Province Législature Session Type de discours Date du discours Locuteur Fonctiom du locuteur Parti politique Nouveau-Brunswick 49e 4e Discours sur le Budget 4 mai 1982 M. Fernand G. Dubé Ministre des Finances PC Mr Speaker, I am honoured to present to this House the traditional Motion of Supply and the Budget Speech. Today marks the fifth occasion on which I have had this privilege. I would also like to mention that it is the fifth time that I have been privileged to wear new shoes from the Hartt shoe factory here in Fredericton. Labour faces decisions on how much to demand for wage settlements in the face of an uncertain labour market and high inflation. Business faces difficult investment and production decisions in the face of uncertain markets and high interest costs. Governments have to cope with many of these same problems, but have a broader responsibility in addition. Governments have an obligation to provide some support to the economy and to foster an economic environment conducive to investment and job creation. It is our judgment, Mr. Speaker, that in this year of critical decision making, governments must be a source of stability and reassurance. We must be frugal but responsible, and allocate scarce public funds to projects that will put idle resources to work, create jobs and spur investment by the private sector. This judgment is made on the basis of the economic fundamentals of Canada's circumstances. The complex interaction of inflation, interest rates, the value of our dollar and unemployment often obscures other important factors at work. A general economic slowdown among our trading partners and disruptions to the world economy due to higher energy prices are two important and inter-related causes of our current situation. The energy price explosion is now abating and the prospects are good for an economic recovery among our trading partners. For these reasons I am convinced that clear rent economic problems are transient and that prospects are improving for a return to stronger economic growth. Mr. Speaker, whi1e this government is prepared to do its share to enSl1re our economic prospects and to maintain an adeql1ate level of services, I am concerned that the federal government is not. It has reduced its contributions for health and post-secondary education and has engaged the provinces in an intergovernmental struggle for political credit and spending power that is highly counterproductive in current times. In preparing this budget and planning for the next several years, I have taken the view nonetheless that the Government of Canada can be persuaded to adopt a more constructive and positive attitude concerning federal-provincial fiscal relations Before outlining the budget plan for 1982-83, I would first like to review the 1981-82 fiscal year. Mr. Speaker, as hon. members are aware, I have released quarterly progress reports on the 1981-82 budget as the year progressed. New Brunswick is the only Atlantic Province to provide the public with such information on its budget. Since final information on the outcome of the 1981-82 fiscal year wi11 not be available until June, most of my comments on last year's budget plan are based on the third quarter report. Since hon. members will have had the opportunity to read the third quarter report released on February 23, 1982, I shall be brief in my review. Mr. Speaker, during 1981 the economy performed for the most part as I had expected. The current estimate of growth for last year is 9.5%, inc1uding inflation and 0.5% in real terms without inflation. Despite the fact that real output was about the same as I predicted in my budget speech last April, there were some unexpected improvements. Personal income is now estimated to have increased by 12.4% instead of by 10.9%; mineral production was also substantially higher, while employment growth rose by 1.9%, rather than the 1.6% which I predicted. Such accomplishments at a time when much of the industrial world was in recession are indeed encouraging. Concerning the budget plan, total revenues as of the third quarter are $32 million higher than budget estimates. Expenditures are projected to exceed budget estimates by $35.1 million, largely due to increased spending in health and social services, losses associated with aid to industry and higher than expected wage settlements. The net result of these changes is a projected deficit on Ordinary Account of $13.2 million, instead of the budgeted deficit of $10.1 million. I think that hon. members must agree that this is a highly satisfactory outcome in what has proven to be a very difficult year. Capital expenditures, estimated at $202.9 million, are clown from the budget estimate mainly because of lower than expected expenditures by the Community Improvement Corporation under the General Development Agreement. Capital recoveries are down by $9.2 million from budget, largely for the same reason, yielding a projected net capital expenditure figure of $183.1 million. As a result of these changes in Ordinary and Capital Accounts, the overall budgetary deficit is projected to be $196.3 mill ion instead of the budgeted $192.4 million. The increase in the net debt is expected to be $150.5 million. With net loans and advances of $35.2 million and sinking fund payments and serial redemptions of $38.8 million, total financial requirements are estimated to be up by $10 million to $270.3 million. Mr. Speaker, I should now like to deal with the financing program of the province and the New Brunswick Electric Power Commission. During the 1981-82 fiscal year, the province issued debentures for a total amount of $300.6 million: $50 million of debentures were sold on the Canadian market at an interest rate of 13~% for a term of five years maturing on April 8, 1986; $75 mi11ion of debentures were sold to the Alberta Heritage Savings Trust Fund at an interest rate of l7t% for a term of six years maturing on September 30, 1987, and $75.6 million of 20-year debentures were issued to the Canada Pension Plan at an average interest rate of l5%. The remaining $100 million was obtained by issuing debentures on the public market in United States dollars at an interest rate of 14~% for a term of la years maturing on July I, 1991. The New Brunswick Electric Power Commission issued debentures amounting to $235 mill ion in United States dollars. The terms of these borrowings were as follows: $100 million at 15% due May 1, 1991; $60 million at 17% due October I, 1988 and $75 million at 16% due March I, 1989. Mr. Speaker, 1 shall now review the year's events in federal provincial fiscal relations. As honourable members are aware, parts of the Federal-Provincial Fiscal Arrangements and Established Programs Financing Act expired on March 31, 1982. Parliament recently passed amendments to this legislation which will affect the pattern of federal-provincial fiscal relations for the five year period, beginning April, 1982. I intend to table a full report on the lengthy and complex discussions leading to this amendment later in the session. Today I shall provide honourable members with a summary of these negotiations futile the Fiscal Arrangements Act is an Act of the Parliament of Canada, historically the federal government has sought provincial concurrence, if not full agreement, before placing amendments to this legislation before Parliament. In this round of negotiations the process was quite different despite provincial requests to begin serious discussions as early as the summer of 1980, the federal government did not put forward a single proposal for renewed fiscal arrangements until its budget of November 12, 1981. This left almost no time for real negotiations, especially in view of the fact that Canada's initial proposals represented a marked and substantial change in federal-provincial fiscal relations. Following the federal budget in November, the provinces carefully reviewed the federal proposals for Established Programs Financing (EPF) and equalization, and found numerous problems as well as some serious technical errors. Several provinces, including New Brunswick, presented their own counter proposals. There were many technical meetings between federal and provincial officials, four federal-provincial meetings of finance ministers and a meeting of first ministers at which the federal proposals for EPF and equalization were discussed. I would first like to describe the outcome of the discussions concerning federal transfers for medicare, hospital services and post secondary education, where the federal government chose to adopt uni1aterally its budget proposal despite strong criticisms from all provinces. As a result, Mr. Speaker, New Brunswick will receive approximately $160 million less from Canada over the next five years for medicare, hospital services and post-secondary education than it would have received under the old formula. For the ten provinces the reduction in federal funding will amount to about $5.7 billion over the 1982-87 period. The government of New Brunswick is far from satisfied with the new formula for Established Programs Financing, which results in a significant loss in federal revenue available for medicare, hospital service and post-secondary education. This is a shift in federal priorities away from key social programs, a move which I think the Canadian people wi11 reject. In addition to all of the provinces, several independent agencies disagreed with the course of action proposed by the federal government. The Parliamentary Task Force on Federal-Provincial Fiscal Arrangements, the Economic Council of Canada and the Hall Commission all recommended that provinces needed more federal transfers in the 1980's and not less as indicated by the reduced EPF payments. I should point out that the new EPF formula is assured only for 1982-83. 13y the end of this period, the Government of Canada wants to negotiate new arrangements for postsecondary education and separate conditional arrangements for medicare and hospital services. The federal government has stated that if agreement cannot be reached, federal transfers may be cut further. Mr. Speaker, the 1977 arrangements for EPF worked very well and met the objectives which the federal government had propounded in 1976. Subsequent disagreements arose because federal politicians realized that they had forfeited the right to dictate how these grants for health services and post-secondary education were to be spent, and because they felt that they were receiving too little credit for the federal expenditures involved. I will now out1ine the outcome of discussions on equalization. Mr. Speaker, although the federal budget proposals for equalization would have brought a broader base of revenues into the formula, these revenues would have been equalized to an Ontario standard rather than a national average standard. In addition, the federal government proposed that the se payments should not grow faster than GNP - a measure designed to restrain the rate of growth in equalization payments. I objected strongly to the federal proposal on equalization because it was conceptually unsound in that it tied the equalization receiving provinces to the economic fortunes of a single province, Ontario. Late in the negotiation process another major financial issue emerged. It became apparent that our equa1ization payments for 1980-81 and 1981-82 were based on population estimates which would be reduced when the census results were finalized. Because of the sensitivity of the equalization formula to population changes, it was estimated that New Brunswick would have to pay Canada almost $80 million in 1982-83 if preliminary census figures were correct. This would have been a major financial blow coming on top of the cutbacks in Estab1ished Programs Financing. Mr. Speaker, it was not until the very last moment that the federal government compromised and put forward an alternative equalization proposal which addressed most of my criticisms of the formula advanced in the federal budget. After strong representations by the Premier of this province, Hon. Richard Hatfield, the federal government also agreed to forego recovery of equalization overpayments for 1980-81 and 1981-82 as part of the settlement with respect to the new equalization formula. On the basis of final census data, I now expect this concession by Canada to be worth about $60 million. This is for New Brunswick only. Because of the representation our Premier made, these benefits will accrue to the provinces which are recipients of equalization. This was the compromise on equalization which formed the basis of the legislation introduced in Parliament on March 19, 1982. Mr. Speaker, New Brunswick is satisfied with the new equalization program and wishes to acknowledge the special consideration given by the Minister of Finance Hon. Mr. MacEachen and the other federal ministers from the Atlantic Provinces. Not only will the new formula yield more revenues to New Brunswick than the initial federal proposal but, if federal data turns out to be reasonably accurate, it could yield more revenues than an extension of the 1977 formula. Mr. Speaker, I shall now turn to the budget plan for 1982-83. The past year has been a sobering experience for Canadians who have become accustomed to a continuously expanding economy. The very deep recession which this country has experienced over the past months appears to be abating but it will be another year or so before we can expect any real resurgence of economic growth. Our task in developing a response to this situation in the budge t for 1982-83 has been complicated by federal policy. The government of Canada has opted to a110w the recession to run its course without attempting significant intervention to improve the economy. In some respects the high interest rate policy of the Bank of Canada has contributed to the downward slide in national production. Federal policy regarding transfer payments is also a problem the reductions in EPF transfers are by no means the full measure of the impact of federal retrenchment on our budget for 1982-83. Federal reductions and withdrawals in several program areas have added about $20 million to our spending this year. I shall note some of these in my review of the budget's expenditure highlights. Those of us who hold elected office at the provincial level of government are much closer to the electors who put us there than are our federal colleagues. We cannot overlook the hardship and distress created by hard times. In my view, one of the great strengths of our federal system is the responsiveness of provincial governments to the needs of the people in any given region. In developing a budget plan for 1982-83, the government was particu1arly conscious of the state of our provincial economy and of the hardship that many people face as the result of economic conditions. We are acutely aware of our responsibility to respond to the needs of that situation. Accordingly, the budget for 1982-83 is expansionary. It is designed not only to support economic activity but to turn the corner faster to a stronger and more robust provincial economy. We have a1so accelerated spending on social programs, partly to support the economy and ease the burden of recession on people, but also, to hasten the day when a nationa1 standard of public services for people living in this province can be assured. This budget reflects our confidence in our economic future; it is an investment in that future. It also reflects a confidence in our federal system, for I believe that the federal government will reverse its current policy by providing funds necessary for social programs, particularly in regions where services fall short of national standards. I would now like to review the economic thrust of the 1982-83 budget. On the second day of this session of the Legislature the Premier tab led "Meeting the Challenge of the Eighties: An Economic Development Strategy for New Brunswick". Subsequently my colleagues tabled detailed sector strategies for agriculture forestry fisheries mining manufacturing tourism and transportation and outlined the manner in which the several areas of government policy will contribute to the achievement of economic and social goals. The government's economic development strategy is a reaffirmation of its commitment to development of the New Brunswick economy for the benefit of all our citizens. The government's pledge to faster development of the New Brunswick economy was a cornerstone in developing this budget containing as it does measures to strengthen the economy both in the short and longer term. Mr. Speaker my colleagues on the Cabinet Committee on Economic Development Policy will be presenting in some detail budgets of the respective departments over the next few weeks. I shall however outline some of the highlights. Mr. Speaker agriculture is an important sector of the provincial economy not only for the direct production that it yields but also because of the food processing industry that it supports. In 1982-83, the Department of Agriculture's operating budget is nearly $21 million, an increase of 24.8% over last year's budget. Because potatoes are one of the major sources of farm cash income, the government will continue to support and develop this sector. The government will participate in construction of new modern greenhouse facilities at the Bon Accord potato seed farm and a modern tissue culture facility in Fredericton to improve our capacity to produce high quality disease- free seed. An important new effort to further stimulate offshore sales of seed potatoes will continue this year. An adequate supply of credit at reasonable rates is essential to the growth and development of agriculture. The budget allocates $11.1 million for loans to farmers in 1982-83 and an additional $2.9 million in interest subsidies. If our livestock and poultry industry is to remain viable in the future, we must achieve a greater degree of self-sufficiency in total feed requirements. To this end, farmers will be encouraged to increase production of high protein crops and to initiate new crop development. There will be a continued expansion of the crop insurance program this year. In my budget last year, 1 announced the province 1 s participation in the Moncton arena agri-food exhibition complex; $500 000 will be allocated in 1982-83 as the province's share of the cost of construction of this facility. Despite the withdrawal of federal cost sharing, the land development program is being continued with an additional $250 000 of provincial funding. Mr. Speaker, the Fisheries department's operating budget for 1982-83 amounts to $8.9 million, an increase of 39% over last year's budget. One and one-half million dollars is provided for a special assistance program to help fishermen facing a particularly difficult situation in 1982. My colleague, the Minister of Fisheries, will be providing details on this new program. One of the larges t increases in the fisheries budget is in the Fisheries Development Board, where the interest subsidy on provincial loans to fishermen is provided. This subsidy is the difference between the cost of borrowed funds to the government and the rate at which we lend money to fishermen. This will amount to more than $2 million in 1982-83. The magnitude of the subsidy reflects the attractive rate of interest charged on provincial loans and the large volume of lending. Department of Fisheries loans, largely to fishermen to finance the purchase of boats, will amount to $16 million in 1982-83, an increase of $1.5 million over last year's budget. Funds are also provided in the Fisheries budget for new or expanded services, including an additional $110,000 to enable operation of marine service centres and mobile lifting units, and $400,000 to rebuild the cradle of the Bas Caraquet haulout. Mr. Speaker, New Brunswick is rich in natural resources and our forestry and mining sectors have for years made a substantial contribution to our economy. In keeping with the government 1 s determination to obtain the full potential of the forestry and mineral industries, operating expenditures by the Department of Natural Resources in 1982-83 are budgeted for $38 million, an increase of 24% over last year's budget. 1982-83 is the first year of operation of the Crown Lands and Forests Act and this year's estimates provide for the implementation of this important legislation. Spending by the department will concentrate on protecting and fully using our forestry resource, encouraging mineral exploration, and expanding our mineral inventory. For example, expenditures on forest extension will be doubled in 1982-83, forest management will be up by 29%, forest service operations will be increased by 26% and forest insect control will increase by nearly 20%. Departmental spending on mineral resources will increase by 72% over last year's budget. These increases include extra funds to maintain programs from which the federal government will withdraw in 1982-83, including forest extension services and work to further document potential areas of mineral resource development in the province. The fuel-wood program, which helps New Brunswickers obtain ready access to low cost fuel wood, will continue this year at a funding level of $250,000. In addition to its operating budget, the Department of Natural Resources will provide for over $1.7 million in capital construction in 1982- 83, $1 million of which provides for commencement of construction of the Maritime Forestry Complex here in Fredericton. The government's commitment to the manufacturing sector of New Brunswick is emphasized in the budget of the Department of Commerce and Development which, at $30 million for 1982-83, is 62% higher than 1981-82. There are six major components in this dramatic increase: Firstly, the government will assume responsibility for all programs previously financed under the Industrial Sub-Agreement wills DREE. We are disappointed that the federal government has decided to stop cost-sharing of successful provincial programs such as Regional Economic Development Commissions, Small Industry Financial Assistance, and Industrial Infrastructure. Total funding this year for these previously cost-shared programs will be $5.8 million. Second1y, in recognition of the processed food industry's potential, a Processed Food Division is being created within the Department of Commerce and Development. It will offer a full range of marketing, technical and management support services to both agricultural and fish processing firms in this province. Additional funding of $367,000 is being provided in 1982-83. This fulfills a major plank of our 1978 e1ection platform. Thirdly, Mr. Speaker, we are expanding our successful financial assistance program for small industry. Effective immediately the sales limit for eligible firms will increase to $1.5 million from the present $1 million, and the approved capital cost limit will increase to $150,000 from the present" $100,000. The cost of this expansion is $600,000 bringing total funding for financial assistance to small industry in 1982-83 to almost $4 million. Fourthly, because the infusion of modern technology in our small and medium-sized firms is important for future growth in manufacturing, the government has decided to open a Manufacturing Technology Centre based at the University of New Brunswick, l'Université de Moncton and the Research and Productivity Council. The centre will connect with our Community Colleges so that training for these all important skills will be available in both official languages throughout the province. The centre will be in full operation in three years. Funding of $500 000 is being appropriated this year to acquire the host computer at U.N.B. and work stations at participating agencies. Fifthly, the government has agreed to provide water and sewerage services and adequate highway access for the establishment of the Mitel manufacturing facility in Buctouche. Over $2 million is being provided by Commerce and Development for water and sewerage, and a further $1.5 million is being provided under the Department of Transport at ion for the required highway interchange. Finally, Mr. Speaker, the estimates include an initial contribution of $2 million as part of a total provincial commitment of $10 million towards the cost of the zinc reduction plant in Belledune. This is in addition to assistance provided under the Northeast New Brunswick Subsidiary Agreement. Mr. Speaker, the government will continue to promote and develop the tourism industry in New Brunswick. In 1982-83 the Department of Tourism will spend over $14.5 million, with about $3 million being earmarked for promotion and marketing. Capital spending on provincial parks and tourism information centres will amount to $2.8 million in 1982 83. We will assist in the Magnetic Hill deve10pment and improve or expand several tourism information centres around the province; $230,000 will be spent on the Chatham tourist information centre; $100,000 in Saint Andrews; and $200,000 in Saint John. In addition, $200,000 will be spent to assist tourism development in the Alma area. As for provincial parks, $121,000 will be spent on Sugarloaf, $138,000 in Parlee Beach, $225,000 in Woolastook, $128,000 in Mactaquac and $85,000 in New River Beach. In addition, S457,000 will be spent on improvements to other parks throughout the province, and $500,000 has been earmarked for land acquisition for future park expansion. Mr. Speaker, unemployment is a serious problem in New Brunswick as it is everywhere in Canada at this time. While it is not a permanent situation, it is nonetheless destructive in its effect on individuals and families throughout the province. The government of New Brunswick is not prepared to stand by and do nothing in the face of this serious situation. The Labour and Manpower budget for 1982-83 contains $10 million for a major program of employment stimulation. Our job creation program will provide an estimated 3900 jobs for New Brunswickers. The program will generate public sector employment at both the municipal and provincial levels of government. There will be special programs for are as especially hard hit by layoffs. Substantial funds are available as well for private sector job creation, where public money generates additional private funds to create jobs. Mr. Speaker, the government is well aware of the particular needs of students at this time when temporary jobs to help finance an education are scarce and the cost of education is rising. With that in mind our temporary job creation program includes provision for student employment. Mr. Speaker, this budget provides $37.8 million in operating expenditures for Continuing Education, an increase of 22.7% over last year’s budget. The capital budget will be almost tripled to $2.85 million for work on Community College campuses in the Miramichi, the Southeast and Woodstock. In today's society, Mr Speaker, job creation and productivity are the keys to future prosperity. 'To achieve these dual objectives, training and retraining to adapt to new technologies are essential. New programs and equipment are included in this budget for instruction in such areas as electronics, agriculture, power engineering, gas fitting, tool and die, computer programming and word processing. 1 am certain that hon. members will agree that such initiatives will pay handsomely in future economic and social gains. Mr. Speaker, our goal of ensuring financia11y secure and well planned municipalities is essential to the sound economic development of the province. Continued emphasis on this objective is evidenced by an 18.2% increase in the operating budget of the Department of Municipal Affairs. The municipal grant formula, which is the cornerstone of sound municipal finances in this province will transfer $84.2 million in grants to our municipalities in 1982-83. The stimulation grant program, which assists municipalities with specific capital projects, will continue in 1982-83 with $6 million available for this purpose. In keeping with our practice of helping municipalities provide services at the most reasonable cost possible, legislation will be introduced this session to create a Municipal Finance Corporation which will borrow funds on behalf of municipalities. With current high interest rates and tight financial markets, municipalities are finding it even more difficult to borrow on acceptable terms. Located in the Department of Finance, the Municipal Finance Corporation will raise funds on behalf of provincial municipalities, enabling them to benefit from New Brunswick's A+ credit rating. This, Mr. Speaker, continues the government's policy of ensuring that our municipalities remain on a sound financial footing. Our success in assisting municipalities provide efficient services at reasonable cost is reflected in the continuing low property tax rates, which are among the lowest in Canada. Transportation is another priority of this government. The $600 million highway improvement program outlined by the Minister of Transportation on April 11 is solid evidence of our commitment to a safe and well maintained highway system. In 1982-81 the Department of Transportation will spend nearly $220 million. Operating expenditures will be over $92 mill ion, inc1uding $30 million on road and bridge maintenance, $27 million on snow removal and over $8 mi Il ion on ferries and wharves; $27 million will be spent on system design, safety, engineering and maintenance of machinery and equipment. On Capital Account, the department will spend over $122 million on improvements to the province's highway system in 1982-83. Mr. Speaker, $20 million will be spent on new bridges and $63 million will be earmarked for paving, grading and chip sealing highways in the coming year. The province will also spend $8 million on municipal designated highways and $15 million on other arterial highways throughout the province. Mr. Speaker, the government's five-year program will result in the completion, realignment and upgrading of 280 kilometres of the province's primary highway network. An additional 200 kilometres of new roads will be constructed under the plan and 1000 kilometres of highway will be strengthened and resurfaced; 100 bridges will be replaced over the next five years and 570 kilometres of secondary roads will also be upgraded. Mr. Speaker, this government introduced the Clean Environment Act in 1971. Over the past decade we have worked to ensure that economic development can occur without damage to the environment. The Department of the Environment' S operating expenditures this year will increase by 24% over last year's estimates. Spending on pollution control, specifically in the area of hazardous waste management, will be significantly increased. In 1982-83 the department will open an office in Chatham to serve the people of that important region; two positions and $45 000 have been budgeted for this purpose. The department will continue financial support for the construction of municipal sewage treatment facilities and about $20 million will be provided for this purpose. In addition to the ongoing program casting $7.8 million in 1982-83, this will be the first year of a new program of capital assistance for the construction of sewage collection and treatment projects. The government will provide an additional $12 million in seed capital for more than 20 municipal projects to be undertaken in 1982. This new program will replace, to a considerable degree, federal funds which were formerly available for this purpose. Last year the federal government cancelled an important program of assistance to municipalities. This government will not abandon our villages, towns and cities. Hon. members will appreciate from these expenditure highlights that the 1982-83 budget does a great deal to get New Brunswickers back to work this year, as well as preparing the way for a resurgence in economic activity next year. Unfortunately, Mr. Speaker, a good deal of that effort is necessary because the federal government has cut back or abandoned altogether man y vital programs. Mr. Speaker, our budgeting for economic development departments will do a great deal to support the economy in a difficult year. Our total capital budget is designed to provide a major boost to the provincial construction industry. In 1982-83 we are undertaking the largest capital investment program ever. At $279.5 million, our capital spending is budgeted to exceed 1981-82 levels by over 32%. Our investment in these capital facilities will provide benefits to New Brunswick for many years in the future, while offering support to an important sector of the provincial economy during this difficult economic period. Mr. Speaker, I shall now turn my attention to social programs. This government will not follow the pattern established by the federal government of cutting back on social programs. In preparing the 1982-83 budget we have deliberately tried to avoid such action, even though our revenues are being curbed by slow growth and reduced federal transfers. Since 1970 we have followed a policy of bringing provincial social programs in line with that available elsewhere in Canada. A year when people are suffering the hardship of recession is not the time to abandon that policy. Honourable '1Iembers will be pleased to learn that the 1982-83 budget provides for substantia1 progress in attaining our goal of improved social services. I shall now outline some of the features of our expenditure plans for social departments. The Department of Education's operating budget will be $366.2 million, an increase of 27.6% over the 1981-82 budget. However, during the course of last year, the department's budget had to be increased by $40 million mainly because of increased salary payments to teachers under the new contract. When the 1981-82 budget for this department is so adjusted, the rate of increase in 1982- 83 is substantially lower than 27.6%. This year $333.6 million will be provided for the operation of local school boards. Another $4.3 million is budgeted for depreciation of school buses and renovations. Most of the remaining funds are accounted for by special education at $12.1 million; second language instruction at $4.6 million; and school book services at $3.9 million. In 1982-83 increased emphasis will be given to special education which will grow by 38.2% over last year's budget levels; to school board funding which is growing by 27.6%: and to the school book service growing by 20.4%. With a capital budget of $55.6 million this year, major activity will be underway in over 20 school projects throughout New Brunswick. Mr. Speaker, the government is committed to maintaining a high standard of health care. To this end, the Department of Health's operating budget is $484.4 million, an increase of 20.2% over last year. By far the largest part of this budget $276.4 million - is devoted to the operation of hospitals in New Brunswick. During our term in office we have opened modern regional hospitals in Fredericton, Moncton and Bathurst and during the course of this year will open the province's largest hospital in Saint John. Construction of a fourth is underway in Edmundston and construction of the Campbell ton hospital will begin this year. Another major element of the budget is the Medicare program, which covers the cast of necessary medical services to New Brunswickers and is budgeted to receive $85.1 million in 1982-83. Other major programs include $53.8 mill ion for nursing homes, and $16.3 million for the prescription drug program. The budget puts continued emphasis on the prevention of health problems and on the development of alternatives to high cost institutional care. The Extra Mural Hospital Program, introduced last year, is part of this thrust and it will be expanded this year to include Moncton city. The capital budget of the Department of Health this year is $38.4 million. In addition to work on new hospitals, several other capital projects will be undertaken, including major renovations at the Moncton Regional Hospital, construction of a community hospital in Sackville and expansiol1 of the Bathurst regional hospital. Mr. Speaker, we have made major strides in the prevention and treatment of problems arising from alcoholism and drug dependency. Funding for the Alcoholism and Drug Dependency Commission will increase by 18.7% to $5 million in 1982-83. This budget includes funds required to open a new treatment centre in Edmunston. Mr. Speaker, adequate housing for all New Brunswickers is a priority for this government. In recognition of this, my budget for 1982-83 will provide $1.1 million, an increase of 19% for the New Brunswick Housing Corporation. This year we will begin construction of another 86 unit senior citizen project in Saint John in conjunction with the market Square Development and a final 10 units of a 40 unit commitment in Fredericton. In addition, another 100 units will be made available to those qualifying under the Rural and Native Housing Program. Reflecting the new emphasis on direct aid to those in need of assistance, 1400 citizens of this province in rural areas will be provided with 10w il1terest loans ranging between 0 and 9%. The RATE Program will assist 1050 senior citizens during the coming year; and ass is tal1ce will be provided for 1650 people who built homes under AHOP and AHOP-Co-Op Programs. The Corporation will al so undertake a new program of repairs to about 1000 dwelling units of low income families. This budget meets the operating requirements of our universities as identified by the Maritime Provinces Higher Education Commission. It provides operating grants of $82 million for 1982-83, an increase of 12.6% over 1981-82. Including capital, the total Maritime Provinces Higher Education Commission budget for 1982-83 is 16.7% greater than last year. Mr. Speaker, even though the federal estimates for 1982-83 provide reduced funds for post-secondary education, the province has budgeted in 1982-1983 according to the needs of our citizens for these services. Funding for the Department of Social Services will amount to $209.3 million, an increase of 23.6% over the budget estimate for last year. By far the largest portion of the Social Services budget, $185.5 million, is allocated to community social services. This provides funding for all income maintenance programs and essential services for seniors, children, the disabled, and adu1ts. This year there will be several new initiatives in the Departrnent of Social Services. The very successful Community Based Services for Seniors Program will be expanded to cover all of the provincial Services to be provided including homemaker services, meals on wheels, friendly visiting, nursing services and in some cases adult day care. The wage exemption for social assistance recipients will be increased for $100 to $200 per month to encourage greater participation in the labour force. Mr. Speaker, the budget contains funds to allow payment of a higher rate of compensation to special care homes which serve people who require more attention because of their condition. This measure will enable these homes, licensed to provide accommodation to those unable to live alone, to continue to look after individuals requiring extra help. He have also budgeted funds to provide greater government assistance for day care. The government is expanding its commitment to enhance training and employment opportunities for single parents in particular, while at the same time, ensuring that day care services are available to those whose need is greatest, but can least afford them. Since this government came to office, we have substantially strengthened programs now under the Department of Youth, Recreation and Cultural Resources. The budget of this department in 1982- 83 is $18.7 million, an increase of 20% over last year. The largest share of the budget or $8.5 million, will go towards providing financial assistance for students. Library services will receive almost $4 million. Two significant program changes will be made this year: a substantial improvement to the Student Aid program and increased Amateur Sport. Yearly maximum assistance under the Stl1dent Aid Program will be increased from $3500 to $4000. This increase of $500 will be in the form of additional bursary money. Further financial assistance for special initiatives will be provided to the approximately fifty sports governing bodies throughout the province. This will encourage a more regional approach to amateur sport with particular emphasis on junior sport development. Mr. Speaker, I now turn to revenue matters. The revenue measures that are incorporated into this budget serve two purposes: to complement the economic and social objectives of the budget and to increase revenue available for government services. I shall first deal with measures designed to complement the program objectives of the budget. Firstly, let us look at a lower tax rate on propane. Currently, propane gas is taxed as a motive fuel at the rate of 21%. 1 have received numerous representations that this rate is too high in relation to the energy content of the fuel and that it penalizes those who find propane a better fuel for their purposes. Effective midnight tonight the tax rate on propane will be 13%. Secondly, there will be an increased sales tax exception for farmers. Representations have been made by the Federation of Agriculture and others for the removal of the sales tax on certain commodities. I am pleased to announce that effective midnight tonight the following items are exempt from tax when purchased by a farmer: Plastic film with ultraviolet barrier used for greenhouses and over-the-counter biologicals and medicaments. Also for the benefit of the agriculture sector, I am exempting equipment and parts used by agricultural drainage contractors authorized by the New Brunswick Department of Agriculture and Rural Development. Thirdly, there will be a higher maximum for the low business tax rate. This government has introduced many measures to lower the tax burden on small business. In 1979 we lowered the provincial business tax rate to $1 per $100 of business assessment for business properties assessed at $60 000 or less. Effective in the 1983 taxation year, the maximum value of business assessment eligible for the small business rate will be increased to $100 000 and, is a result of this change, about 1000 more business properties will benefit from the lower rate. Fourthly, there will be reduced property tax assessment. The Assessment Act currently provides a reduction in assessment 0f $6000 for women not supported by a husband, living in their own homes and having an income of $7000 or less. Effective in the 1983 taxation year, this provision will be extended to unmarried men and widowers in similar circumstances. Furthermore, the reduction in assessment will be increased from $6000 to $8000 for both men and women. This will yield a total saving of over $700 000 to qualifying homeowners. New Brunswick is the only province in Canada that does not tax railway stock. Effective midnight tonight, railway rolling stock will be subject to New Brunswick sales tax. For purposes of calculating the tax, such purchases by railroads will be a1located to New Brunswick according to a formula reflecting use of equipment in this province. This will yie1d approximately $1 million in a full taxation year. Mr. Speaker, the overall provincial tax burden on New Brunswickers is relatively low, particu1arly in relation to the expansion in services inherent in this budget. For that reason, an increase in taxes is part of the budget plan for 1982-83. In deciding on a tax increase, we wanted to ensure that such an increase did not bear heavily on those affected by the current recession. Thus, I am removing the 5.5% reduction in the New Brunswick individual income tax. This measure will be effective as of January 1, 1982, and will yield over $18 million in revenue in 1982-83. The 1982-83 budget provides for an increase in government services at a time when revenues are growing slowly. While this is the only responsible course in the current economic circumstances, it has meant that financia1 requirements will be $495 mill ion and that the net debt will increase by $363.9 million. Although this is a significant increase in the province's net debt, the total outstanding debt will remain within manageab1e bounds. At the end of this year, the net debt will stand at $1.4 billion. This level of debt amounts to 22% of the provincial Gross Domestic Product, which is approximately the same proportion as in the early 1970's. Mr. Speaker, the debt of this province is clearly manageable. In 1982-83 it is estimated that the cost of servicing the debt will be $225 million or 9.2% of total capital and ordinary expenditures. In comparison, the federal government has budgeted about 22% of its expenditures far debt service. Any meaningful examination of debt levels must take into account the purposes for which debt is incurred. Since 1970 this government will have spent over $2 billion on capital assets. During the same period, the increase in the net debt has been $1.1 bi11ion, or about $ 900 million less than the expenditures on capital assets. The net debt of this province has been incurred to build hospitals, schools, roads, bridges and industrial development infrastructure which is essential to provide public services and allow for continued development of the economy. These assets will be available for public use for many years in the future and in some cases will be in use long after the debt incurred is fully paid off. Furthermore, Mr. Speaker, it should be recognized that the capital assets of this province are worth far more than their construction cost. Because of inflation, many of these assets would cost substantially more if they were built today. For example, if the Fredericton regional hospital, which cost $29.6 million in 1976, were built today, it would cost over $60 million. We have made great progress in this province since 1970. The people of this province remember the state of the hospitals, schools, roads and other public infrastructure in 1970. They know what progress we have made. Mr. Speaker, the 1982-83 budget provides for expenditures on Ordinary Account of $2155 million. Ordinary Account revenues are forecast to yield $1991 million, for a deficit on the Ordinary Account of $164 million. With our record capital program, loans and advances and sinking fund instalments and serial redemptions, our financial requirements will amount to $495 million. Mr. Speaker, this budget is designed not only to see us through to a more buoyant economy in 1983 but to accelerate the transition. It is a budget built on an optimistic view of our future. In it, we have opted for an aggressive, active approach to our problems and opportunities, rather than a cautious and resigned one. It will serve New Brunswick well as a steppingstone to an era of renewed economic growth.