Province	  Législature	SessionType de discours		Date du discours Locuteur	        Fonction du locuteur  Parti politique
Nouveau-Brunswick 47e 		3e Discours sur le Budget	20 mars 1973	 M. Jean-Maurice Simard Ministre des Finances PC

Mr. Speaker, once again it is my privilege to present to this House the annual motion of supply, to 
review the various economic events which have affected the economy of New Brunswick over the 
past year, and to inform this assembly the government's financial plans for the next fiscal year. At 
the outset, I wish to express my congratulations to you, Mr. Speaker, for your appointment to this 
prestigious and exacting job. I know you will carry the appointment with the authority and 
competency which have characterized your contribution to the debates in this House during your 
years of sitting as a member.

Mr. Speaker, the budget I will present has its roots in the financial objectivity adopted and 
consistently supported by this government since its election. The budget continues to emphasize the 
goals of economic growth, financial stability and responsibility. The control of expenditures within 
the framework fixed existing Sources of revenues is one of the main priorities of the present 
budget. At the same time, the government intends to emphasize the importance economic growth in 
the province and encourage the creation of new jobs. After a review of the international and 
national economic situation with such an important determinant of the level of economic activity in 
New Brunswick, I will explain how our fiscal policy, intergovernmental relations and our main 
expenditure programs contribute to these objectives.

Review of Fiscal 1972-73

Economic Situation

A few days ago, Mr. Speaker, I tabled the annual review of the New Brunswick economy. This 
review described the economic events, both international and national, which affected the New 
Brunswick economy in 1972. In addition, it included a sector analysis of the behaviour of our 
province economy during that period. I will thus restrict my remarks to a few highlights. The 
purpose of the government in monitoring the provincial economy is to assess past trends and to 
provide for an optimal economic structure based on the province's medium and long-term 
comparative advantage, leading to a high level of economic activity. The provincial government 
needs outside cooperation in the performance of its economic tasks. External markets, private 
sector decisions, and the influence of other governments, the federal government in particular, are 
important elements of provincial wealth and growth. These must be assessed and given their due 
weight in the government's decisions. The evolution of the provincial economy affects the 
government's financial means to adapt to new or different needs. On the other hand, the 
government influences the economic environment. Provincial government expenditures are 
equivalent to more than one-quarter of New Brunswick's gross Provincial Product. They constitute 
a very important component in our provincial economic activity. Significant changes in the level 
and direction of expenditures of this government, therefore, have considerable effect, directly and 
indirectly, on the economic structure and the income levels in the province. It is in this light that the 
evolution of the economic situation and outlook in the province must be considered.

In 1972 the level of activity in the province increased steadily; based in large part on international 
and national factors. For most major industrial powers, 1972 was a year of accelerating economic 
growth. The recovery from the economic slowdown of 1970 began earlier, and proceeded at a 
quicker pace in North America than in Western European countries. Last year the Canadian 
economy completed its second year of recovery since the 1970 slowdown. Despite the pause 
indicated by preliminary third-quarter statistics, the real growth in Canada's Gross National Product 
for the year will have approached the 5.5 per cent rate which was also attained in 1971. Including 
the effect of inflation, this growth rate was 10.6 percent. The upswing of the New Brunswick 
economy in. 1972 reflected the strength of the Canadian and American economies in 1972. 
Accelerating growth in markets external to the province provided the basis for advances in the 
province's resource-based industries. Other sources of strength during the year were continuing 
high levels of consumer spending, housing activity and government spending during the past year. 
New Brunswick's Gross Provincial Product is estimated to have reached $2.1 billion in 1972. This 
represents a year-over-year advance of about 9.7 per cent-a rate moderately lower than at the 
national level, but greater than the long-term compound rate of 6.6 per cent. Considering increases 
in the value of output due to inflation, it is estimated that the real growth in G.P.P. during the year 
was five per cent.

Indicative of the continuing expansion in economic activity in the province during 1972 was a 
substantial increase in income. Personal income and personal disposable income are estimated to 
have increased by a record 12 per cent, more than double historical rates. Rising incomes and rapid 
population growth, combined with higher consumer spending, resulted in sharp advances in 
consumer outlays throughout the year. The value of retail trade is estimated to have advanced by 11 
per cent during the year, to a value of $926 million.

As in 1971 the manufacturing sector played a key role in the advance of the provincial economy. 
The gross value of manufacturing shipments is estimated to have climbed by 11.4 per cent during 
the year to a record $858 million. A particularly important source of strength was the marked 
improvement in the secondary forestry sector. Pulp and paper production is estimated to have 
increased by 20 per cent during the year. The construction industry, one of our largest employers, 
experienced a good year in 1972. The value of construction work performed during the year-$391 
million-was more than II per cent higher than in 1971. Residential housing starts were particularly 
encouraging, reaching a record 6,358, an increase per cent over the 1971 total. The importance of 
export markets to New Brunswick was again Exports of New Brunswick goods and services 
usually comprise about one of Gross Provincial Product. The recovery in major export markets 
during resulted in a 16 per cent increase in exports for the first three-quarters this year.

Mr. Speaker, this bright general picture of the New Brunswick economy marred, as it was for the 
entire country, by the behaviour of some economic indicators, particularly unemployment rates and 
price levels. The increase in persons of working age in the province's population, cost with a sharp 
increase in labour force participation rates, resulted in a record percent increase in the New 
Brunswick labour force, from 215,000 in 1971 to 226,000 in 1972.

The number of employed persons in the province in 1972 increased: 9,000 to 207,000. This 4.5 per 
cent growth rate was the highest of any province except Ontario. That New Brunswick's 4.5 per 
cent growth in the number of person employed was second in Canada only to Ontario is significant. 
It indicates on a comparative basis our job-producing activities achieved positive results 
Nevertheless, this achievement is no ground for complacency for, despite significant increase in 
new jobs, the unemployment rate in New Brunswick estimated to have increased last year from 7.4 
per cent to 8.4 per cent.

The persistence of high unemployment rates within the buoyant province economy can be ascribed 
in part to the large increase in the participation of residents in the New Brunswick labour force. 
More people chose to be actively involved in seeking work than in previous years. Those new enter 
who could not find work entered the ranks of the unemployed. More attempts must be paid by the 
federal government to regional pockets of unemployment our unemployment is to be reduced to 
more acceptable levels. As in the rest of Canada, rising prices accompanied the increase in over 
spending: the Saint John Consumer Price Index, the only one available for New Brunswick from 
Statistics Canada, increased by 4.5 per cent during the year. This, however, was less than the 
national increase of five per cent.

Mr. Speaker, the general economic outlook for 1973 appears good provincial economy is expected 
to continue to expand. If the Canadian American economies advance as strongly as anticipated, the 
Gross Provincial Product could increase by as much as 11 per cent during the year. This forecast 
includes the likelihood of continued improvement in the secondary for industries as their facilities 
move towards full capacity production and as provincial policies regarding the forest industries are 
implemented. This, in turn would contribute to further increases in manufacturing shipments, 
person incomes and retail sales levels during the year. Improved conditions in primary industries 
are expected to persist throughout the year. This should be strengthened by the advantage provide 
from the recent devaluation of the U. S. dollar. Since the Canadian dollar maintained its relative 
value in relation to the U. S. dollar, the effect of the U.S devaluation should be to make Canadian 
goods less expensive and, therefore more competitive in overseas markets. In summary, Mr. 
Speaker, present economic conditions and outlook suggest a continuation of the current expansion 
during 1973.

Intergovernmental Affairs

I mentioned earlier, Mr. Speaker, that New Brunswick's economy and development are affected not 
only by activities of the provincial government, but also by policies and programs of the federal 
government and of other provinces in Canada: These influences have been and will continue to be 
of great significance to New Brunswick. It is vitally important that we keep abreast of 
developments the country to ensure that New Brunswick's interests are protected and national 
policies enhance provincial priorities and objectives. I will deal first with federal-provincial 
relations and interprovincial relations outside the region.

There have been three main developments in intergovernmental relations in during the past year. 
The first is the increased importance the federal government is placing on consultations with the 
provinces, covering a wide range government activities and programs. This has been reflected in 
the number and frequency of federal-provincial settings-both planned and already held-and in the 
establishment within federal departments of provincial liaison groups-groups which have not 
before. Within the next few months, three important federal-provincial conferences be held: one 
dealing with post-secondary education, health and financial one dealing with income security, and 
one composed of First Ministers each of these conferences, federal-provincial financial 
arrangements will be an element of significant concern to the people of New Brunswick. Post-
secondary education continues to be financed jointly with the federal government under the terms 
of an agreement due to expire at the end of March 1974. Negotiations are about to begin between 
the federal government and the provinces to find a new formula for sharing the costs of post-
secondary education. In the health field, there is concern by both levels of government at the rate of 
cost escalation. The present cost-sharing arrangements are now under review and some federal 
proposals have been placed before the provinces. The main new formula proposed by the federal 
government has, as a basic criterion, a growth ceiling closely related ~o the long-term growth rate 
in the economy. Combined with the new formula, there is provision for auxiliary funds-thrust to 
give provinces the financial capability necessary to introduce changes' in the health delivery 
systems, thus enabling a reduction in the present cost escalation. These funds are the key. to the 
proposal, since they include a provision vital to New Brunswick for catching up in terms of the 
level of services in the health and hospital fields. New Brunswick will seek equitable financial 
arrangements with Ottawa for these programs. New financial agreements must permit us to 
continue to upgrade our services and to move them closer to national standards. At the same time 
our lower fiscal capacity compared with some other provinces must be taken into consideration. In 
addition, as a result of the measures contained in the recent federal budget, it will be necessary to 
hold discussions with the federal government to determine how the new procedure of income 
indexing will affect provincial income tax revenues. The present income tax system involves the 
application of the provincial rate of tax to the federal tax base many change in federal policy on 
income taxation can have a direct impact on provincial revenues and thus on the people of our 
province. Provincial tax policy should not necessarily follow that of the federal government. In the 
present case, it is the decision of this government that the tax advantages granted by the federal 
government should be passed on in full to taxpayers in the province. However, this should not be 
done at the expense of provincial revenues. Therefore, the protection of provincial revenue levels 
and the preservation of the ability of the province to choose its own options in the important tax 
field will be pursued in technical discussions with my counterpart in Ottawa who has already 
agreed to the concept. Another major area of federal-provincial relations important to the economic 
life of this province concerns the various joint regional development programs, such as the 
Northeast New Brunswick agreement, the Saint John and Moncton special areas agreements, and 
the special highway assistance program. These agreements will continue to receive our attention in 
order that New Brunswick derive the maximum benefit from them, both from immense financial 
inputs and from the longer-term benefits which they are designed to provide. Discussions will 
continue on methods of improving the contribution of federal government, especially its 
Departments of Transport and Registered Economic Expansion, to the growth of the province. We 
believe that DREE has contributed valuable help in many areas of province and, as the Premier has 
stated on several occasions, we have no add to the destructive criticism levelled against this concept 
and the federal department that endeavours to implement it. We do believe, however, that the 
province could benefit from change some of DREE's techniques, and feel that in some cases 
provincial priorities been neglected. It is our intention to continue to work with DREE constructive 
manner to improve its effectiveness and New Brunswick's benefit. The increase in cooperation and 
contacts between provincial and federal governments underscores the mounting significance of the 
provincial role, national matters. In the past year New Brunswick has played a consistent 
constructive role in federal-provincial discussions. We intend to continue to demand better 
programs and policies, especially in fields related to region development. Another significant trend 
in federal-provincial relations over the last months has been the increasing emphasis which many of 
the larger provinces placing on the need for basic changes in federal-provincial finance 
arrangements. These proposals revolve around the transfer of tax points, provincial governments to 
allow them greater flexibility in raising and spending their own revenue. These proposals have been 
a feature of almost all major federal-provincial conferences during the past year and have tended to 
overshadow the special programs and purposes for which the meetings were originally convened. 
New Brunswick intends to move carefully in this field. We are not sure transfers of tax points 
would be an effective or suitable replacement for many the shared-cost programs and for the 
existing equalization arrangements.

Recognize that for larger provinces with greater resources this kind of transfer might serve a 
beneficial end. However, much larger transfers of federal revenue resources to provincial control 
might undermine the ability the federal government to redistribute wealth and spread national 
program standards throughout the country. It has been the contention of New Brunswick, and 
indeed of most provinces, that one of the main concerns of federal government should be a more 
equitable redistribution of income opportunity between the various regions of the country. This is 
partly as recognition of the unequal distribution of national resources in Canada, and it also a result 
of the fact that New Brunswick and other lower-income provincial constitute a sizable market for 
the products of central Canada. In my view, a major role of the federal government is to reduce 
region disparities. To accomplish this objective, there is a need for a more equitable equalization 
payment system and for federal government help to create national standard of services. In the field 
of equalization payments, we have met with a fair amount success. It is significant 'that in the 
recent federal budget additional amount were added to the equalization payments. School revenues 
were included for the first time in the formula. This step, welcome but long overdue, has been 
urging on many occasions by New Brunswick and other provinces. I should stress that these 
payments are not unexpected windfalls, as the opposition may have intimidated. Rather, they are 
the result of pressure by the provinces for a better formula, and are indicative of the reasonably 
good relations with the federal government which have developed over the past several years. I 
should at mention, Mr. Speaker that we have argued already for another increment to equalization 
payments, based on the inclusion of all municipal revenues. Only when all revenue sources are 
included will the formula do what it is designed for-to compensate for the lower yield potential of 
some provinces' revenue sources, whether the tax is collected at the provincial or municipal level. 
This government, Mr. Speaker, will continue to support this proposal on every possible occasion.

Another important factor in intergovernmental affairs has been the desire of all provinces to meet 
and collectively establish their position on matters of common concern. Perhaps the most 
significant items in this area have been the Welfare Ministers' meetings and the joint conferences of 
the provincial Ministers of Finance and Education convened to develop a common provincial 
position on federal financing of post-secondary education. New Brunswick has taken part in these 
discussions and is interested in their outcome. We recognize, however, the difficulties to be 
encountered in trying to develop a common position on complex problems, given the differences in 
economic and social factors among provinces. We are concerned also that there will be no 
unnecessary delays in the adoption by the provinces and the federal government of required 
changes in such areas as welfare and post-secondary education financing. We will, therefore, 
continue to press for an early start to effective federal-provincial negotiations on these as well as 
other programs.

Within the Maritime region, cooperation among provinces has increased substantially in the past 
year. The main vehicle for this cooperation is the Council of Maritime Premiers which has made 
substantial progress in a number of areas in the first 22 months of existence. In the estimates you 
will note increased allocations for programs of the Council of Premiers, an increase which 
primarily reflects a transfer of funds from provincial programs to the newly established agencies for 
land surveying and mapping, higher education and resource management services. An element of 
the council's work which is of mounting importance lies in joint development of regional policies 
and proposals to be used in negotiations with the federal government or at national conferences and 
meetings. This cooperation was particularly evident at the recently held provincial-municipal-
federal meeting in Toronto, when the three provinces submitted a joint position paper. Through the 
council the three provinces also pressed the federal government for an early start in negotiations on 
postsecondary education financing. In addition, the council is in the final stages of approving a 
joint proposal on transportation policy to be placed before the federal Ministry of Transport.

These have been important achievements. Similar work will be started in the vitally important area 
of federal-provincial fiscal arrangements in the hope that the region can develop effective and 
acceptable policies which will enhance our own prospects and those of Canada. These impressive 
accomplishments in the field of federal-provincial and interprovincial negotiations and discussions 
have been achieved by this government, a Conservative government. The opposition had tried to 
have the people of New Brunswick believe that only they could carry on successful negotiations 
with the federal government. The events of the last year have proven that this is not the case. Our 
success in obtaining a better equalization formula points to the soundness of the government's 
position in having pushed for that change throughout the last two years.

Financial Review 1972-73

Mr. Speaker, the revised estimates for the year ending March 31, 1973 is contained in the Main 
Estimates which I tabled earlier this afternoon.

The revised total expenditures for fiscal year 1973 will amount to $591 million, compared to a 
budget estimate of $588 million. This means that total expenditures combining both ordinary and 
capital accounts increased by less $2.5 million over the budget estimates presented a year ago. Mr. 
Speaker, this increase of less than one-half of one per cent 18 indicative of the government's ability 
to manage its financial affairs in an efficient and responsive manner.

In the ordinary account, revised expenditures for fiscal year 1973 were $5 million compared to a 
budget estimate of $499 million, a difference of only per cent. Revised revenues will amount to 
$530 million compared to a buy estimate of $510 million. The opposition will notice, I am sure, 
that recent estimates of our surplus on ordinary account for 1973 will now total $21 million, $10 
million more than our budget estimates. On the capital account, expenditures of $82 million were 
$7 million 10 more than anticipated. Since recoveries were also slightly lower than forecast in 
budget estimate, the government's deficit on capital account increased by about $2 million. On the 
revenue side, the ordinary account showed an increase of about 5$ million over the 1973 budget 
estimates, $4.5 million of which was due to increase in the equalization grant paid by the federal 
government, but the most important single item was a $6-million increase in the yield of 
personalize taxes, due mostly to the rising level of activity in the economy and the result large 
increases in personal income. This last factor also influenced the rev from consumer taxes, 
especially from the social services and education which exceeded the forecast by $4.2 million. 
Capital account recoveries were lower than originally forecast by about million, due mainly to the 
shortfall on the special highways agreement, on which I will elaborate later and a $2 million 
shortfall on capital account recoveries the northeast development project. The overall result, Mr. 
Speaker, is that when the ordinary and cap accounts are combined they will show a net reduction of 
$8.5 million in forecast overall deficit.

Mr. Speaker, this is no mean result, and it once again contrasts greatly the kind of performance that 
we used to see when these accounts were responsibility of some of the members opposite. I would 
also like to commend this performance and the performance in 1971-72 with the dire predictions 
the opposition at the time of the presentation of these budgets and during study of the special 
warrants. In both years the fears expressed by opposition have been demonstrated to be unfounded. 
In both years, the government has reduced the overall deficit below the amount that had be 
estimated in each budget.

Capital Financing

Capital financing during fiscal year 1972-73 was of the same order and magnitude as had been 
forecast, and borrowing conditions for the program continued to be favourable Long-term bond 
markets in North America were comparatively stable in 1972, after two years of sharp interest rate 
and price fluctuations. In Canada provincial bond yield average at the end of January 1973 was 
relative unchanged from the previous year. Borrowing by the total provincial sector however, was 
considerably higher than in 1971. A substantial amount of financing was completed in foreign 
markets, which helped to relieve the pressure on the Canadian market. During fiscal year 1972-73, 
New Brunswick successfully placed two pub bond issues. In Maya $35-million issue was 
completed in the United States market, and in October an 80-million Deutschmark issue, equivalent 
to about 24,500,000 Canadian dollars, was completed in the European market. Both issues were 
made at attractive interest rates and met with an excellent reception reflecting the continued 
confidence of international investors in the financing outlook for New Brunswick. In addition to 
these two public issues, $28,787,000 of 20-year bonds we sold to the Canada Pension Plan 
Investment Fund at an average interest rate of 7.36 per cent. The province also expects to issue a 
long-term bond to the Government of Canada within the next few weeks for approximately $5 
million, at an interest rate of about 6.5 per cent. This represents the amount of loan funds borrowed 
by the government of New Brunswick under the employment loans program of 1971 which began 
in November 1971.

In addition, one bond issue of $20 million, completed in October in the Canadian market by the 
New Brunswick Electric Power Commission, was guaranteed by the province during the current 
fiscal year go further issue of the N.B.E.P.C. amounting to $45 million, dated April 1, 1973 has 
also been guaranteed by the province. This will permit the Power Commission to obtain the 
necessary financing to continue its large investment programs. In the short-term area, price and 
interest rate fluctuations were pronounced during the first half of the year. The so called Winnipeg 
Agreement limiting bank deposit rates removed some of this pressure and created more stable 
conditions in this market in the second half of the year. Full advantage was taken of the possibilities 
for profitable investment of surplus funds in Canadian and international money markets in the short 
term sector. The final results for the fiscal year will show a substantial net profit in our short-term 
financing operations.

Looking ahead, the general consensus appears to be that short-term interest rates will experience a 
sharp increase, with long-term rates undergoing a more gradual climb during the balance of 1973. 
Before leaving the subject of capital financing, however, I would like to emphasize that the credit 
rating of the province is exceptionally good. Whatever the members of the opposition may think, 
outside investors believe that this government has implemented policies that lead to stability and 
confidence. For instance, the spread between the borrowing rates of Ontario and those of New 
Brunswick has decreased over the past two years. This indicates the higher degree of confidence of 
the investment community in New Brunswick bonds and the increasing awareness outside the 
province of the better management of the present government. I shall now turn to a consideration of 
the government's plans for the new fiscal year.

Plans for 1973-74

Budget Policy

Mr. Speaker, considerable changes have been accomplished in the past year in the financial 
approach of this government. The functions of government in this area have been consolidated and 
changes have been made to render a more efficient process of decision-making. To improve the 
development of budgetary policy and also the control of its realization during the course of the 
year, the policy function has been separated from the control function so that each may be given the 
attention it deserves. This change was announced in last year's budget speech and took place during 
the 1972-73 fiscal year. It should lead to better controlling of the level and type of economic 
activity in the province and better advice as to the proper role of the government in the economy 
including, in particular, the total of expenditures and the maximum amount and type of revenues to 
cover these expenditures.

To reflect this expanded policy role you will find that new plans for 1973-74 include the formation 
of a taxation and policy branch in the Department of Finance. This branch will be responsible for 
the refinement and development of new fiscal policies in the government. One of the first areas of 
concern of the group will be to re-evaluate the various sources of financing available to the 
government. This study may very well lead to a readjustment of tax sources and an eventual 
lessening of the fiscal burden on families and individuals most in need. In addition, a study is now 
under way on a property tax credit system which will, hopefully, permit the government to adopt 
equitable solutions to problems in this field. The newly constituted Department of the Treasury 
Board has, among its duties, responsibility for the allocation of funds to present and propose' 
programs of the government, and for the efficiency of administration of the programs. The Treasury 
Board, will in short, see that funds are well an efficiently used and that maximum value is achieved 
from their expenditure help accomplish this role, the board has established a new management 
service branch to assist in the development of systems and procedures conducive good 
management. During the past year the Personnel Policy Division of the Treasury Board has been 
strengthened. Our results in collective bargaining, personnel systems a employee-employer 
relations have borne out the appropriateness of doing so would like to add, however, that the 
government will not take full credit for our improved relationship with unions. Union members and 
their leaders must be congratulated for their cooperation, which is so necessary to the health of t 
provincial economy. These groups have given their support to government efforts, and it is to be 
hoped that this spirit will continue to prevail. In the area of employee benefits a new group life 
insurance program h been introduced and offers to approximately 10,000 public servants best 
coverage than had been available in the past. Also, the government has decided to accelerate the 
cost-of-living adjustment for the Teachers' Pension Plan and the Public Service Superannuation 
Plan that the upward adjustment is fully completed this year rather than waiting un' next year. An 
additional $260,000 has been provided for this purpose. 

Expenditures

I would like to turn now to a brief review of the estimated expenditures f. the next fiscal year. For 
the fiscal year 1973-74, ordinary expenditures expected to increase to $577.9 million-an increase of 
about $68 million 13-1/2 per cent over the revised estimates for fiscal year 1972-73. Revenues 
expected to increase to $603.6 million-an increase of about $76 million or l4~ per cent. The surplus 
on ordinary account for fiscal year 1973-74 is projected increase again and reaches $28.4 million. 
Capital expenditures have been planned to increase by more than $1 million over the revised 1972-
73 estimates and they are expected to exceed $1 million. Notwithstanding this increase, it is 
forecast that the overall deficits decline for the second year in a row. The detailed pattern of 
expenditures reflects government priorities. As the Hon. members will remember, since the present 
government assumed office, has been working towards a more equitable system for dealing with t 
municipalities in the province. The recommendations of the task force to be implemented include 
the phasing out of tax concessions, a complex restructuring of the unconditional grants system, and 
encouragement municipal amalgamations to improve the effectiveness of local governments. It : 
with this in mind that we have budgeted an additional $9.6 million for municipal affairs to reflect 
not only the normal rise in operating grants to municipalities but also an allowance for the 
implementation of a number of recommendation proposed by the Task Force on Municipal 
Structure and Financing.

Mr. Speaker, the estimates of the Department of Youth reflect the decision on the part of the 
government to provide additional assistance to post-second student grant programs. Our estimates 
are more than double the budget amount last year and $400 thousand over our revised current year 
figures. Funds have been provided in the estimates of the Department of Nature Resources for the 
Forest Resources Study to be completed during the year Policies arising from the study will have a 
major impact upon spending programs of future years but will not require major expenditures this 
year. The Department of Health has shown significant increases in laboratory and, health services 
this year. These changes reflect our desire to provide better and more complete services to the 
people of New Brunswick. Medicare payments are estimated to increase by $2 million and will also 
provide for additional services.

A new alcoholism program will begin this year and $694,000 has been provided for this very 
important and long neglected area of our health delivery system. In the capital account, there is a 
significant increase in the allocation to the Department of Economic Growth. This reflects 
continued interest on the part of this government in this area and includes provision for, in 
particular, industrial parks in the special areas of Saint John-$2.7 million-and Moncton-$1.8 
million. The budget of the Community Improvement Corporation is increased substantially to 
reflect its greater capacity to undertake and implement investment projects in north-eastern New 
Brunswick. This will also reflect the amended FRED agreement (Fund for Rural Economic 
Development) which, as hon. members will recall, has been negotiated for a further period of five 
years beginning in the 1972-73 fiscal year. Expenditures under the terms of the new agreement will 
total $90 million, of which $60 million will be provided by the federal government, and $30 million 
by the provincial government. This new agreement turns a more comprehensive battery of 
programs towards the very severe social and economic problems of the northeast. Programs not 
specifically under the terms of this agreement are still to be a part of the total effort by the 
appropriate agencies. The economic problems of this area are a priority of the revised agreement 
with emphasis on the creation of jobs. Social adjustment programs concerning education and 
mobility are designed as a key support to the economic development effort. This government 
recognizes the need and aspiration of all its citizens to participate fully in the growth and 
development of our economy. We are ready to contribute and cooperate to solve this type of 
regional problem.

Mr. Speaker, the capital budget allocation to the Department of Health will double during the 1973-
74 fiscal year, reflecting our desire to catch up on hospital construction programs which had been 
sorely neglected by the previous administration. Major projects and allotments include $6.9 million 
for Moncton and $6 million for Fredericton. Planning is continuing on the regional complex for 
Saint John and $600,000 has been budgeted for this purpose. For transportation, an additional $4 
million will be spent on arterial highways under the Special Areas Agreement. However, under the 
Special Highways Agreement our government is concerned about the federal government policy 
which only allows for one-year agreements in this field. The province depends heavily on these 
funds for new highway construction. The uncertainty involved in waiting for approval of the one-
year commitment makes the scheduling of the construction program difficult and increases costs. 
This also tends to add to the instability of construction employment in the province. The federal 
government is being urged to give the province greater lead time and, if possible, at least a two-
year commitment. The provincial government intends to use to the fullest extent possible the 
federal employment loans program. The total allocation of federal employment loan funds for the 
province is $13.8 million for the three-year period ending in 1975. The province has received 
approvals on provincial projects totalling $6.2 million and has submitted additional projects on 
behalf of municipalities. It is anticipated that the province will benefit from loan forgiveness of 
$2.8 million as a result of the labour content of these projects.

The performance of the federal government in proposing this program in the early winter is out of 
line with my strong recommendation to Finance Minister John Turner in July of last year. At that 
time I said that the impact on winter unemployment would be much reduced unless an early fall 
announcement was made. Not only was the program announced late, but the first federal project 
approvals were not received until February 26, 1973, only three weeks ago. The provincial projects 
will create some 3,800 man-months of employment, but much of the impact in the key months of 
January to March has been lost. The rise in capital spending programs should result in a better 
economic infrastructure and, consequently, in the growth of revenue-producing activities.

It is clear, Mr. Speaker, that the capital estimates reflect the expansionary nature of this budget and 
emphasize our government's efforts to stimulate the economy and create additional employment 
opportunities for the people of New Brunswick. I would now like to mention the section in the 
estimates dealing with loan and advances, which total $28.5 million. These estimates include 
provision for $9.7 million for the New Brunswick Transportation Authority primarily for' 
development of Saint John Deep, including land acquisition costs. '.Some of the funds may also be 
used for the eventual development of an airport in the Leonard region. The New Brunswick 
Development Corporation will receive $6 million to continue its aggressive programs of attracting 
secondary industry the province. Loans available to fishermen through the Fishermen's Loan both 
have been increased to $4.8 million, in recognition of the increasing demands this industry to 
expand and modernize its operations. The New Brunswick Housing Corporation will receive $3.1 
million to allies for increases in assisted home ownership programs and to permit the province 
share in new proposed schemes under the National Housing Act. In addition, the activities of the 
New Brunswick Electric Power Commission will give a strong thrust to capital expenditures in the 
province. The N.B.E.P. is entering into a large capital program which should stimulate overall 
economy growth in the province over the next five years. It should further be noted these large 
electric power investments have produced economies of scale will permit New Brunswick to offer 
power at reasonable cost to industries locating New Brunswick and which will help to ensure 
stability in power costs for long-term future. Overall, the government expects an even smaller 
deficit than last year. Without any tax increases, the government will provide better services, 
increase capital investment and will borrow at a level lower than last year. The results should be a 
healthier economy and a healthier government sector.

Revenues

The buoyant provincial revenues mentioned in the previous section from the increased level of 
economic activity that is forecast for the current fiscal year. Provincial personal income tax revenue 
is expected to grow rapid during 1973-74. The corporate income tax revenue has a projected 
growth of 7.8 per cent. The range of consumption tax is expected to increase its view because of 
growth in the economy and consumer optimism. These growth rates range from 11.3 per cent for 
the sales tax, to 6.3 per cent for the tobacco gasoline and motor vehicle group. Without any increase 
in tax rates, the yields of property taxes are expect to be high as property values increase and the 
level of construction expansion. Reassessment of properties, to maintain equity, is expected to 
reach properties on a three-year cycle. Part of these high yields in property taxes due to record 
growth in residential housing in the province in 1971 and 1972.

The government has decided to effect one important change in government revenue policy during 
the coming fiscal year. The government will about succession duties and gift taxes as of December 
31, 1973. The government reached its decision on succession duties and gift taxes after considering 
particular the tax policies in other provinces. Prince Edward Island has already decided to vacate 
the field, and the province of Nova Scotia has announced will get out in March 1974. The province 
of Quebec has also announced in intention to phase out its occupation of this tax field. Further 
consideration was the impact of these policies on New Brunswick property owners and the revenue 
requirements for the coming fiscal year. As part of this decision, the government will as of 
midnight tonight suspend the operation of these Acts they apply to farmers and fishermen. This is 
done to remove possible difficulties met by members of these two groups in the transfer of property 
and to permit the continuous trouble-free use of these properties.


Conclusion

Mr. Speaker, I have provided a summary of our economic objectives as expressed in the 
expenditure plans for fiscal year 1973-74. I have stated my basic principle that the budget of this 
government for the next fiscal year must be one which increases the amount and quality of services 
provided by the government to the people of New Brunswick, but without increasing taxes. The 
government will continue its efforts to encourage high levels of economic activity and to create 
jobs through capital expenditures and investments in economic growth.

Mr. Speaker, I emphasize that our policy is one of expansion, and I emphasize that our policy is to 
hold the line on taxes. We will expand, but this does not mean a policy of extravagant spending and 
waste. On the contrary, it is the duty of this government, and a duty this government has accepted 
and successfully carried through, to control its programs and expenditures so that the people of 
New Brunswick get the most for their money.