Province
Législature
Session
Type de discours
Date du discours
Locuteur
Fonction du locuteur
Parti politique
Saskatchewan
22e
2e
Discours sur le budget
7 May 1992
Edwin Laurence Tchorzewski
Ministre des Finances
Saskatchewan New Democratic Party


Thank you. Mr. Speaker, I'm honoured today to present this government's first budget to the people of Saskatchewan.

Before I go to my remarks, Mr. Speaker, I want to maintain an honoured tradition in this House, and that is present the copy of the speech and the estimates and supplementary estimates to the two opposition political parties.

I want to also indicate that we started a new tradition as part of the new, open style of government in Saskatchewan. And a copy of the budget speech and the supporting documents were provided to both leaders of the opposition parties at noon today for their information so that they could prepare for the speech that is going to be delivered at this time.

Mr. Speaker, last October Saskatchewan people turned from secrecy to openness, from conflict to co-operation, from inequity to fairness, from injustice to compassion. Today we begin rebuilding Saskatchewan together.

This government is turning a new page in our province's history by restoring sound financial management, re-establishing open, honest, accountable government, and renewing Saskatchewan's fundamental values. This budget is a new beginning. It has two straightforward goals: protection and restoration: protection so that our generation, like those before us, can safeguard all that our community has built for our children and our grandchildren; and restoration so that this province can once again enjoy financial freedom, because without it there is no future.

This budget delivers a message of realism from which springs hope and optimism. Now, Mr. Speaker, we inherited a financial burden but we're going to provide the leadership that is needed to solve it.

This financial difficulty cannot be wished away, but it can and it will be resolved by working together. And it's going to take all of us to be part of the solution for Saskatchewan, because if all of us come together now to tackle this unprecedented financial crisis, we will make the 1990s Saskatchewan's decade.

I don't deny that it's going to mean some very hard choices, but the measures that I'm announcing today set the stage for a positive future in this province - a future that our children and our grandchildren can look forward to. This province has a great future. The opportunities here are almost unlimited if we make the right decisions now. Our present financial predicament is robbing us of opportunities, and we have to turn this situation around now so that it won't rob our children of their future.

Now, Mr. Speaker, when the government took office some six months ago, everyone expected the financial situation of the province to grave. People knew that. But little did anyone know tt the true extent of the previous administrator irresponsibility in proper decision-making and rack extravagance was to the extent that it was.

You will remember, Mr. Speaker, that last spring Saskatchewan taxpayers were told that last year's deficit was $265 million. Was it $265 million, Mr. Speaker? No, it wasn't. In fact, after taking office we found that that deficit was in fact $960 million. And it took a series of tough measures but we have reduced last year's 1991-92 deficit to $846 million. Mr. Speaker, it can be done and we've shown that it can be done.

Now, Mr. Speaker, there's something that my parents taught me for which I will for ever be grateful. They taught me that people should be forgiven for their mistakes, but the one thing that could never be forgiven was dishonesty. Honesty was not in the last budget, Mr. Speaker, and it was not there for the last 10 years. And for that I will never forgive the previous administration.

Because you see, miscalculating the deficit was not the exception to the rule during the last 10 years, it was the order of the day. In 1986, an election year, the members opposite said that the deficit was $389 million. It wasn't $389 million, Mr. Speaker, it was $1.2 billion.

In 1991, again an election year, the members opposite said that the deficit would be $265 million, Mr. Speaker. It wasn't $265 million, it was almost $600 million more than that. It is no wonder that they arbitrarily shut down this legislature last June to avoid public scrutiny of their budget and their spending of tax dollars. Because the scrutiny would have revealed some incredible waste; almost $2 million in salaries to provide political staff to the Premier's office hidden in other departments and Crown corporations; $1,000 a night hotel bills, $3,000 a day consultants, and the list goes on and on and on.

Now, Mr. Speaker, upon taking office this government acted quickly to restore integrity to the province's finances. The legislature was recalled to restore accountability and to rebuild public trust. The Public Accounts and the financial report were tabled to outline the province's financial position. An independent Financial Management Review Commission was established to open the books and recommend ways to improve accountability. And legislation was introduced to end unconscionable severance packages.

And millions of dollars in wasteful spending was eliminated - things like closing of the trade offices in Hong Kong and Zurich and Minneapolis, saving $2 million a year. Spending on supplies and acquisitions and advertising and travel was reduced, saving $28 million. The Premier's office in Prince Albert was closed, saving $150,000 a year.

Mr. Speaker, this new government saved $114 million in only six months. We have turned the corner and ended 10 years of blatant mismanagement of taxpayers' dollars.

Much has been accomplished, but there is still much more to be done. The legacy of debt and mismanagement left by the previous administration extends far beyond what any of us could have imagined possible.

In February the Financial Management Review Commission reported to the people of Saskatchewan. Its report exposed the reasons why the public lost trust in the previous administration's ability to manage the province's finances.

Mr. Speaker, we didn't wait. This government acted promptly on the commission's proposals to restore public accountability and renew public trust. Almost $1 billion in bad loans and bad debts have been written off, including such things as $750 million in the Saskatchewan Property Management Corporation and $184 million in the Saskatchewan Water Corporation, the vast majority as a result of the Rafferty-Alameda project. Taxpayers have to carry that burden, Mr. Speaker.

Independently established accounting principles are being adopted, putting Saskatchewan at the forefront in open, honest, accounting practices. The Heritage Fund is being combined with the Consolidated Fund to form one major operating account for the government. And the financial well-being of our Crown corporations is being restored.

Now, Mr. Speaker, I want to just take a moment to talk about what has been done to our public enterprises. The previous administration plundered our public enterprises to pursue unwise investments and cover up ever-increasing, public deficits.

In 1991, the Crown Investments Corporation of Saskatchewan lost over $600 million. But that's not all, because in addition $875 million in non-recoverable debt was identified, meaning that assets under which the debt was originally incurred no longer exist or are no longer capable of generating a return high enough to service the debt. The Potash Corporation of Saskatchewan - now here was an asset that paid hundreds of millions of dollars in dividends and taxes to the province. It was privatized at a loss of $361 million, a loss that we now have to pay through our taxes.

Crown corporations were called upon to pay dividends to the province to cover up budget deficits, even if it meant that they had to borrow the money to do it. That's a loss of $312 million that we now have to pay through our taxes. The Saskatchewan Transportation Company - a Crown corporation so badly mismanaged that the Provincial Auditor's report has warranted an inquiry by the Department of Justice.

All of these, Mr. Speaker, are losses that you and I and the people of Saskatchewan now have to pay through our taxes. Well as one who was born and raised here and loves this province, I say to you, Mr. Speaker, that any government which tries to hide its spending, cover up its deficits, and run our public enterprises into the ground cannot be forgiven.

I want to assure you on behalf of my colleagues that with this first budget this government is changing all of that.

Our public enterprises will be part of rebuilding Saskatchewan. However, it is not without cost.

As a direct result of restoring the Crown Investments Corporation's financial position, the 1992-93 budget deficit will increase by $93 million. And to ensure that our public enterprises are accountable to the members of the legislature and the people of Saskatchewan, Mr. Speaker, audited financial statements for the Crown Investments Corporation will be presented to this Assembly for public scrutiny each and every year from now on.

This government has adopted accounting, auditing, and reporting systems to make sure that the financial dealings of this province will never be hidden from the people of Saskatchewan again.

Mr. Speaker, today our province stands at a critical crossroads. We must choose a path for the future and that choice must reflect the harsh realities of what the previous administration did to the financial integrity of Saskatchewan. It is simply beyond imagination to think that Saskatchewan's financial position deteriorated so much in such a short time.

In 1983 the former premier was quoted as saying the following and I think he said it in New York to a business crowd. He said, and I quote: Saskatchewan has so much going for it that you can afford to mismanage it and still break even. Well, Mr. Speaker, he was dead wrong.

No family could have run their household the way they did run this province. There is not a business or a farm in Saskatchewan that could have operated that way and survived. A proud history of operating surpluses became an unbroken string of deficits year after year after year.

The debt accumulated at an unprecedented pace. The total debt of Saskatchewan increased by $10 billion in 10 years - $10 billion in 10 years - and to what end to what benefit?

Well there are some results. There is a result that every man, woman, and child in this province has been saddled with $10,000 of new debt - every single individual person, the youngest and the oldest. The first 17 cents of every dollar that your government raises this year will go just to pay interest on the money borrowed by the previous administration.

In 1981-1982 government interest charges amounted to only $43 million. Do you know what they are now? This year taxpayers will spend $760 million on interest charges - more than $2 million a day - $760 million in interest charges.

But consider this. Imagine the jobs and the economic opportunities that could be created with $760 million or the educational opportunities that we could provide to our young people. Imagine $760 million cut in taxes this year. Imagine all of that and realize all our community has lost because the members opposite would not and could not bring their spending and their borrowing under control.

Mr. Speaker, they had neither the courage nor the will. Saskatchewan families did not create this situation. Saskatchewan's new government did not create this situation. Our community has inherited a legacy from that previous administration that cannot be forgotten and will not be ignored because the responsible path at the crossroads is clear. We must now pay for the mismanagement of the past 10 years. The mortgage is due. We must start to live within our means because it is the only way to rebuild Saskatchewan.

And, Mr. Speaker, this government has acted decisively to get spending under control. For the last 10 years operating expenditures increased on an average of 6 per cent a year. This year, in this budget, operating expenditures will be reduced by 3 per cent.

However interest on the public debt will increase by $237 million - the largest single increase of expenditure in this budget. And that interest expense is the direct result of billions and billions of dollars borrowed over the past 10 years. This borrowing cannot continue. Steps have to be taken to reduce Saskatchewan's deficit. Spending must be brought under control.

My colleagues and I have looked carefully and responsibly in evaluating government expenditures and in so doing we did not ask more of our community than we have demanded of ourselves. Cabinet ministers have taken a 5 per cent cut in salary. Extra pay for legislative secretary positions has been eliminated. Allowances for government members with extra duties have been reduced. Communications allowances for MLAs have been cut by 25 percent. Out-of-scope salary ranges in the public service have been frozen. Advertising and communication budgets in government departments will be cut by almost 30 per cent.

Almost 40 boards and commissions are being dissolved and the membership of others, including the boards of directors of SaskTel and SaskPower and SGI, is being reduced to eliminate more than 500 appointments. In our Crown corporations, executive car allowances and other perks are being reduced very substantially.

Now, Mr. Speaker, this government is leading by example and with these actions we have proven that the days of unrestraint and reckless spending are over.

But that's not enough and we have not stopped here. In addition my colleagues are introducing greater cost efficiencies and savings in government operations.

The family Foundation will be eliminated and its priority functions amalgamated with other departments. The farm Ownership Board will be merged with the Farm Land Security Board to consolidate services. The communications policy unit in the Department of Education will be eliminated. And funding available for payments to physicians will be reduced. Fair and open tendering is being restored again.

Now, Mr. Speaker, I want to make it very clear that this is not the end of our search, but the beginning of a process that will see government operations managed more cost effectively in the future.

But all our community has had to be involved. Expenditure reductions has also involved our hospitals and our universities and our schools and our municipalities. Their funding has been reduced this year and will be reduced further next year. Over the next two years the government will work with local authorities to find greater cost efficiencies, improved services, and plan for the future based on local priorities.

Mr. Speaker, the grim reality today is that the previous administration mortgaged our children's future, and that's why we can no longer pay for all of the services that governments provide. Programs that we simply cannot afford will be eliminated. And other programs will be modified to ensure that they can continue during this fiscal crisis.

And I want to say to the House, Mr. Speaker, and to the people of Saskatchewan, that in total, expenditure reductions in this budget amount to $344 million. More than 20 programs are being eliminated. Some with some difficulty, but it has been necessary because of the financial situation.

Programs like the mortgage protection plan, the Saskatchewan pension plan, operation quick start, and feed grain adjustment program are the programs that are being modified to ensure that they continue during this fiscal crisis.

Because the important thing here, Mr. Speaker, is that if we don't get the financial affairs of this province under control and managed well, many of the social services and health care programs that we now have we are in danger of losing. And we were not elected to let that happen.

And as a result, optometric services will continue to be provided free of charge to low income seniors and families, as well as children under the age of 18. But all others will pay for eye examinations.

Funding for chiropractic services will be reduced. Saskatchewan prescription drug plan will be changed to save $27 million this year, and costs will rise for most Saskatchewan residents. But those most vulnerable to excessive hardship will be protected. In addition the senior citizens' heritage program will be changed to target benefits more directly to lower income seniors.

Mr. Speaker, this budget does not introduce health care premiums.

And I want to say, Mr. Speaker, that the details on these and many other initiatives that are included would be provided by my cabinet colleagues in the days ahead.

Now, Mr. Speaker, difficult decisions were demanded, and difficult decisions were made. But our children did not create this financial crisis, and we have no right to burden them with it.

In 1984 the minister of Finance at the time, Bob Andrew, said - and he was correct in this quote - he said the following. He said: I believe that all governments must work in concert to reduce budget deficits. Failure to accomplish this will force harsh financial penalties on our children. It is inevitable that mounting deficits will result in unwanted reductions in government services and tax increase.

Mr. Speaker, he was seemingly unaware in 1984 of just how quickly his government's failure to reduce budget deficit would cripple our community and require the things that he forewarned about to have to happen. And as members opposite know, deficits are just deferred taxes. The bill has come due. And as a result, some tax measures are required to reduce this deficit - tax measures which are made necessary because of the mismanagement and the irresponsibility of the former government during the whole of the last 10 years.

And so today we ask everyone in our community to join in restoring financial help in Saskatchewan based on their ability to do so. A 10 per cent deficit surtax will be introduced on the personal income tax system effective July 1.

Now, Mr. Speaker, an increase in personal income tax is the fairest way of asking those who can most afford it to contribute to the deficit reduction and the restoration of financial well-being in Saskatchewan.

The corporate sector will also be asked to contribute to deficit reduction. The general corporation income tax rate will increase to 17 per cent effective January 1 . The corporation capital tax surcharge rate on resource corporations will increase to 3 per cent effective April 1 , and the corporation capital tax on the financial institutions will be increased to 3.2. . . three and a quarter per cent effective April 1.

And further, as of midnight tonight, the tobacco tax will be increased by 33 cents a package of 25 cigarettes, with similar increases for other tobacco products. And the education and health tax will be increased by 1 percentage point that will be extended to include tobacco products.

The tax on gasoline and diesel fuel will be increased by 3 cents per litre. Now in addition, Mr. Speaker, the farm fuel tax exemption for gasoline will be restructured so that its very important benefits are distributed fairly throughout the farming community.

Effective midnight tonight, bulk dealers will be required to collect a fuel tax on their sales of gasoline to farmers and other primary producers, and the current farm fuel tax exemption will be replaced by an annual rebate program. But this will not apply to diesel fuel. This change, Mr. Speaker, is being made necessary to ensure that the farm fuel tax exemption is provided only to those persons in the farm community who are entitled to it.

Now, Mr. Speaker, today all of our community has to pay for the mistakes of the members opposite. These tax changes necessary to reduce the deficit are a direct consequence of their mistakes. And I say to them, Mr. Speaker, you jeopardized everybody's future with 10 years of runaway spending and uncontrolled deficits and for that Saskatchewan people will for ever hold you responsible for this burden.

Let me take a moment to put the depth of the previous administration's legacy into perspective. The revenue and expenditure measures contained in this budget would represent an operating surplus for the province of $243 million. Let me say that again, Mr. Speaker: the revenue and the expenditure

measures in this budget would represent an operating surplus of $243 million, except for one thing - the payment of $760 million in interest charges, money spent paying for the previous administration's mistakes. And that's shameful, Mr. Speaker.

Overall, including the interest charges on the debt accumulated over the last 10 years, the province's deficit will be $517 million, down more than $300 million from last year. We have established a clear, downward trend in the province's deficit trajectory and we are adamant about staying that course.

Well, Mr. Speaker, in spite of the province's financial situation, this government is determined to protect the most vulnerable members of our community. And I'm pleased to be able to announce that the Saskatchewan chi Id tax reduction for low income families will be increased by 25 per cent to $250 per child annually, effective July 1.

Funding for child hunger programs will be increased by 35 per cent.

Grants for child-care centres will be increased by 21 per cent.

Rates for the Saskatchewan Income Plan will be increased by $120 annually. Home care funding will be increased by nearly 20 per cent.

Twenty-eight million dollars in additional funding for the Saskatchewan Assistance Plan will be provided; and the new community employment program will create 1,000 jobs and help Saskatchewan communities undertake worthwhile projects.

In addition, the Saskatchewan Assistance Plan special allowance for the disabled will be increased by 25 per cent. Transit assistance for the disabled will be increased by 15 per cent.

Four million dollars has been targeted to meet priority water and sewer infrastructure needs in northern communities.

The northern food allowance in the Saskatchewan Assistance Plan will be doubled to $50 a month.

Mr. Speaker, we are committed to compassionate policies and that commitment is reflected in this first New Democratic government budget.

Even when we have to apply tough measures in a budget of restraint, because we have to deal with the financial circumstances of this province, we have paid attention to those who are most in need in Saskatchewan.

Mr. Speaker, rebuilding Saskatchewan together also means working to address the critical situation facing our rural communities and our farm families.

The farm trek to Ottawa in November marked the beginning of a concerted effort to find long-term solutions to the problems in agriculture - debt and income. To begin to address the problem of farm debt, this government will act on the recommendations of the Farm Debt Advisory Committee by establishing a six-year leaseback program for farmers, developing a voluntary farm debt mediation process, enabling farm families to offer additional security to access operating and other credit, and examine alternate forms of financing.

And as for farm income, we began six months ago with totally inadequate farm safety net programs agreed by the previous administration. And with the advice of a producers' committee we've been able to make some changes to the gross revenue insurance plan this year. However, Mr. Speaker, these changes are only modifications to a fundamentally flawed program. We recognize that.

This government will continue to negotiate with the federal government for an effective program for Saskatchewan farmers. Ottawa promised an adequate income stabilization program and we're going to do all that we can to make Ottawa keep its promise.

Mr. Speaker, while Saskatchewan farmers face the most serious crisis since the 1930s, the government in Ottawa continues its practice of financial off-loading on individuals and provincial governments. This year, this year alone, federal off-loading in agriculture programs will cost Saskatchewan taxpayers over $200 million.

This trend started because the previous administration caved in to Ottawa's pressure to cost-share programs that were clearly the federal government's responsibility. In total the federal off-loading in areas like agriculture and health and education mean a loss of more than $500 million to Saskatchewan taxpayers in this year alone $500 million.

Mr. Speaker, if it were not for the federal government's off-loading, this budget would be balanced. Ottawa is abdicating its responsibility to promote and protect agriculture and vital social programs like health and education. Ottawa's failure is hurting Saskatchewan families.

Mr. Speaker, let me assure you that within our limited financial resources, this government will do all it can to meet the needs of Saskatchewan families. The budget I am presenting here today launches major new initiatives to enhance wellness and prevention, including important initiatives like forming new partnerships with Saskatchewan communities to promote the development of community-based services, focusing resources on prevention of illness, addressing urgent health needs in northern Saskatchewan, enhancing mental health services, and encouraging healthy life-styles.

These measures reflect our commitment to community-based, community-driven health care founded on wellness and prevention, Mr. Speaker. The people of Saskatchewan and my party together pioneered medicare. Today the people of Saskatchewan and this government together will forge ahead, building a new generation of health care in Saskatchewan.

Mr. Speaker, this budget provides $20 million for family support programs, including new initiatives like counselling and services for expectant teen-age mothers; a community-based family planning initiative; and measures to address the problem of family violence.

Programs currently available throughout government to meet the diverse needs of Saskatchewan women will receive greater funding this year, including the breast cancer screening program, child-care facilities, the automatic enforcement of maintenance orders, child-care services in rural and northern Saskatchewan.

With this budget, the government has turned the corner and renewed Saskatchewan's fundamental values of fairness and compassion. This budget is a new beginning for the people of Saskatchewan.

One of the most important priorities for Saskatchewan people has to be stimulating economic opportunities and creating jobs. And in sharp contrast to the financial position of the government, the underlying strength of our economy is good reason for hope and optimism. Saskatchewan's economy is strong.

The province's rich endowment of resources, the lower interest rates, and the lower exchange rate all add up to new opportunities for Saskatchewan men and women. Just look at the housing starts - more than double what they were last year, Mr. Speaker. Government is determined to assist Saskatchewan entrepreneurs and communities to make the most of these opportunities in our economy.

And I am pleased therefore, Mr. Speaker, today to announce that the small-business corporation income tax rate will be reduced to 9 per cent effective July 1.

And to assist our rural hospitality industry, benefits from the Saskatchewan liquor Board's discount policy will be redistributed so that the smaller vendors get a larger share; and video lotteries will be introduced, starting along the international border.

And to keep our manufacturing and processing industries competitive with other provinces and to protect jobs, Mr. Speaker, the education and health tax on direct agents used in manufacturing and processing activities will be phased out over the next three years.

Initiatives to enable co-operative and private and public sectors to work together in partnership to invest directly in Saskatchewan business will be undertaken. And funding for a new institute for energy conservation and development will be provided in this budget. These positive measures, Mr. Speaker, will provide jobs today and economic opportunities for our future.

But that's not all. Our Crown corporations will also develop new and more effective ways to contribute to Saskatchewan's economic future. In co-operation with the private sector, Saskatchewan Power is exploring new co-generation projects which will strengthen economic development. SaskTel international is actively engaged in foreign markets, providing jobs and opportunities for Saskatchewan people and telecommunication services for other nations.

Funding in this budget and the activities of the Crown corporations, including capital and environmental projects and student summer employment and new housing initiatives, will provide economic opportunities and create thousands of jobs for Saskatchewan people.

The Premier's Economic Action Committee will develop a long-term economic strategy for Saskatchewan through an effective, co-operative partnership with all sectors of our economy, Mr. Speaker.

Ours is an approach based on the belief that while we compete in a global economy, achieving success depends on working together at home. The whole purpose of producing greater wealth, more goods, and better services, is surely to make life better - not only the standard of living but the quality of life.

And like generations before us, by following the principle of co-operation, we will rebuild Saskatchewan together and that is the opportunity of the 1990s in Saskatchewan.

All the people in Saskatchewan know, members in this House know, that this province has a proud history of pulling together during tough times. That is a kind of creative, co-operative effort that is needed today. In every community, large and small, no matter where they may be, people believe that we have got what it takes to turn things around right here at home. And as I travel from one end of this province to the other, people everywhere talk about the need to pull together and to fight for the future. They want to work together in a significant and a meaningful way to overcome the difficult financial situation.

They want an opportunity to invest directly in rebuilding Saskatchewan. People want government's borrowing outside of the province reduced. And they're tired of seeing millions of dollars in interest payments leave this province each and every year. Saskatchewan people know that their hard-earned dollars could be better spent right here working for our communities and our families.

We recognize that, Mr. Speaker. This government recognized that because we'll listen to the people. And I'm pleased to announce today that your government is going to provide that opportunity and Saskatchewan savings bonds for Saskatchewan people will be introduced in June.

We're going to show the world that we've got what it takes to turn this around and make the 1990s Saskatchewan's decade.

Now, Mr. Speaker, this budget is founded on fiscal responsibility, public accountability, fairness, compassion, and economic reality. Fiscal responsibility because we are defining the road to recovery and working towards financial freedom. Public accountability because we are laying a solid foundation to provide open and honest government. Fairness because we are calling on all of our community to join us in rebuilding this great province. Compassion because we will protect those most vulnerable in our community. And economic reality because stimulating economic opportunities and helping to create jobs is a vital part of rebuilding Saskatchewan.

Today is a new beginning in this province. Today we begin to confront the future with high hopes and great faith, secure in the knowledge that New Democratic governments throughout our province's history have been successful in achieving their mandates.

They've been successful in achieving their mandates, and as they have succeeded, so too will we.

It will not be easy. Nothing this important ever is. While we have to pay for the mistakes of the previous administration, let us look forward to the day when our community can join together in celebrating our financial freedom.

Let us look forward to the day when we can tell our children that though we entered the 1990s plagued by financial crisis, we made the difficult decisions. We turned a new page in our history and we put this province firmly on the path to prosperity.

Mr. Speaker, it is now time to rebuild Saskatchewan together.

Mr. Speaker, I now move, seconded by my colleague, the House leader, the member from Regina Elphinstone:

That this Assembly do now resolve itself into the Committee of Finance.