the financial freedom our children will need to prosper in the new century.
That is directly out of the 1998 Saskatchewan budget that was just tabled last week, Mr. Chairman, in the Saskatchewan Legislature, an NDP government in Saskatchewan making those very telling statements and statements that I agree with in terms of their view of the need to be retiring their debt in that particular province.
Mr. Chairman, the member for Brandon East (Mr. Leonard Evans) calls into question the across-the-board tax cut. Again, we have had the Province of Alberta this year introduce an across-the-board tax cut; the Province of Saskatchewan, in this budget they brought down last week, an across-the-board tax cut; and again, in terms of our ability to stay competitive, it is important to ensure that our taxes are competitive with other provinces and other jurisdictions and an across-the-board tax cut enhanced that ability to maintain our strong competitive position here in our province. At the same time, it does pass on a benefit to all Manitobans, putting more money in their pockets that they can spend as they need, they choose, they see fit, and obviously that money will work its way into our economy in many different ways, and we will all benefit as a result of that.
I guess the one other area I was a bit surprised at or flabbergasted about was the member for Brandon East's support, what appeared almost to be support for the federal government's funding reductions, accused us of blaming Ottawa. Well, I have certainly heard his own Leader on occasion join in, in terms of blaming Ottawa, for the significant reductions in funding for health and post-secondary education. The suggestion that equalization has made up for that reduction is absolutely dead wrong. It has come nowhere near making up for the significant reductions in the last few years, where in the case of Manitoba, we are now receiving $240 million less each and every year over these last few years as a result of the wrong priorities on the part of the federal government. That would certainly be an area that you would think we could at least get the support of members opposite on in terms of mounting that challenge to the federal government.
In fact, when you look at the M.P.s in Ottawa, it was certainly one of the NDP members of Parliament from Manitoba that spoke out very loudly, criticizing the federal government for those wrong priorities, for not supporting health care in their 1998 budget. I would like to think that that would be an area that we could get their support to pursue that whole issue with Ottawa.
Again, the member for Brandon East and I agree to disagree on the whole issue of what balanced budgets do for our economy. We believe very fundamentally balanced budgets do create jobs. I think our economy is certainly proof of that today, and again, I think his view that potentially running deficits and running up debt and increasing taxes creates jobs is absolutely dead wrong. The proof certainly exists in the provinces that have balanced their budgets the earliest, that are now running surpluses. Provinces like Alberta, Manitoba, Saskatchewan are all doing very well in terms of their economies, and I believe a major part of that is because of the balanced budgets.
Again, I could take a great deal of time and read through all of the economic indicators. I will not do that. I encourage the member for Brandon East to do that, because if he looks at most of the traditional economic indicators, he will see that Manitoba's economy performed very well in 1997, particularly in areas like job creation where our total employment provincial average for 1997 was 538,300, an all-time high in our province. Our overall job growth rate was 2.4 percent last year, third best in all of Canada. Our unemployment rate at 6.6 percent was again the best it has been in some 16 years, and when you look at private sector job growth, we were the second best in the country. When you look at the job growth in full-time jobs, we were the best in the country. So, again, that is one economic indicator, jobs, which I think we would agree is the most important, but when you look at most of the economic indicators like investment, private investment, manufacturing shipments, exports and so on, Manitoba fared very, very well in 1997, Mr. Chairman.
But rather than go on, I think the whole objective is to get on to some questions. So with those very brief comments, I am prepared to entertain any questions from members opposite.
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Mr. Chairperson: Does the Finance critic from the opposition party have an opening statement?
Mr. Leonard Evans (Brandon East): Yes, Mr. Chairman, we will get into questions and so on, and others, I know, on our side have questions, but this observation about surplus budgets creating jobs just boggles the mind. I ask the minister really seriously: go back and look at your figures, 1992-93.
In your budget you had a huge reduction in revenue, 8 percent cut in revenue from the previous year, and this is when you had the biggest deficit. It would have been three-quarters of a million, but you took $200 million out of the fund, out of the rainy day fund, and it became $566 million, but that is still the biggest in the province's history.
Never ever before had we had a deficit as big as your government had in 1992-93, so what are you suggesting then? Well, you should have had a balance in that year and then we would have had more jobs. This is what you are saying. If you had a balanced budget or a surplus budget, we will have more jobs. So why did you not have the surplus budget in that year and have more jobs?
The fact of the matter is, Mr. Chairperson, it is the reverse, and that is what I am saying. It is because we had a decline in employment, a decline in people paying taxes, income taxes and retail taxes, that the revenue of the Province of Manitoba declined over 8 percent. It is the economic situation--and I am being honest and fair about this--that had led to this huge deficit that you had. You had an economic downturn, and the economic downturn meant fewer jobs, fewer revenues for the province, and a big deficit. If your logic is correct, this government should have worked to put a surplus. They could have had a surplus. Just cut, cut, cut, and you would have got yourself a surplus, and then you are arguing, well, that would give you more jobs. Well, I am sorry, that logic does not hold any water, and the economic facts do not support that either.
Again, I do not want to belabour the point, but the minister said, well, look back in the 1980s and of the terrible deficits, the high deficits the previous NDP government had. I would like them to put it into perspective and see what was happening across Canada and in Ottawa, and you will see in the early '80s, in particular, we had a big recession and every province went into deficit financing. Every province had big deficits. Every province built up debt and furthermore, I might add, Mr. Chairman, that our deficits at that time were geared in such a way that we maximized jobs. We had the Manitoba Jobs Fund, and we were looking pretty good compared to the rest of the country in job creation because of the way we handled our particular spending at that time. So debt, please, has to be a relative thing.
Yes, I can agree if you have less debt, you have less interest to pay and more money to spend, if that is what you want to do, but the fact is that you surely have to relate the debt to your income. I mean, it makes no sense otherwise. If your income doubles and your debt stays the same, surely you are more capable of handling that debt with a doubled income. Debt has to be related to income. This is what we are doing when we say, well, let us look at the debt burden, the public debt costs, that is the interest on the debt, as a percentage of spending--or is it percentage of revenue?--and it is only about 9 percent in your 1998-99 budget, 9.2 percent. As I said, it is about the third lowest in the country. Surely, that is the more relevant way of looking at it than in absolute dollars.
Having said that, I am not suggesting that we do not want to see Manitoba's debt reduced, but we are talking about the rate of reduction when, at the same time, this government is cutting into the health care system, education and social services. I am not for a moment either saying that we are satisfied or happy with the federal cuts to health care. Not at all. This should not have happened. I would like to see pressure on the federal government to reverse this. But the point that I was making, Mr. Chairman, is that the facts show the equalization payments have been increasing and have, to some extent, lessened the impact of a reduction in the Canada Health and Social Transfer.
What I would like to ask the minister and go back, because he never answered the question. I will make this comment again and then ask the minister the question. Why did he take $60 million from the Fiscal Stabilization Fund and put it into own-source revenue to give himself a $23-million surplus, which he turns around and puts back into the fund? Why are we taking more money out? If you need the money, why take more out? Why not take $37 million?
That is my question to the minister. Why not take $37 million out and you would have a zero position? You would have a balanced budget. That would be balanced, zero, balanced instead of a surplus. It would not look good. I mean, the PR would not look as good, but the fact is, you took too much. You took $60 million out and then you put $23 million in. I think it defies good accounting, but it is good for political image to show a surplus of $23 million.
So that is my specific question. Why take 60 when you do not need 60, you only needed 37? If that is what your objective was, you wanted to enhance your revenues by taking more out of the fund, why do that? It seems to me when you do that, you certainly open yourself to the charge of manipulation.
Mr. Stefanson: Mr. Chairman, first of all, in terms of our treatment of the fund, it is consistent with how we have utilized the fund ever since we established it many years ago, and again, I think that was the prudent thing to do at the time, the establishment of the Fiscal Stabilization Fund. I have had a chance to be out in many different forums across our province, and certainly Manitobans support the concept of a savings account. I think they can identify with it in their own personal situations, in their business situations, whatever, and are very supportive of their government having some money in a savings account to deal with any issues that come along, whether it impacts on our revenue, impacts on our spending, or whatever it might be.
Last year, in 1997-98, Mr. Chairman, we made the decision to take some money out of the savings account to bridge some of the significant reductions in funding that we are facing from Ottawa. As I pointed out to the member last year, the impact on an annual basis was we were receiving approximately $240 million less in funding from Ottawa for the CHST, the Canada Health and Social Transfer. We made a decision in last year's budget to bridge some of that significant reduction by bringing across $100 million into our revenue, allowing us to provide the necessary resources in health, education and support to family.
In this particular budget, we did not need the same amount because we do recognize that you can use a savings account for a short period of time, but you cannot build in a savings account to your budget on an ongoing basis because obviously it would become depleted. It would not be there moving forward. So, in the 1998 budget, we are bringing across $60 million to bridge that significant reduction and to provide the resources for health, post-secondary education and support to families, and we show very clearly in our medium-term plan, moving forward, that we do not expect to have to draw money from the savings account to bridge those federal reductions anymore, moving forward.
At this period in time, we are not building in increases in funding moving forward for the CHST. It is certainly our hope, and we will continue to do everything we can to pressure the federal government to put more resources back into health care. That is something that has the support of every province right across Canada of all political stripes, and, again, I go back to my comments earlier that I would hope that that is an area that we can get the support of members opposite and agree that the federal government should be stepping up to their responsibility and redirecting, putting back in place some of the significant funding reductions that they have taken out of that important area.
On a national basis, it is almost $7 billion annually that has been taken out of health and post-secondary education, and in the case of Manitoba, it is now $240 million annually. So the draw was there to bridge some of those reductions to provide the kinds of services that we believe should be required and are needed here in Manitoba in health, post-secondary education and support to families.
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Mr. Leonard Evans: Mr. Chairman, the minister has just said, we took $60 million out of our savings account because we needed it. My question very simply and specifically is--and then he showed the $23-million surplus: Why did he not only take $37 million? Why take $60 million out of savings when you only need $37 million? I mean, you are a good accountant. You should not take more out of savings than you need. You took 60 when you only needed 37. Why?
Mr. Stefanson: Mr. Chairman, this is a budget, and I think the member for Brandon East knows what a budget is--he has been a part of government and been a part of the creation of budgets--and that they are a forecast of how you expect the year to unfold.
Under our legislation, you are allowed to take one draw from the Fiscal Stabilization account annually. So, obviously, by having a very modest surplus--$23 million against total spending of $5.5 billion, that is less than one-half of 1 percent of our total budget--it does provide that margin for any adjustments that might occur during the year. I mean, it is a forecast. It is a budget. It gives some flexibility to continue to meet the needs that are required during 1998-99. It is that simple.
Mr. Leonard Evans: Mr. Chairman, just for the record, will the minister acknowledge--it is in his document, but I would like him to verbally acknowledge and explain to us and admit that he has taken too much out of the rainy day fund for this purpose, so he has got his $23-million surplus. Will he now acknowledge that he is simply taking that $23 million and putting it back into the rainy day fund? That is what he is doing with it.
Mr. Stefanson: The member for Brandon East, I am not clear on his question. I am acknowledging that we are taking $60 million out of the Fiscal Stabilization Fund. We took $100 million in 1997-98. We are taking $60 million in this year to bridge the significant reductions in funding we are facing from Ottawa, that we have $240 million less in the important areas of health, post-secondary education support to families. We are drawing amounts from our savings account to allow us to maintain and enhance the spending in those areas.
As the member knows, in this budget we are budgeting approximately $100 million more. In the case of education, we are budgeting close to $50 million more, so by being able to draw on our savings accounts, we are able to not only sustain our commitment there but actually to enhance our commitment in those very important areas, which I would think would be something he supports based on previous comments he has made and his Leader has made.
Mr. Leonard Evans: Mr. Chairman, we are not talking about the overall pressures imposed by federal cuts and so on. I appreciate that, and I agree with him. We do not like those, but surely he has to realize he took $60 million out and then, with the same breath, he is putting $23 million back in. That is what I say "the music goes round and around, and it comes out here." This just boggles the mind.
Yes, it is a budget, so budgets are estimates. But why did you not estimate, say $37 million, and then you would have a nice balance to be zero? You took $23 million more than you needed to take. I mean, it would be different if something else was happening to that $23 million, but what is happening? Like any surplus, $23 million either goes to pay the debt, but in this case we take it and we put it into a fund instead of paying it against debt, because before this fund was established, Mr. Chairman, any surplus went to the debt automatically.
That is what Mr. Fred Jackson, the Provincial Auditor, was very upset about in 1988-89 when this government first took office. Before the legislation was passed--it was eventually passed--the budget was brought in, and there was this fund set up. Monies that could have and should have gone to debt repayment just automatically, $200 million were taken out of revenues and put into a fund and showed us with a deficit of nearly $160 million, I believe it is, that we should not have been having, and that is the beginning of the fudge fund.
But now I am saying, okay, so we have got the fudge fund, but I say it is really fudgy when you take on the one hand $60 million, because of all the arguments the minister has made about federal cuts and that, fine, but why $60 million when you only needed $37 million, because you end up with $23 million which you turn around and put back in. I mean, it is like going to the bank with your savings account. You take out $60 million and then at the same time, the same day, you put $23 million back in. It is very strange. I say what it does, of course, it makes the government look good because they can say, I have got a $23 million-surplus.
The point I am making is you cannot really judge the bottom line anymore because of the fudge fund. You cannot judge it anymore. You have to know what is going on in the fund. I say it is just incredible that we can take $60 million, show a surplus of $23 million and then turn around and have to put that $23 million back into the fund. In the old days, before the fund legislation was passed, before it was introduced, that would have gone automatically towards debt repayment, which gets back to the point we have made in the past, you do not need balanced budget legislation to pay down the debt. That can be done just automatically by any government at any time who has a desire to pay down debt. You ensure you have a surplus and that surplus goes automatically to debt reduction.
Mr. Stefanson: Well, maybe the simplest way to explain this to the member for Brandon East, picking up on his last comments about debt, is that through the combination of the revenue growth we have had and the ability over these last two years to use our savings account to bridge the federal funding reductions, $100 million last year, $60 million this year, we are not adding to the debt in Manitoba. I think I will take a minute and just outline to the member for Brandon East what has happened to debt.
At the end of 1980-81, the tax supported debt in Manitoba was $1.064 billion. I think that roughly coincides with when the member for Brandon East became a part of an NDP government here in Manitoba. At the end of 1987-88--
An Honourable Member: Twelve years earlier, '69.
Mr. Stefanson: You are one of the two old-timers then, but you were--[interjection] I stand to be corrected on the timing when the member for Brandon East arrived, but certainly the member for Brandon East was here during the period '81-88, and I think that is my point.
So in 1980-81, when the government changed roughly around that time frame, the debt was $1.064 billion. At the end of '87-88, again roughly when the government changed, the debt was $5.162 billion, almost quadrupled in that seven-year period, average annual increase of 25.6 percent. Each and ever year the debt was growing at 25.6 percent.
Then we will pick up from 1988-89, when the debt was the $5.162 billion, take it through to the end of 1998-99, where it is now at about $6.6 billion, just under $6.6 billion. The average annual increase over that period of time is 2.5 percent growth in debt during those about 10 budgets, compared to average annual growth of 25.6 percent.
You talk about things being mind-boggling, that is mind-boggling, in an era in the '80s when revenues were growing at double digits here in Manitoba, to have the debt going up at that kind of a rate. But what is even more important, I go to the member's very specific question, if you go back to 1995-96, the first balanced budget, since that point in time our debt has gone down. It has gone down from $6.8 billion in '95-96. It is down now to under $6.6 billion. Over that period of time, over those three or four budgets, the average change has been .7 of a percent decrease. So the debt is actually going down over these last few years for various reasons, one of them being the fact that we are now starting to pay down our debt here in Manitoba.
So I think the most simple example for this member to understand what deficits do, deficits add to your debt. Balanced budgets do not add to your debt. Balanced budgets give you the ability to actually pay down the debt. What we are doing here in Manitoba today is we are balancing our budget and, through the balanced budgets, we are able to generate surpluses. As a result, we are paying down the debt in Manitoba.
That is good news for all Manitobans. Even the Province of Saskatchewan applauds doing that in terms of the budget they just brought down. Even his own Leader acknowledged a few weeks ago that he would at least maintain the debt retirement schedule that we have in place in Manitoba, which is a major step forward to hear that kind of a comment made from his Leader, who was also a part of the same government in the '80s that quadrupled the debt and had average annual increases of 25.6 percent.
So maybe the simplest way to explain it to the member for Brandon East is we are no longer adding to the debt in Manitoba. The debt is going down. As a result, our debt servicing costs are going down; as a result, less interest is being paid. All of those things are good things for Manitoba, for our economy. I would think those are things that the member for Brandon East would applaud and support.
There might be other things in this budget that he might disagree with. I am sure there are, but I would think that that would be one area that he would be applauding and saying: yes, that is the right thing to do and that will give us more flexibility as we move forward.
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Mr. Leonard Evans: Mr. Chairman, I do not want to get into a debate about the history, but I would just make one comment, and that is, the deficit situation in Manitoba in the '80s was not out of line with what was happening right across the country to some extent because of recessions and what happened in Ottawa and also because of the rate of interest at that time being much higher than today. What is happening in Manitoba today seems to be in line with what is happening to the other provinces as well, but that is not what I want to debate.
The minister still has not answered the question. Why take $60 million out of savings when $37 million would do? It seems to be just irresponsible from an accounting point of view to take $60 million when you need $37 million, because that additional--what you end up with is, by taking 60 you have a bottom line of 23-plus, but that does not go to repay the debt if you just put it back into the fund. You are taking too much money out of the fund. The minister tells us about the history of finances but he does not answer that question.
Mr. Stefanson: Mr. Chairman, I have already answered that question in various ways. I indicated the fact that we took $100 million last year; we are taking $60 million this year to support programs, to support health, post-secondary education, support to families, that we are restricted by a one-time draw out of the Fiscal Stabilization Fund and that by leaving a surplus of $23 million--it is a budget; it is a forecast--that is about one-half of one percent of what our total budget is in terms of any flexibility to adjust with any events that come along throughout the year. So, again, it is the prudent thing to do.
The member is right, at the end of the year it will go into the Fiscal Stabilization account. We will look at that account again at the end of this year, provided we hit that target, if we hit the target of $23 million surplus; and we will look at that account again at the end of 1998-99 as to what balance should be in the account and how best to utilize that savings account on behalf of Manitobans. It is certainly something that is well understood by all of the economic analysts, by the bond-rating companies. It is certainly well understood by the public. It is well understood by anybody who has covered the budget. The only one who seems to have some difficulty with it is the member for Brandon East (Mr. Leonard Evans). I am certainly prepared to spend whatever time is required to help him develop a clearer and better understanding and appreciation for why this is important to be done and, as I say, the significance of the '98 budget.
Mr. Leonard Evans: I just have one other question. I have lots of questions, but I have colleagues who want to get into the debate and ask a few questions of this minister and maybe some other ministers.
Just on a different topic, I am very concerned that the exodus of people from Manitoba has taken a sharp turn upwards. We were, as the minister knows, having a lowering of that exodus for some years now, but that has been totally reversed in 1997 to the extent that we lost two and half times more people in the first nine months of '97 than we did in '96 and particularly the loss of nearly 800 people to the province of Saskatchewan. That is a net loss.
Would the minister care to comment on why this increase in net outward migration and particularly why such a sharp increase to the province of Saskatchewan? I would submit it is likely because, as usual, the relative economic situation must be better in Alberta, British Columbia and Saskatchewan. Not that there are not some jobs in Manitoba, but there must be better opportunities out there. Otherwise, why would people go?
I appreciate that people travel or move for retirement reasons and other reasons or that the military are moving people around, et cetera. I can appreciate that, but the volatile factor in all of this is employment seeking, and it seems to me that we have got people leaving Manitoba now in some significant amount, seeking opportunities that they seem not to be able to find here, particularly our sister province to the west, Saskatchewan, where, as I said, we have on a net basis lost 800 people almost for the first nine months of 1997.
I wondered if the minister could tell us why, in his judgment, we are losing people to Saskatchewan and Alberta and B.C.
Mr. Stefanson: Mr. Chairman, I think, as the member for Brandon East did point out, that we are just coming off seven straight years of decline in out-migration to other provinces here in Manitoba, a record that I think is unmatched in the history of our province. It actually compares to a period in the '80s where there were seven straight years of increases in out-migration. If you look at the nature of the out-migration from the provinces to the east of us, we are actually gaining population from five out of the six to the east and the other one is basically flat, so in terms of looking at eastern Canada we are attracting people from eastern Canada.
He does point out for one of the few times, I believe, we did lose a few people to Saskatchewan, but if you look at primarily what is happening, the people have gone to two provinces. Roughly half of them have gone to Alberta, which was a destination, in fact, for over half of those who left Manitoba, and even though our economy is performing very well in terms of job growth, third best in the country, 16,800 private sector jobs, there are obviously job opportunities in the province of Alberta as well, and we do have a very skilled workforce. I think that is another issue that we take pride in Manitoba, is the quality of skills that Manitobans possess. As a result, therefore, they can be fairly mobile and they will, in many cases, move to other job opportunities.
Having said that, there are significant job opportunities in Manitoba and we continue to have sectors that are still looking for people in a whole range of areas, from transportation to the apparel industry, to information technology. That is why we are dedicating more resources to initiatives like Making Welfare Work, more resources to the apprenticeship program, also assisting with post-secondary students and so on, doing a number of things to be a part of helping to ensure that Manitobans have the skills to meet the job opportunities that exist in our province.
So when you look at out-migration, Alberta and any other major amount goes into British Columbia, and I think we know why some Manitobans choose to go to British Columbia. Unfortunately their climate is a little warmer than ours in the winter, and a few people do choose to take their retirement there. But beyond that, I think to be attracting people now from Ontario, to have had seven straight years of decline, to have the kind of job growth we have got, the kind of private sector job growth, the kinds of forecasts that are being laid out for Manitoba by the economic forecasters, all very positive. There are lots of job opportunities and will continue to be, and that is something we should all be very proud of.
Mr. Tim Sale (Crescentwood): To the Minister of Finance (Mr. Stefanson), I wonder if I could ask the minister if he could look at his third quarter projection revenues. I am sure he has it here with him, and I would just like to ask him a couple of detailed questions about that.
First of all, I believe that his revenue projection, Mr. Chairperson, was $5.777 billion and that he is projecting in that total $175 million from flood recoveries from the federal government which would give an adjusted figure, net of that one-time revenue, of $5.602 billion. Has the minister basically got that now in front of him, the year-end projection statement?
I notice the minister has the figures now. Could he just confirm his third quarter estimate of $5.777 billion revenue, less the one-time flood recoveries, for an adjusted revenue figure of $5.602 billion, which is not in his statement, but it is simply the arithmetic of removing the $175 million one-time federal flood recovery from his overall revenue estimate? Could he confirm that initial figure, Mr. Chairperson?
Mr. Stefanson: I am certainly prepared to confirm--I am just looking at this information now. The total operating revenue forecast for March 31, 1998, is $5.777 billion and that those would include the estimate of recoveries from the federal government which according to the third quarter report are forecast to be $175 million.
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Mr. Sale: Mr. Chairperson, then to follow the arithmetic of that, I think that would leave--in the minister's understanding as well--an adjusted figure of $5.602 billion. We would then, in order to get a true picture of the underlying revenues net of the Fiscal Stabilization Fund, remove a further $100 million.
If the minister could confirm that that would bring his real revenues down to 5.502, according to his third quarter statement, removing the Fiscal Stabilization Fund and removing the one-time federal flood revenues.
Mr. Chairperson: Before the minister answers that, I just want to do a mike check. Mr. Minister, can you just tap on that mike for me? That one is live. Have you got it on right now? That is staying live. It is still live.
Mr. Stefanson: Mr. Chairman, I believe the member for Crescentwood has taken the $5.777 billion in projected revenue for '98, deducted the $175 million from recoveries from the federal government and is then deducting the $100 million, which is included as a result of the transfer from the Fiscal Stabilization Fund. So if that is what he is doing, he is correct with those amounts.
Mr. Sale: Mr. Chairperson, I thank the minister for confirming that. I believe then that that leaves the number that reflects the real underlying revenues of the province as $5.502 billion.
Now, I just direct the minister to his budget, to the revenue estimates and to the total revenue before extraordinary figure of $5.600 billion. I am sure the minister has his budget there and that he will be able to identify that figure--$5.600 billion total revenue before extraordinary.
I would ask the minister if he would then deduct from that, the Stabilization Fund, of $60 million which would leave $5.540 billion, very straightforward, and further, if he would deduct the growth in the federal transfers which is approximately $37 million, 37-38, depending on round; so in other words, to deduct from 5.600 the sum of $97 million or $98 million depending on the federal estimates, which would again give you an underlying revenue picture for year 1998-99, net of the Stabilization Fund, net of changes in federal revenue, and I think that the minister will then confirm that what he is projecting for this year in revenue growth is a figure of $5.503 billion or $5.502 billion, depending on whether the federal growth is 37 or 38, rounding. I would just ask the minister to confirm that that is the result of those calculations.
Mr. Chairperson: Could I ask the honourable members to remember that there is a live mike over here that is picking up everything you say.
Mr. Stefanson: Mr. Chairman, no, I cannot confirm that without sort of going back to the question and doing the calculation. I can speculate where the member is heading with this, and if he is heading to the issue of the accuracy of revenue, then certainly prepared to get into that and to share with him what the real numbers are in terms of growth in personal income tax, growth in corporate income tax, and so on, because, as he should know from his days in government, in terms of the current budget, a significant number of the numbers are provided by the federal government, reviewed with the federal government. In fact, between corporate income tax, personal income tax and, of course, the transfer payments, by the time you get those components added together, you are well up over 50 percent.
So I am certainly prepared to give him an idea of what we are budgeting in terms of growth in individual income tax, growth in corporate income tax. I think the simplistic calculation that he did--and I saw a calculation done as part of their alternative budget where they took the $5.5 billion and said if it grows by 3 to 5 percent, it is a certain amount of money.
That was dead wrong because, if you look at the transfers, and it is important to separate them, you have to look at the federal transfers, because the federal transfers, Government of Canada on a budget-to-budget basis, they are just under $1.6 billion but, compared to the forecast that the member for Crescentwood (Mr. Sale) is attempting to work from in terms of the transfers, there is actually a reduction of some $75 million.
So you have to immediately separate out the $1.6 million which is not growing. In fact, it is reducing. Then, you deal with what is left, you deal with our own-source revenues, which are about another 72 percent, and out of that 72 percent you then have to split them and start looking at the personal income tax that we go over with the federal government. We are showing growth in personal income tax of between 3 and 4 percent. We are showing growth in corporate income tax of between 15 and 20 percent, very solid growth. We are showing growth in retail sales tax of, depending if you are going forecast to budget or budget to budget, anywhere from 4 to 8 percent, all very strong reasonable growth, which again I think is in keeping with our economy's performing.
So I tell the member for Crescentwood, if that is where he is heading with his questions, the revenue forecasts are accurate. They are done in conjunction with the federal government. Those are the kinds of increases that are built in, and to do the simplistic calculation that he did or somebody on the part of his caucus did is absolutely dead wrong. You have to start breaking out the elements of revenue to do the actual comparisons and to do the accurate calculation. To do that simplistic kind of a calculation really is totally meaningless.
Mr. Sale: Finally the minister did realize where we were going, and that is good. I am glad he caught up. We are not dead wrong. We estimated last year and we told you last year when you brought down last year's budget that you were $200 million below revenue. In your third quarter statement you agreed that you had understated your revenues by $190 million. You are getting there. In fact, you are going to go well over that. So if you want to talk about who is accurate in revenue estimates, we would be glad to have that debate, because we have been right over the last few years, and the minister has consistently underestimated his revenues over and over and over again.
Mr. Chairperson, the minister talks about a simplistic calculation. The calculation that is being done is simply his numbers. He is telling us that he is going to get $5.6 billion in revenue, and he is going to have in that revenue $60 million from the Stabilization Fund and $37 million more from the federal government.
When you make any kind of correction for that and use his own numbers, no numbers calculated by anyone else, his numbers, third quarter estimate numbers, he is asking Manitobans to believe that we will have $1 million more in revenue from own-source revenue in the new budget versus the old budget. It is absolutely straightforward and absolutely transparent. There is no way on God's green earth that his revenues in the current year will be anything like $5.411 billion; they will be over $5.6 billion, well over. He himself has acknowledged $5.777, less the federal one-time transfer for flood relief, so it is over $5.6 billion already admitted, and he is trying to tell us that our ordinary revenue next year will have zero growth from what he is acknowledging will already be in place at the end of this year.
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This is a shameful budget because the draw on the Fiscal Stabilization Fund, which the minister and our Finance critic just had a long exchange about, will never take place. It will not take place this year, it did not take place last year, and it will not take place in the next year because the revenues are so understated that he will not need to do so unless, of course, he decides in his pre-election year to throw a whole bunch more money into Manitobans' services, which they badly need, in order to bribe them with their own money that should have been spent through this last period of time to ensure that the health care system stayed in place, that our education system stayed in place. So let us not talk about facile numbers because, with the numbers I have used, not one of them is calculated by this side, every one of them is from his data.
Mr. Chairperson, I want to ask the minister one other question of fact. He seems to have trouble with these, and I invite him to get his numbers out. There has been some discussion about the special levy numbers. Now, the Minister of Finance directs the Public Schools Finance Board to collect the education support levy for the province and the province funds public schools. With the underfunding, the removal of more than $90 million in purchasing power over the last seven or eight years, public schools have had not much choice if they wanted to keep any kind of service level in their schools but to raise the special levy.
This special levy has gone up because of this government, this minister's actions to underfund public education, and I would like the minister to confirm that during his government's time in office the special levy has risen by $134 million. That is from $208,000,528 in 1988 to $343,000,872 in 1996-97, and we will not know for a while what it will finally be in 1997-98. So to the end of the last year $134 million, and $134 million by his own figures, is more than six personal income tax points worth of taxation, at $20 million, $22 million, $23 million per point. So the effect of your policies, Mr. Chairperson, through you to the minister, has been to increase Manitobans' taxes by more than six personal income tax points just on the special levy.
If you go back to '92-93, when you cut your property tax credit and when you broadened the sales tax base, there was another six points equivalent of personal income tax. That is not our number; that is the minister's department, Federal-Provincial Relations, who gave him a memo--his predecessor, rather--gave his predecessor a memo to point out the equivalent impact of their sales tax broadening and the cut to the property tax credit. Between these two increases, mainly affecting property tax but also affecting the sales tax, just these two, not counting any of the fees, not counting any of the incredible charges for nursing homes, the transfer of $20 million in Pharmacare costs, you have raised Manitobans' taxes by the equivalent of 12 points of personal income tax.
The minister is so fond of talking about personal income tax points and the debt. Let him now talk about personal income tax and the increase in property tax levies, the increase due to his cut of $75 on the property tax credit, the increase due to the sales tax broadening, 12 personal income tax points. He has reduced personal income tax, he and his predecessor; by next year, it will be four points. You have raised them three times more than you have lowered them, Mr. Minister, and I do not see how you can go with a straight face to Manitobans and say you have not raised taxes. This budget contains that statement over and over again.
You, in fact, have raised taxes; you have tripled, in effect, what you have said you have reduced. You said you have gone four; in fact, you have gone up 12, and those taxes are an onerous burden, particularly on lower- and middle-income Manitobans, who are paying sales tax and property taxes at a level that is the equivalent of 12 personal income tax points. Will the minister confirm that?
Mr. Stefanson: No, Mr. Chairman, I will confirm no such thing. As usual, the member for Crescentwood asks a question, but he does not listen. I explained to him the components of revenue and the very simplistic approach that he took. I hope that the Leader of the Opposition is not relying on the member for Crescentwood to prepare their alternative budget because, if he is, they are in big trouble. To take a simplistic--to get down to a revenue number and take 3.5 percent, I think most members opposite can understand there are the different elements that make up the revenue. I have already explained very clearly what the impact of 1.6 of the revenue is. I have also outlined for them what we are showing in terms of growth and in terms of individual income tax, corporate income tax, and so on.
So, again, the member is dead wrong with his approach, with his simplistic calculation and for some reason is not prepared to go behind the numbers and see what the components are, see what makes them up and also to accept the fact that when it comes to these numbers, we also receive them from the federal government. We work with the federal government. They collect our personal income tax; they collect our corporate income tax. We work with them; they provide us the numbers of the estimates of what our revenue projections are.
On an overall basis, Mr. Chairman, I am very proud of our ability to forecast as a government. I am proud of our 10 budgets to date and our 11th budget in terms of the accuracy of them.
If you want to talk about discrepancies, what we have seen in Canada this year is most provincial governments--I have looked at Saskatchewan's budget, their revenue came in higher. Federal government, let us look at the federal government. They went from a $17-billion deficit to a surplus because the economy performed very well within most of Canada, and their revenue sources were up.
So, again, I encourage the member to do a little work on these issues and to take the time to understand them, and I think that would go a long way for him and hopefully for some of his colleagues. Again, I do not accept his numbers, and I think the member for Crescentwood himself probably said it best in May 1997 during the Estimates of Industry, Trade and Tourism, and I am quoting the member for Crescentwood. These are his own words on the record: Mr. Chairperson, I claim absolutely no knowledge in the area of statistics. I have a great deal of difficulty interpreting statistics without somebody on hand to help, so I am not suggesting I know what we ought to do.
Well, I say to the Leader of the Opposition, help him. He needs help; he needs it now. Please do that, the Leader of the Opposition, the member for Concordia (Mr. Doer), help the member for Crescentwood. When he starts putting statistics on the record, they have absolutely no credibility whatsoever.
If he wants to wade into the issue of talking about taxes, I can list off I do not know how many dozens, but they are in the dozens, they are in the dozens of increases of taxes from the period from 1982 to 1988 when the Leader of the Opposition was a member of that government for a couple of years. We do not need lessons on taxes from members opposite. They are the masters of tax increases. If there ever were a government in Canada that were the masters of tax increases, some of them still sit right over there.
I think it is worth reminding them of some of the tax increases that they introduced. They increased the retail sales tax from 5 percent to 7 percent; they introduced and increased the payroll tax to 2.25 percent; they introduced the personal net income tax; they increased the corporation income tax; they increased the corporation capital tax; they increased the gasoline tax; they increased the diesel fuel tax; they increased the railway fuel tax; they introduced a land transfer tax; they increased tobacco tax.
If there was a tax out there, they either introduced it or increased it, and that is the legacy and the record that they left. We have not done that. We have reduced personal income taxes on at least two occasions. We have reduced a number of other taxes. Go through our 11 budgets and you will see tax decreases in each and every one of those budgets.
That is our record compared to the record of the NDP administration from 1981 to '88. So we do not need any lessons from members opposite, particularly the member for Crescentwood, when I quote him directly and he struggles with statistics.
So I say to the Leader of the Opposition, give him that help right now; please do it.
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Mr. Chairperson: Order, please. Could I ask the honourable members that want to carry on this conversation to do so in the loge, so that we can get on with the questioning.
Mr. Sale: Mr. Chairperson, I thank you. I enjoy the minister's comments when he has trouble with two different concepts. Arithmetic I have a great deal of comfort with, and that is what we were doing. I hope that he does not have too much trouble with arithmetic, with percentages. I have some difficulty with Ki squares and some of those arcane statistical concepts. The minister may understand those; I do not, but I do understand arithmetic, and, by and large, I think we have done rather well in the area of arithmetic in terms of projections.
I just have one further question about the federal Estimates. Now, I take the minister's comment that the federal government provides revenue growth estimates--they do. I certainly agree with him that that is what they do, but they provide revenue growth estimates, and I ask the minister to answer this one fairly carefully because this is where the truth gets shaded too often.
They provide revenue growth estimates on a growth into the new year over the old year actual, not over the estimated. The minister knows that. He also knows that to the end of the third quarter federal income tax revenue was up 8.8 percent. The federal government estimates the year-end picture during the December-January period and provides provinces with an estimate of growth, not over their budget figures, which is how the minister fudges revenues, but over the actual--that is, real growth next year over what actually happened this year; not over what we thought might happen 12 or 14 months ago, but what actually happened.
So will the minister confirm that the federal projections for revenue growth, which do come from the federal government, I quite agree, are not based on last year's estimates, they are based on an estimate of actual and, therefore, the minister builds into his base, year after year after year, a fudge factor on revenues? A very convenient fudge factor and one that makes his revenues, as has happened this year, somewhere in the order of $200 million more than he estimated. Already by the end of the third quarter that is the picture.
So will the minister simply confirm that the federal estimates of growth are, indeed, arrived at by the federal government and provided all provinces, but they are based on the best guess at the year end of the actual revenue plus the growth they are estimating? For ease of an example, if you are going to get $1,000 in revenue at the end of 1997-98, March of this year, a few days from now, the federal estimates of growth are X percent on that number, not on your last year's budget. That is how you build the fudge factor in, is it not?
Mr. Stefanson: I do not accept most of what the member said when he talks about fudge factors. In terms of the numbers provided from the federal government, they do update the projections on a regular basis with provinces, and they do provide the most current estimate of what the shares of revenues will be for that current year and, in projecting, moving forward. So they are updated on a regular basis in terms of what we can expect from the federal government.
But I want to go back to his absolutely simplistic, incorrect calculation of just taking the gross revenue and multiplying it by 3 or 5 percent, because if he wants to compare forecasts, which is what he is getting at, our forecasts for 1978-98 to our 1998-99 budget, federal transfers are projected to be down by $75 million in '98-99 from the '97-98 forecast.
So right off the mark you have to do, as I have already told him, you have to take the transfers out because they are not growing by 3 to 5 percent. They are going down from the forecast amount in 1997-98. So, if he can understand that, he should be able to accept that. So then you get down to your own-source revenues, which what we have built in in terms of growth and own-source revenues after the tax reductions is a little over 3 percent. That is very reasonable. It is what is also being provided from the federal government. It compares well to what we have seen from other provinces.
So in terms of our own-source revenues, after factoring in the tax reductions that are in this budget that I believe in '98-99 totalled about $28 million, if I recall correctly in that range, they are taken out. The growth factor after that is a little over 3 percent in reasonable growth, reasonable growth in keeping with our economy with the jobs being created and so on.
Those are the facts. That is forecast to budget on our own-source. I have already given him the forecast to budget on the transfers, and if he understands those elements, then hopefully he has a better appreciation for the accuracy of our numbers, Mr. Chairman, because they are the best information, the best numbers that we have at this particular point in time based on our own analysis and based on the analysis and numbers provided by the federal government.
Ms. Marianne Cerilli (Radisson): Mr. Chairperson, I have a few questions for the Minister of Finance related to the Pan Am Games budget. We know that there is now a revised budget that is some $145 million, which is different from the $122-million budget that we discussed last spring in Estimates. I think that it is important that we get some clarification then how this is affecting the variety of departments that could be contributing to the Pan Am Games from the provincial government.
So I want to start off by just asking the minister if a revised budget plan has been prepared based on the new budget, and, if he can provide that to me, I would appreciate it. I am looking currently at page 46 of the old business plan which listed the cash flow from the province over the years from '96 to the games year in '99. What I am interested in getting is the changes in that cash flow over the years, and I am wondering if the minister has that and he could provide that to me as well as the entire revised business plan.
Mr. Stefanson: Mr. Chairman, unfortunately, I do not have all of the material on the Pan Am Games here, but the member is correct that there is now a revised budget which is approximately $145 million. I am certainly prepared to provide her with whatever information I can. There has been a revised budget submitted. That is the range. I think there has been maybe some slight adjustments to that, but that is the range of the budget now. It was $122 when we discussed it back in Estimates last May. It is now in the range of $145 million. As a result, both the federal government and our government have made an additional commitment to the Pan Am Games.
I am certainly prepared to provide her with a summary of our commitment, what we have provided to date, and what we are then planning to provide over the next couple of years. So if she is looking for the revised budget, I will provide her whatever information I can in terms of the revised budget. I will also provide her a status of what we have paid and what we are committed to pay over the next few years leading up to the games. I think those were the two elements that she asked for. I do not have them here with me, but I am certainly prepared to undertake to provide that information.
Ms. Cerilli: Well, the minister said he does not have much information with him on the Pan Am Games. One of the things when I looked at this budget, it is very unclear to see one line that will show in the budget the amount of dollars flowing this year to the Pan Am Games, and that is one of the things I am interested in getting from him. I have referred him to page 46 of the previous business plan which shows the government's cash flow for all levels of governments over the years from '96 to '99, and I think it is important that we know what those changes are.
The other question I wanted the government to provide an answer for today is all the other costs that are being incurred by other government departments, provincial government departments, whether it is from Urban Affairs and our contribution to the WDA agreement, for such things as the North Main task force changes, the changes at Portage and Main, the intersection, the revisions or renovations, I should say, to community clubs for change rooms, The Forks bridge. I understand that there is money coming from the Department of Culture, and my question to the minister: is all of this included in the provincial contribution which is now $37 million, or is what we are seeing is there are additional department expenditures that are going towards improvements related to the Pan Am Games and a variety of different other areas?
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Mr. Stefanson: Mr. Chairman, in terms of our direct support, as the member has touched on, is going to be approximately $38 million. Now, there are some initiatives that are currently underway that obviously the Pan Am Games will be a benefactor from, but there are some things that are being done anyway, whether it is some of the developments at The Forks or other location, but I can certainly undertake to obtain as much as I can in terms of initiatives that are underway that might have an impact or a benefit to the Pan Am Games. I am certainly prepared to see what information I can pull together in that area. If she has any very specific questions on individual departments, I am prepared to follow up on those.
Some of the areas she touched on, even though she rolled in the Winnipeg Development Agreement, some of the things happening on Portage Avenue and so on I think are primarily the City of Winnipeg, but if they are being funded under the Winnipeg Development Agreement, then obviously that is a tripartite agreement that we are a part of. So I think some of the issues that she touched on might well be undertakings that are just being done by the City of Winnipeg, but again if she has a very specific question I am prepared to follow up, and I am prepared to pursue where initiatives are underway that might also benefit the Pan Am Games.
I think of The Forks as maybe the best example because some things are being done at The Forks, and there is no doubt some of the things that are being done at The Forks will benefit the Pan Am Games. Festival Park that is being done at The Forks will benefit the Pan Am Games because that is going to be a location that they are going to obviously have various ceremonies, various activities and so on. So if that is the kind of additional information she is after, over and above our direct support, I am certainly prepared to undertake to obtain as much as I can.
Ms. Cerilli: Well, I am pleased to see the minister will provide me with that information, but I think that I just want to clarify that most Manitobans are aware that a lot of these projects are being undertaken as sort of, quote, beautification projects in preparation for the Pan Am Games. I think that it is important that we have a full accounting of all those additional expenses that are public expenses that are being done to prepare for the Pan Am Games. We keep hearing that they are on schedule or that their schedule is slated to be completed for the Pan Am Games so we could get into more specific questions about things like the North Main task force report where I understand there are going to be a number of vacant lots when they tear down these hotels, and what is going to be happening there. But all of that is being done on a schedule to prepare for the Pan Am Games.
The minister may say that they would all have been done anyway, and I think that some people would disagree with that, but there are a number of these projects that are definitely part of the Pan Am Games plan and schedule. I guess the main point that I wanted to make, and he has agreed to provide me with the information, is to have a full list of all these additional costs from public funds and which departments that those funds are coming from. I do not know if he wants to respond further to that or if I should just carry on.
Mr. Stefanson: Very simply, as I indicated, I am prepared to look at that from within areas that are under our direct control as a provincial government. I think some of the initiatives that are referred to are being undertaken by other levels of government. We can certainly inquire of them, but it is their expenditures, their accountability.
We can certainly inquire what kinds of initiatives they are undertaking as well, as related to the Pan Am Games, whether it is the City of Winnipeg or the federal government, but it is certainly easier to do for areas that are directly under our control or where we are a contributing partner to it. That is the only point I was making.
Ms. Cerilli: There was an article in the paper today that talked about a new project that is going to be related to the Pan Am Games. It is called Crop Art 99. It is another example of how an organization is going to be out soliciting sponsorships so that the fields around the Winnipeg area, when tourists are flying in, are going to have representations of paintings sculpted into the landscape.
I am surprised to see this in some ways, because it seems that then they are going after, in some cases, what is $400 an acre of costs for this project. I am aware that there are some fairly major areas of the Pan Am Games themselves that do not yet have the private sponsorship necessary. I want to list them, and maybe the minister can tell me if sponsorships have been secured for these major items: the timing for all the events that require very high-tech timing, an airline, food, liquor, waste management, film and processing of film, fuel for vehicles, hardware and furniture.
Mr. Stefanson: Obviously I do not have those details here at this stage, but I am more than prepared to undertake to get a status report on sponsorship overall for the Pan Am Games and obviously the specific elements that the member just outlined.
Ms. Cerilli: I should have asked with part of that question for maybe a little bit more detail in terms of the plans being in place for those areas. Some of them, like the timing, airlines, very significant, substantive sponsorships that we are still waiting for. If I compare the bid and the new revised budget, if the minister can tell us if the private sector contribution and the sponsorship has changed for the Pan Am Games and if we are now seeing that one of the reasons we are having to have more public funds invested into the Pan Am Games is because, in fact, the sponsorships are not coming in as quickly and to the same level of funding and support as initially was proposed in the bid.
Mr. Stefanson: I can confirm, in terms of my recollection of the revised budget, it was driven by the two elements. There were some increases in expenditures, but there were also some revisions, downward revisions in terms of estimates of revenue sources derived from sponsorships and other elements, i.e., from outside of government. So the change to the budget was driven by both increased expenses and less revenue coming from nongovernment sources, but in terms of further details I am certainly again prepared to undertake to provide as much as I can in that area.
Ms. Cerilli: It is my hope that the revised budget or business plan that the minister is going to provide me with is more clear in this area in terms of the amount of revenue coming from sponsorships in the private sector, because the previous one is not very clear.
I refer the minister to page 42 of the business plan, which does not have a specific line for private sector as it does for government revenue. There is marketing, investment, income tickets and travel recoveries. I think that the business plan should clearly show the amount that is going to be coming from sponsorship and from the private sector.
The last area that I want to ask about is in terms of the plans for venue, construction and renovation. There is a number that are still in limbo, I guess, you could say. There is a number of changes that are occurring, a number of changes that have made some communities not very happy. This is another area that is part of the legacy of the games, that communities tie their hopes to. I want to ask the minister if he will agree to provide me with an updated list of the venues, the costs for their renovation or construction, and detail beyond just what is again in the business plan which has had to be revised.
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I want to ask him specifically about one of the venues which is of great concern--that is the soccer venue--and if there has been a decision made as yet on whether the leading teams from countries where soccer is their pride and joy, if they are going to be expected to be playing at the Waverley Complex; and if it is indeed the case that it is going to be moved from the Winnipeg Arena, the specific details for renovating that venue; if that is the case, the Waverley Soccer Complex, in terms of the capacity for parking, for seating, the access in terms of the streets in that area. There is a lot of problems that could be related to that that could have large impacts in terms of marketing and televising of this specific sport which is going to probably be one of the most interest to a lot of the countries that are going to be coming here, particularly from Latin America.
I would like the minister to answer sort of the broader question of the venues and then specifically in terms of the soccer venue.
Mr. Stefanson: Again, Mr. Chairman, I will undertake to get a status report and provide as much information as I can to the member for Radisson. My understanding is most of the venues are now being finalized, but she is correct that there are still a few that remain to be finalized and it is important that that be done very shortly for obvious reasons in terms of the timing of the games. We are going to have to undertake to obtain and provide as much information on the whole issue of venues, both the status of those that have been firmed up to date and the status of venue of any outstanding sites.
Ms. Cerilli: One more area I want to ask the Minister of Finance about before we have the Leader of the Opposition ask questions is to do with the revenue statement of the government. It has to do with page 8 of the revenue statement which lists that CMHC has only just over $700,000 in revenue going to the Department of Housing. When we reconcile this with looking at the actual amount that comes, it is more like $35-$36 million. I am unclear as to why the revenue statement does not actually show the total amount of revenue that comes from CMHC for housing in the province of Manitoba.
I also want to have the minister provide me with information that would explain the huge difference in the spending in that department. There is a huge discrepancy between what is estimated and what is actually being spent, I would say going back to around when we got the balanced budget act in the province. Two years ago, there was over $65 million spent, and the budget for this year is only $43 million. That is a 34 percent difference. I have contacted Manitoba Housing Authority about this, and I am waiting for information, but I think that shows there is a huge problem in the budgeting for this department.
When I look at the third-quarter report for this department, they have already spent $32 million, almost $33 million, which would leave only $10 million more for the rest of this year, so again this year we are going to see a huge overspending in the department. I am wondering if there is any relationship between the budget Estimates which are underbudget and this not showing the revenue from CMHC.
Mr. Stefanson: Mr. Chairman, in terms of the cost and fee recovery from Canada Mortgage and Housing that the member refers to on page 8 of the Revenue Estimates, I see that there is a slight adjustment from $764,00 to $707,000. I will certainly undertake to get the details. I am assuming that just has to do with recoveries in terms of the various administrative costs. But I think, more importantly, if you look at the Estimates of Housing on page 85 of our detailed Estimates--and certainly the Minister of Housing (Mr. Reimer) will get into these in more detail as we head into a Committee of Supply in the next several days--it does reflect the province's share of rental subsidies for Manitoba Housing and Renewal Corporation-administered units, for CMHC-administered units and other components.
In terms of the slight reduction in the total Housing budget, it is made up of a number of adjustments in various areas that the Minister of Housing will go through, but, again, none that are any program changes that affect the programs that are in place in terms of the programs offered to Manitobans. So I think, as they get into detailed Estimates, I am sure the Minister of Housing will provide further details.
I guess just, if I understood the question, CMHC's support for these initiatives go directly to the corporation, and our funding is on a net basis in terms of what is provided by the province. You have to basically look at the financial statements, and you will see the total funding from both the provincial and the federal government. So what we see in our Estimates is the provincial share on a net basis for the elements of Housing that I have already referred to in terms of MHRC units and CMHC units.
Mr. Gary Doer (Leader of the Opposition): I want to raise a few issues surrounding New Directions and the proposal to relocate a group home from 171 Cheriton to Springfield Road and now, as I understand it, to 574 Chelsea Avenue.
Now, I raise my comments as somebody that was on the board of directors of Main Street Project group home, and worked with John Rogers, Clay Lewis and others in the establishment of group homes for kids as an alternative to what was a horrible situation in their family or alternatively an impossible situation in an institution, so I recognize, as all members of this Legislature, that group homes are part of the continuum of treatment and care. I recognize also that any new location of a group home creates considerable work on behalf of the sponsoring agency, which is primarily funded by the provincial government, the Department of Family Services, and the new community to which the home is going to be located.
I have to say that the standards of partnership to develop mutual respect I have observed in previous locations of group homes--the Hugh John Macdonald Hostel, when they located a group home in a community, there was a lot of concern, a lot of public concern, but the group home and the sponsors of the group home were willing and able to attend grassroots community meetings to deal with the concerns that residents of the community had and, to some degree, start to deal with some of the issues of safety as the community feels it. I respect that. I know it is not easy. I know when people like Ulysses Desrochers go out to community meetings that these are tough events, and when they go door to door after those meetings or before meetings, that is a tough exercise because everyone is concerned about safety, and the whole issue of locations and relocations of homes is not an easy matter.
I have to say in this case, Mr. Chairman, I feel that the standard under which I would expect a group home working with a community to be prepared to take those meetings, a meeting with the community to deal with the concerns that they have, have not been followed. They have not been followed to such a degree that I believe the home now and its relocation will put the jeopardy of the young people and the acceptability to the community at risk.
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I believe by trying to short-circuit the issues that residents have raised and to deny that those concerns are there or that they are legitimate that we have, in fact, practised as a community a location standard or methodology that has hundreds of names on petitions and I, as an MLA, feel that the community has absolutely been shortchanged by the agency in terms of dealing with their concerns.
I note specifically the letter that the minister wrote back to me saying I was invited to deal with the director of the agency. That is not true. I was apprised of the development after the agency had bought the home, because it is our information that the home was purchased in November. What I cannot understand and I will not understand is why the New Directions program met with just a small group of people prior to the purchase of this home and has refused to attend a community meeting that was established on January 15, a community meeting that the minister was invited to, the local councillors were invited to, I was invited to, the member for Elmwood (Mr. Maloway) was invited to.
Now, you have to understand that this group home is not a new group home or new treatment centre. It is being relocated from a community north of it and it was proposed to be relocated to a Springfield Avenue location. Regrettably, or whatever the reason was, the home did not proceed on that location. So the people in the one area feel that "community activity and political activity" developed a strong local opposition to the home which resulted in a new methodology being used in attempting to locate the home on Chelsea Avenue. They feel that politics has been played in this case, and I regret that they feel that. They feel, and lawyers were citing examples of the MLA being involved in meeting with community members in terms of his constituency, which is a difficult task that we all have.
Normally I have seen group homes located all across the city and it has not been raised in this Legislature but because it has been developed and group homes have been located on the basis of merit for the residents and on the basis of safety for the community. I agree that it has been difficult and it is difficult for the minister but, nonetheless, I do not think there is any shortcut for people that are sponsoring group homes attending public meetings and answering questions of the residents that reside on the street. Failure to do so, in my view, is arrogant. It is bad treatment and, in my view, in the long run, it puts the kids that are being transferred in a very, very difficult situation. Some people in the community are going out and opposition, as the member for Elmwood (Mr. Maloway) would know, is growing and growing and growing. They feel that the sponsoring agency does not care about what they feel, what they worry about. They do not care about the elderly lady that is 87 years old or 84 years old living next door to that residence, and they have shown that they did not care by not attending the meeting.
I wrote the minister, and I was extremely disappointed. I was looking forward to a fairly feisty meeting on January 15, and I have been to them before, and I am sure the minister has been to them before, and I accept that as part of my responsibility. I accept as a citizen and as an MLA that I have responsibilities both to the residents I represent and to the greater community in trying to make a difference. I was absolutely offended when the executive director of the home wrote a letter to the residents saying: New Directions does not believe it would be productive to attend a community meeting, another community meeting--and I should point out that at the first community meeting, very few people attended because they did not know about it; it was one day after the home was purchased--to rediscuss our decision to relocate a treatment centre, 574 Chelsea Avenue. Through our various meetings with community groups and organizations, through door-to-door conversations, we have listened and responded fully to all concerns; therefore, we are sending your regrets to our invitation.
The group wrote the executive director--and before that they stated that they did not get an agenda or format for the community meetings. The group sent back an agenda. It was fairly straightforward, MLAs, city councillors and New Directions. So we had an auditorium full of people without the sponsoring agency being there. I can understand the minister was invited. I am not sure whether any of her staff attended that meeting, but it is a situation that has gone I think from bad to worse in terms of the residents. Since that meeting, by their lack of attendance, all the fears that were there in the community to begin with have become certainly more extreme. The signatures are being signed. There will be up to a thousand signatures shortly, which means almost unanimous opposition in the area to a treatment centre being relocated from the East Kildonan area to the Elmwood area of the community.
Now, I think this is very regrettable and, as I say, I know the member for Osborne (Ms. McGifford) went through difficult situations with the Hugh John Macdonald Hostel group home, but you know the group home was there, the group home sponsors were there when there were 600 people. I dare say that some of the concerns that were there were dealt with at that meeting, and eventually some of the concerns were dealt with after that. Hopefully, over time there can be a strong community partnership between the people and the residents of a treatment centre.
So I would say to the minister that there should be a standard in the Department of Family Services on dealing with work and partnership from a sponsoring agency to a community. It starts, in my view, with honesty, it starts with mutual respect, and it starts from an opportunity to discuss these issues in full public forum rather than a kind of managed and small forum kind of setting.
Now, I met other members that were allegedly part of the support of this agency from the church, and they came up to me after the meeting and they were offended, people that members here in this House would know, individuals who they would know, who have got a long track record of tolerance and fairness. They were absolutely shocked that this letter was sent and that this community was absolutely ignored.
So I would like to say to the minister, I believe that she should stop them from relocating the home until the work is done in the community. I believe it is absolutely essential that if there is a strong relationship in the existing community, that is the most important treatment component there is. If the physical features of one home are something less than the physical features of another home, that is one matter, but the absolute trust and respect and mutual partnership that a home develops over time in a community versus going to one location and then having you go to another location, and failure to deal with those new locations, or with a partnership, I think sets up those kids in a very, very unfair way.
So I raise this to the minister; we have been trading letters back and forth. I know the minister gets hundreds of letters in a week, and I know the minister gets hundreds of letters that are on her desk to sign in a week, but I would point out to her that I am very, very, extremely angry with the way in which this agency has dealt with these people. These are good people. These are honest people. I know that the program's, the New Directions program's goals are laudable, and I support the attempt to have our people, people that come from families that cannot get the kind of support that we would see as essential in their own homes, that they get the proper emotional, physical, and community support, but I suggest to the minister that you do not get it if you do not start working on it to begin with.
As I say, when I have gone through the tale of two group homes, I have listened to the member from Osborne (Ms. McGifford), and a person whom I really respect, Mr. Desrochers, deal with a home in a very controversial area, but he went into the community. He went into that session. He took the questions from 600 people. He took that anger and talked about what the proposal was going to be and why it was necessary. He did not say I am not going to attend the meeting.
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I want to ask the minister a question then. I just believe fundamentally in my bones that the agency was wrong not to attend the meeting in January; I believe the date was January--I had better make sure of my dates--January 15. I do not think sending a fax to people is as good as coming to the meeting yourself. Does the minister support this particular area in light of the fact that there already had been community opposition at Springfield Road, major community opposition?
It was alleged that the Minister of Justice was involved in some of those community meetings. I know he is in a difficult situation. I am not pretending these things are easy, but given the fact that this was proposed to go from one location to another location, to another location, is it appropriate that the agency, the sponsoring agency, not attend those meetings, and not do their job to develop respect and information to the people and residents directly?
Hon. Bonnie Mitchelson (Minister of Family Services): Mr. Chairperson, I certainly appreciate the comments that my honourable friend has put on the record, because I think from time to time all of us in our communities and constituencies have had issues surrounding, whether it is group home activity or foster homes that are there for very high needs, high risk, especially adolescents, teenagers.
I know for a fact that I had the issue not on the group home basis, but with the foster home in my constituency. Very difficult as the MLA for the community and the Minister of Family Services in my position, as the minister should not become politically involved on any one side, and I do not believe that any elected official should take sides in circumstances, whether it is inciting anger and fear among community or taking an opposite position. I think we all understand and realize that there are those children within our society that are going to need support, and that are going to need the kind of treatment that is provided through high-level needs foster homes or group homes. I know that we have had very many successful placements right throughout our communities, and that this situation is an extremely unfortunate situation.
All I can say is the information that I have--and I have not become politically involved, and I make a point: I do not think you would find a Minister of Family Services, regardless of political stripe, back many, many years who has taken an active position one way or the other. I have responsibility for ensuring that children are protected under my mandate and that the services are provided in the best manner possible to give children the best opportunity for some support and, certainly, hopefully, some resolve of the issues that they are facing.
I have to say that none of us like the prospect of having to deal with people that, for whatever reason, maybe not understanding completely the issues surrounding the opening of a group home or a foster home, become fearful, and rightly so, and have unanswered questions. But it is my understanding from discussions with my officials who have talked to New Directions that indeed there was a community meeting back in December, I think it was. I am not sure of the exact date. I guess it was shortly after the home was bought, and there was activity that had New Directions going door to door in the community and talking to several organizations in the community.
Now I am hearing my honourable friend say something a little different from what I had heard the process had been and that there was a community meeting that did take place and, subsequent to that, I suppose the community organization that held the meeting on January 15 held a preliminary meeting before that without inviting anyone from my department or anyone from New Directions to plan a strategy on how to oppose the home. Now, I mean, maybe my information is wrong, but that is my understanding of what happened, and this was a meeting subsequent to that that was held on January 15.
I think it is extremely unfortunate that we have come to this point where it seems that whether it is lack of information or the ability to convince the community that this is the right place for the right reasons for this group home. I would like to indicate that also it is my understanding that New Directions has a community advisory committee that they are working with on implementing or putting in place the home. Now, I do not know who is involved in that, what members of the community are involved, but I would like to say that I do not think this is an issue that we can leave alone.
I would like to offer the services of my office to facilitate a small meeting, and not at this point in time to see what might happen over the next short period of time, maybe with our honourable friend, with New Directions and with a few representative members of the community, possibly someone from the advisory committee that I understand is working with New Directions and somebody that has been involved in community activity in opposition to the group home, and I think that maybe we could start right there. I am not prepared to become politically involved in directing anything to happen.
I guess my main concern is the safety and security of the children that need to be treated within our community. We better make sure as we are moving ahead in the process that we are not putting those children in jeopardy as the result of any location anywhere.
So I know that there is an awful lot of work that needs to be done in preparation. I have seen many successful instances. I know for a fact the Knowles Centre has established group homes in all of our communities in East Kildonan, North Kildonan, and Transcona, and they have been very successful ventures.
I am prepared and willing to work with my honourable friend, hopefully understanding and knowing that we need to find a solution for the kids that are involved, but we also want to have a solution that is a fair process for the community, so I think we need to try to move quickly to get a resolve, and let us facilitate and work together to ensure that we are doing the right things for the right reasons with community endorsement.
Mr. Doer: I have a number of other questions, but I do think that there is no shortcut to the major community meeting. I do not believe, and I can say to the minister, and this is why the people are really upset, the information I have is the house was purchased in November, and a day later there was a community meeting and only 40 people showed up. Then the big meeting that took place--and there has been big meetings before on group homes; it is just a starting point in my view--that is when the agency did not attend on January 15, so this is what the real--
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Mr. Chairperson: Order, please. The hour being 5 p.m., time for private members' hour. Call in the Speaker.
Mr. Marcel Laurendeau (Chairperson): Madam Speaker, the Committee of Supply has been considering a certain resolution and directs me to report progress and asks leave to sit again.
I move, seconded by the honourable member for Portage la Prairie (Mr. Faurschou), that the report of the committee be received.
Motion agreed to.