LEGISLATIVE ASSEMBLY OF MANITOBA Thursday, 20 May, 1982 Time - 2:00 p.m. OPENING PRAYER by Mr. Speaker. MR. SPEAKER, Hon. J. Walding: Pres enting Peti­ tions ... Reading and Receivi ng Petitions ... PRESENTING REPORTS BY STANDING AND SPECIAL COMMITTEES MR. SPEAKER: The Honour ab le Memb er for Spring field . MR. A. ANSTETT: Mr . Speaker , I beg leave to present the Third Repor t of the Standing Comm ittee on Pub lic Utilities and Natural Resou rces. MR. CLERK, Jack Reeves: Your Standing Comm ittee on Pub lic Utilities and Natu ral Resou rces beg leave to present the foll owing as their third report.

Your Comm ittee met on Tue sday, May 11, Thur s­ day, May 13 , Tue sd ay, May 18 and Thur sday, May 20, 1982, to consider the Ann ual Repor t of the Ma nitoba Hydro-Electric Board. Your Comm ittee received all information desi red by any member of the Commi ttee from Mr . S. Chern iack, Chairman of the Board; Mr. L.D. Blachford, President and Chief Executiv e Officer; and Mr. A.K. Mc Kean, Assistant Gener al Manager of Financ e with respect to all material pert aining to the Annu al Repor t and the busi ness of Manitoba Hydro.

The fu llest opp ortu nity was accorded to all mem bers of the Comm ittee to seek information desi red. Your Comm ittee exami ned the Ann ual Repor t of Manitoba Hydro for the fiscal year ending March 31 , 1981, and adopted the same as presented. MR. A. ANSTETT: Mr . Speaker , I move, seconded by the Honour able Memb er for Riel that the Repor t of the Commit tee be received. MOTION presented and carried. MR. SPEAKER: Min isterial Statements and Tabli ng of Repor ts . . Notices of Motion ... In troduction of Bil ls ... ORAL QUESTIONS MR. SPEAKER: The Honou rable Leader of the Opposition. HON. S. LYON: Mr.

Speaker, in the absence of the Mini ster of Labo ur , I direct my qu estion to the Fi rst Min ister reali zing, of cou rse, that labo ur relat ions and statute law affecting rail ways are of a federal natu re.

Notwithstand ing that fact, can the First Minis ter advise whether he or his governme nt have un dertaken inquir ­ ies with the Federal Min ister of Man power in order to amel iorate to whatever extent is possi ble the unf ortu­ nate annou ncement that was made yesterday by the CNR to the effect that some 1, 200 workers at CNR shops will be la id off for an extended holiday of six to eight weeks beyond the regul ar holiday period this sum mer? MR. SPEAKER: The Honour able First Min ister. HON. H. PAWLEY: Mr .

Speak er, we have a process that is esta blishe d to deal with matters such as that, and I kn ow the Mini ster of Labour will be here shor tly, and any fur ther detailed discus sion pertaining to that might be best to await his arriv al. HON. S. LYON: Mr.

Speaker , on that point, and per­ haps through the First Mini ster to give the Min ister of Labour notice of ii, in view of the fact of this unf ortu­ nate annou ncement yesterday by Canadian National Rail ways, coupled with the ann ounc eme nt of appr ox­ imately a week ago by the Canadian Pacific Rail way with an equa l numb er of people from the Weston Shop being laid off for an extended holiday this sum mer; in view of the fact that this now represents 2.400 ful l-t ime workers, who will be going on at least a six to eight week layoff, will the First Min ister give us the un der­ taking that he and his government will work in the closest co-operation with the federal authorities to do whatever is possi ble to amelior ate and to assist those men and those women who are fac ing this unf ortu­ nate and terribly disturbing layoff, which will be affect­ ing better than 2,400 Man itobans?

HON. H. PAWLEY: Mr. Speaker, I want to first apolog­ ize. Appar ently the Mini ster of Labour has gone to a plant opening so will not be.here dur ing the Que stion Period. Yes, Mr. Speak er, we have in place a process and the Leader of the Opp osition can certainly be ass ur ed that this govern ment will be doing all within its powers to co mmun icate concerns in respect to not only the layoff by CN yesterday, but in respect to the C.P . We had some initial discussion pertai ning to the C.

P. on Mo nday with the Mini ster responsible for Im migra­ tion, and certainly we will be carrying through with the expression of those concerns. MR. G. MERCIER: Mr . Speaker, in the absence of the Mi nister of Financ e, my qu estion is to the First Min is­ ter. In view of the resolution passed by City Coun cil last evening, req uesting the Prov incial Govern ment to exemp t the City of Winni peg from the payment of the payroll tax, Mr . Speaker. Could the Fi rst Min ister indi­ cate whether they will exceed to that request? HON. H. PAWLEY: Mr.

Sp eak er, the Min ister of Financ e dealt with matters pertaining to mu nicipali­ ties and school divisions, and the fact that the tax would not be effective 'till Jan uary 1 st. In the mean­ time mechanisms would be developed. Ther e is no change in that respect and the Minis ter of Fina nce is qu ite concerned about fulfil ling the un dertak ing which he gave Budget night. 2623 MR. SPEAKER: The Honou rabl e Mem ber for St. Norber t.

Thursday, 20 May, 1982 MR. G. MERCIER: Mr . Speaker, in view of the fact that the Min ister of Financ e has only indicated that there woul d be a refunding mechanism of the payroll tax to municip alities and school divisions , and in view of the fact that the city proper ly points out that they would have to incur adminis tration cost involved in collect­ ing, paying over and admin istrating payment of the tax, does not the First Minis ter think it worthwhile to consider the resolu tion from the City of Winn ipeg positively so that the unnecessary administrative costs that would be involved would be eli minated?

HON. H. PAWLEY: Mr. Speaker , we're not on the verge of making decisions based up on one aspect only of the conseq ue nces that might be involved re exemption. The entire qu estion has to be examined. The Minis ter of Finance has ind icated that, Mr. Speaker, and when he has ascertained what is the best approach in respect to the pu blic interest pert aining to the matter, he will be announcing that in due course. MR. G. MERCIER: Mr .

Speaker , does it make sense to the First Min ister, or is it in the pub lic interest for muni cipalities and school divisions to incur the admi­ nistrative costs that will be necessary to collect, pay and admin ister the payroll tax, rather than simp ly exempt them and avoid all of those un necessary adminis trative expenses? HON. H. PAWLEY: Mr .

Speaker, the hono u rable memb er, I am sure, is aware that there are many imp li­ cations in respect to potentially moving in one particu­ lar direction rather than in another direction; implica­ tions that might, indeed, affect the overall pu rpose in respect to the tax, that those implica tions have to be fully exami ned before one group out of a class would be exem pted and others not. MR. G. MERCIER: Mr .

Speaker, in the event then that the government deems it necessary not to exemp t muni cipalities and school divisi ons and other pub lic institutions that are pub li cly financed, woul d he und ertake to com pens ate them, not only for the pay­ roll tax that they pay to the Provincial Govern ment, but for the ad minis trative costs that they incur un necessarily. HON. H. PAWLEY: Mr. Speaker , again I think the Honour able Mem ber for St.

Norb ert is qu ite con­ scious of the fact that the Min ister of Financ e, on Budget night, dealt with the tax insofar as municip ali­ ties and school divisions were concerned; ind icated the tax would not be effective until Jan uary 1; indi­ cated that in the meantime the entire qu estion relat ing to the particular tax would be exa mined in order to ensu re that satisfactory arrangeme nts were un der ­ taken: would protect the pub lic interests and yet res pond to the real concerns that I am sur e muni cipal, school divisions and others have. So, Mr .

Speaker, there is little advantage in us enteri ng into a pieceme al discussion at this point when indeed it has been clearly ind icated that there will be cons ultat ion, there will be analysis and there will be an announcement in due cour se. MR. SPEAKER: The Honour able Memb er for Tuxedo. MR. G. FILMON: Thank you, Mr. Speaker, my qu es­ tion is for the Honour able Min ister of Education.

In view of the fact that all school divisions in the province have already established their bud gets for a planned program of opera tions for the forthcoming year and, as well, they have been given the comm itments for funding both by the Pr ovincia l Gov ernment announc ement and the mill rates for proper ty taxes that have been set, for what purp ose will the $1. 75 mil lion, which the Mini ster annou nced the other day, be used in the coming year? MR. SPEAKER: The Hono ur ab le Min ister of Education. HON. M. HEMPHILL: Mr.

Speaker, the $1. 75 million that was ann ou nced last week is for a program that was in the Estimates, was presented in the Estimates and in the Budge t. It is for a special program which is to supp ort small schools. The informa tion, since they usua lly like to avoid very long and extended answers, I imagine that the details of the prog ram will be dis­ cus sed in the remai ning time we have for Estimates review. MR. G. FILMON: Thank you, Mr . Speaker.

The point that I am trying to get at is that the divisions have already had to make their decisions as to whether or not to keep a school open and, pre sum ably, they've already made their decisions based on fu nding, pr o­ gramming and so on. So, therefore, how will this add to anything they've already been prepared to do? HON. M. HEMPHILL: Mr . Speaker, I think I've indi­ cated as clearly as I can in previous que stions and pub lic speeches that this program is not intended to stop school closures. It has nothing to do with school closures.

It is to redress an existi ng inequ ity in the existing Edu cational Su pport Program that says small schools that have small numb ers of students do not get the same kinds of resources, materials, pers onne l and teachers to do the job to help educate the children that the larg er schools do. It is to give them the same oppor tun ity, the same resources, the same equipm ent to give a qua lity educ ation to all of the children in Man itoba regardless of the size of the school they go to, Mr. Speaker. MR. SPEAKER: The Honou rable Memb er for Tuxedo. MR. G. FILMON: Mr .

Speaker , assu ming that there might be an inequ ity in the system that leads to those particular probl ems, how can this affect it in this year when the school divisions have already decide d what their program offerings will be, have already been given the announc em ent of how much money they can expect both from the province and through the mill rate? This will then jus t turn out to be mad money in the coming year because it can't be added to the program that they have already establi shed. 2624 MR. SPEAKER : The Honour ab le Min ister of Educ ation.

Thursday, 20 May, 1982 HON. M. HEMPHILL: Mr . Speaker , I supp ose I shoul d be pleased that the mem ber opposite has given me an oppor tu nity to say that I wish this program had been put in place in the existing Budg et or I wish it had been built into the Educational Su pport Program that they spent a couple of years develo ping and put into place for three years. It wasn't in there: the best we could do was pu t it in after we took office. If it had been put in last year's Bu dget, they could have developed their program for the full year.

It is qui te true that now when they receive the infor mation, they will be develop ing programs that will be put in place in Septe mber , but I have every confidence in their ability to: one, kn ow right now what the deficien cies and the problems are in their schools: and kn ow how, if the y were given additional supp ort, they are going to correct those problems. I am sur e, that come September , we are going to have increased resources, books, materials, equip ment, increased teachers and personnel to go into the schools and help do the job. MR. G. FILMON: Mr .

Spe aker, in view of the fact that the average teacher's salary in the province today is $30,000 and that the maxi mum that any one school could possi bly get from this program is $1 5,0 00, su rely the Min ister doesn't say that they are going to get addit ional staff, teachers, materials and all that for any school for the maxi mum of $1 5,0 00 that she has annou nced. HON. M. HEMPHILL: Mr . Speaker , what they are going to get in each school is an oppor tuni ty to have something that they don't have now that they need, that's No. 1: the other thing that they are going to get is whatever they need the most.

Now in some cases, that's going to be books. In some cases, they will not have what they believe to be an adequa te libr ary or adequate resources and that's what they will put their money into if that's where the greatest need is. In other cases, they may have specia l needs child­ ren, but they may not have enoug h of them to qua lify for a full- time cli nician or co-ordinator, special needs teacher, but they could get some help. They could hire an itiner ant teacher on part-time.

They could bring in teacher aides to give some supp ort to the teachers who are there, often teaching three or four grades without any help at all. So they will be able to get, while it might not be one or two or three add itional teachers, they will be able to make a decisio n to get additional personnel and additional teaching help into that sc hool division. INTRODUCTION OF GUESTS MR. SPEAKER: Before we reach Or ders of the Day, may I dir ect the attention of honour able mem bers to the gallery where we have 50 students of Gr ade 9 standing from the Jose ph Woli nsky Collegiate.

The students are under the direction of Miss Linda Connor and the school is in the constituenc y of the Honou r­ able Memb er for Seven Oaks, the Min ister of Consu­ mer and Corporate Affairs. There are also 28 students of Gr ade 5 standing of the Landma rk El em entary School un der the direction of Mr . Penner and the school is in the constituency of the Honou rable Member for Spring field. There are also 15 students of Gr ade 9 standin g from the R.B. Ru ssell Vocational School un der the direc­ tion of Miss Me dyn ski. This school is in the consti­ tuenc y of the Honour able Memb er for St. Joh ns.

On behalf of all the mem bers, I welcome you here this afternoon. ORDERS OF THE DAY BUDGET DEBATE MR. SPEAKER: On the proposed motion of the Hon­ oura ble Mini ster of Finance and the amendment pro­ posed thereto by the Honou rable Leader of the Opp o­ sition stand ing in the name of the Honou rable Min ister of Financ e. The Honour able Memb er for Pembi na. MR. D. ORCHARD: Thank you, Mr . Speaker. I wel­ come the oppor tuni ty to participate in the Thr one Spe ech Debate to sup port the amendment placed on the Throne Speech Debate by my Leader - or the Bu dget Debate, I'm sorry.

I'm only four months behind but that's because nothing has happene d in the interim. Now, Mr . Speaker, I want to speak in sup port of the amendment placed by my Leader for three prima ry reasons. First of all, this Bu dget has given to the Mani­ toba economy no direction that a new govern ment ought to give to the Man itoba econ omy in its first Bu dget presentation.

The second reason I am sup­ porting the amend ment is that this Budg et has intro­ du ced a new taxation regime to the Province of Mani­ toba, something unk nown in the last four years of govern ment and new in this govern ment's very first Bu dget, a new taxation regime. The third reason I want to speak in supp ort of the amendment by my Leader is that this Bu dget has un der stated the deficit that this province will incur in this fiscal year and it has not been honest with the people of Man itoba in terms of pres enting a deficit which is correct and factual. 2625 Now, Mr .

Speaker, my first objection to this Bu dget is that it deals with no new direction for a government to lay out to the people of Man itoba in the first of its four-year term. I want to point out some of the things that were mentioned in the press release so elo­ quen tly stated by the Min ister of Fina nce to the people of Man itoba via the news service. The first thing he mentioned is a $23-m illion Interest Relief Program. This, Mr . Speaker, was the emer ­ gency program pr omised by special Session if neces­ sary by the now Premier of this province.

Under this $23- mil lion Inter est Rate Relief Pr ogram, we kno w to date that all we have been able to identify is some $60,000 gone to sm all busine sses out of the $23 mil ­ lion. In other words, this major direction of the gov­ ernment is one that is first failing for this government. The new Job Creation Program is the second men­ tioned.

Well, if it were not for the criticism of mem bers on this side of the House dur ing qu estion perio d and dur ing the Mini ster of Labour's Estimates, the pro­ gram partic ularly for student em ploy ment would be woefully inadequate, and because of criticism, because of press ur e placed by the Opp osition, the Mini ster of Labour and Finance has seen fit to add some $4 mil­ lion to make that possibly a meani ngful program to the youth, to the students of Man itoba.

Thursday, 20 May, 1982 The other area mentioned by the Min ister of Finance, he men tions major increases in provincial assistance to the mun icipal governme nts and scho ol divisions. My colleague. the Memb er for St. Norbert, pointed out that in our fou r years of admin istration, the property taxes in Winnip eg School Divisi on No. 1 went up by some $70 or $80 in four years. In one year, carrying out these major increases in pr ovincial assistance to the muni cipalities, the school taxes, tax bil l in Win­ nipeg School Divisi on No. 1 has more than doubl ed .

The increase in one year that our govern ment saw fit to provide fundin gs so that the $70 to $80 was the increase in fou r years, they've doubled it in one year with this increase in provincial fundin g. The other major econom ic initiative is the extension of the Hydro rate freeze. That is our program, our administration's program.

They have establi shed a $1 7.5-mil lion Beef Stabili­ zation Program which I subm it, un less the Min ister of Agricul tur e backs off on the six years and the compul ­ sory marke ting aspect, they won't cash flow more than $1 00,000 of the $17 .5 million, so that is a useless promis e and a useless statement to the people of Man itoba. They are freezing the un iversity tuition fees, accord­ ing to the Min ister of Fina nce. They are and then they take it all back with a payroll tax at the Univ ersity of Manitoba - some treat to the stude nts of Mani toba, give on one hand and take away on the other.

They men tion the Winnip eg Core Area Agree ment as a major initiative. Once again, I point out that Core Area Agreement was signed and negotiated by the then Attorney- Gener al, the Member for St. Norbert, in our government. Their major economic initiatives, Mr . Speaker, are the Western Inter-tie. They have now changed it from the Power Gr id to the Western Inter-tie, a project that, Mr . Speaker, our govern ment in fou r years negotiated with Saskatchewan and Alberta.

They are talk ing about the start- up of the Lime stone Gener ating Sta­ tion on the basis of that Inter -tie, once again, a pro­ gram that we had, Mr . Speaker . They mention a major expansio n to the Man For com plex, a situa tion, a pro­ ject, Mr . Speaker, that our government was actively negotiating on behalf of the citizens of The Pas and the citizens of Manitoba. They ment ion a sme lter operation for al uminum. Once again, Mr. Speaker, that major economic devel­ opmen t thrust that they cl aim was our govern ment's initiative over the last three years of its term. They mention a potash development, Mr .

Speaker, as a major initiative. Once again, our govern ment was the one un der which potash companie s became inter­ ested in the deposit in Man itoba and determin ed its extent and its size and the economie s of producin g from it.

All those major econom ic initiatives that a new gov­ ernment shoul d be laying out are the very econom ic initiatives that those people, those 34 memb ers that are sitting in the government right now, used against our adminis tration by distortions dur ing the election camp aign, by outright un truths in pres enting to their constituents the possibilities of the alu minum sm elter, etc., etc. They won the elect ion. They defeated us on those projects and they have the audacity, Mr.

Speaker, to bring them in as the centre pieces of their economic 2626 develop ment and print it in this news release and in the Budg et Debate. They men tion a stepp ed-up construction program in health care facilities. Once again, our Min ister of Health had initiated those construction programs in the majority. They men tion a $50 million - this is the only new one - Manitoba Housing and Ren ewal Cor­ poration fund ing. Mr. Speaker , I have mentioned this several occasions before and I mention it again for those new memb ers in the back bench.

In 19 78, I had the oppor tuni ty to go to The Pas, Man itoba where I saw 48 single fam ily houses bu ilt by the Man itoba Housing and Rene wal Corporation ready for occu pancy and there was nobody available to live in them. Is that where the $50 million is once again going to go, to bu ild houses in constituenc ies in jeo­ pardy that are held by New Demo crat mem bers of the govern ment in order to prop up the local economy and win a seat?

Is that what they are going to do with that $50 mil lion, the repeat of what they did dur ing the Sch reyer years, 48 single fam ily dwelli ng houses on Bell Avenue in The Pas uno ccu pied for over a year, compli ments of the Schreyer admin istration, in trying to prop up the Man itoba economy but more impor­ tantly, Mr. Speaker, trying to save an elected mem ber's seat and that is all? Well, that's some economic initiative, Mr . Speaker. They men tion $5-million construction on the Law Cou rts Bui ld ing and once again, Mr .

Speaker, that was initiated by the Mini ster of Government Services and the Attorney- Gener al in our administration. There we have it, Mr . Speaker. They men tion all of these econom ic initiatives and every single one of them, but one, are the initiatives started and well under way dur ing our govern ment. Now, is that the new direction that we can expect from the Man itoba New Demo cratic Gove rnme nt? Is it the ND Party's econom ic thrust to carry on the economic develop­ ment pr ojects that we had initiated, that they defeated us in the election on through their distortions and mistruths?

Well, that is some sh allow sham to pr esent to the people of Man itoba in the fir st Bu dget, to tell Man itobans the econ omic direction of this govern­ ment. They should be truly ashamed, Mr. Speaker . Mr. Spe aker, I want to take an oppor tun ity to quo te from pages 1 and 2 of the Budg et Addr ess and this is a qu ote from Mr . Schroeder's Address. He says, "T his Bu dget has two main goals: First - to help sus tain and strengthen our economy, " and the second part, "to un derpin our econom ic fou ndations." That is what the Min ister of Finance said in his Bu dget Addr ess.

Then he went on to say on page 2, Mr. Spe aker, that, "Thousands of Manitobans offered their views and sug gestions about this Bu dget, individ ually or through their organizations." Mr . Speaker , I noted in the Thr one Speech Debate that all the brig ht-eyed backbenc hers in the ND Party said they had a great deal of input into the develop­ ment of the Thr one Speech which was a shame . I haven't heard any of them clai ming credit for having input into this Bu dget Debate so far. You kno w why, Mr .

Speaker, because they are every bit as ashamed of that Bu dget as we are on this side of the Hous e and as Man itobans are. The backben chers won't cl aim credit for the payroll tax and the other onerous parts of that Bu dget. But the

.. Thursday, 20 May, 1982 cons ulta tion that the Mini ster of Finance says that he un dertook, I find very intriguing because you kn ow, Mr. Speake r, there is one indus try in the Prov ince of Man itoba that is a major ind ustry. It is a major employer. It has put Winn ipeg on the map. It has put Manit oba on the map, this ind ustry. That ind ustry, Mr. Speaker, is the trucking indus try. The truck ing ind us­ try in Winnip eg has a great num ber of head offices. It has companie s that have grown in Man itoba and expanded from this prov ince to have Trans Canada trucking services.

Now when the Min ister of Finance says he consul ted with many people about this Budget, I can assure you, Mr. Speaker, he never spoke to one individua l in the truckin g indus try, to get his views on three levels of taxation that he has imposed on that home grown and very important industry that em ploys over 12 ,000 Man itobans, that the Min ister of Finance has seen significant enough importance from that ind ustry to include it on page 19 of the

summary by showing that transpo rtation equi pment represents 7.8 percent of the Man itoba shipm ents, exports and man ufacturing. It's important enough to talk about it there, but it wasn't an important enough indus try to cons ult abou t in this Budg et. They proceeded, Mr. Speaker, to add a 1. 5 percent payroll tax to every single em ployee in the tr uckin g ind ustry. Do you know what that will do to the tru cking indus try in Manitoba, Mr. Speaker? It will add 1 percent to the general tariff of freights that the ind ustry in Manitoba must charge to reco up their costs. They have taken, Mr.

Spe aker, without cons ultation with that ind ustry, and they have raised the diesel fuel tax. As a matter of fact, Mr. Speaker, the diesel fuel tax, according to the Estimates, will increase by 47 per­ cent, the revenue s from diesel fuel taxation in Mani­ toba. Do you kn ow what indus try will pay the most of that 47 percent tax increase? The trucking ind ustry will pay it. Did they cons ult with the trucking indus try to find out what that would do to their indus try in Manitoba, an indus try that has provided jobs for over 12 ,000 Man itobans? No, no cons ultation.

Do you kn ow what it will do to the tru cking rates, the freight rates in Manit oba, Mr. Spea ker? It will add at least another 1 percent. The cum ulative effect of the payroll tax, and the diesel fuel tax on the trucking industry in Man itoba will add between 2.2 and 2.5 percent to the freight rates structure in Man itoba needed by the tr uckin g indus try just to pass those extra costs through. Where will those two costs show up, Mr. Spe aker? They will show up on the food tables of every Man ito­ ban, the cloth ing tables of every Manitob an, the farm indus try will bear those. That, Mr.

Speaker, is why we say this government has brought in a hidden sales tax, because that tax on one ind ustry may raise the cost by as much as 2.5 percent on freight rates. Practically every com mod ity going to the communi ties of rural Man itoba, and moving within the City of Winni peg, moves by truck and will be effected by those increased freight rates. The third way that this govern ment has chosen to tax the trucking indus try in Man itoba, Without cons ul­ tation,. is through the surtax on higher income s. I'm not tal king about the higher incomes of the executive in the truckin g indus try.

I' m talking about incomes of profes sional drivers. The truck drivers who have established a good enoug h safety record and effi­ ciency record to have thems elves, through hard work and initiative, into that tax bracket. This government has saw fit to tax their productivity even more. Free taxes on one indus try, home grown in Mani toba, headq uartered in Winn ipeg, and em pl oying 12 ,000 Manit obans. Thanks an awful lot for your care, con­ cern and consul tation with that indus try, Mr. Min ister of Financ e and your ND colleagues!

That's the kind of concern and cons ultat ion you un dertook with that indus try and you have no idea today of what the impli­ cations will be on Man itobans of that indus try; what implica tions tha t tax, payroll tax and the fuel tax, will have on the com petitive position of the Man itoba truckin g indus try in its role of conti nuing to be head­ qu artered in Winnip eg? How many more taxes does it take on that ind ustry before they elect to move head office func tions from Winnip eg to Saskatchewan, and Saskatoon, or Regina, or Ed monton, or Calgary?

I sug gest maybe not too many more, but that was never consi dered in this govern ment 's drive and desire to bring Man itobans into a new taxation regi me, a new taxation regime, Mr. Speake r, that is hidden from Man­ itobans in that it is a hidden tax, one that they hope Man itobans will forget.

When the price of food goes up because the tru ck­ ing industry req uires more mone y to cover their freight costs, because of payroll tax and diesel fuel tax increase, when the price of food goes up this ND Govern ment is hoping that Man itobans blame it on the retailer, and blame it on the farmers, and forget about their role in raising the price of food in Mani­ toba, and their role in raising the price of other com­ modities that prev iously were never taxed by a retail sales tax, and are now being directly taxed by this payroll tax and diesel fue l tax - a hidden tax paid by all Man itobans as consum ers, a sham, Mr.

Speaker, and done without consul tation. Now, Mr. Speaker, I want to deal with a cou ple of other areas which will be, I'm su re, news to some of the rural mem bers in that Caucus. I want to talk about how this govern ment has treated the farm com muni ty of Man itoba in this Bu dget; what kind of a steam they have shown to the farm com muni ty in this Bu dget; what kind of help they have offered to the farm com­ muni ty in this Budg et. Mr.

Speaker, the trucking indus try was unf airly picked up on in this Bu dget through diesel fuel taxation, income sur tax, and the payroll tax, but the trucking ind ustry, at least, has some abil ity to pass those additiona l costs on to the consume r. But the farm communi ty, which this group over here claimed to have some un derst anding of, has no ab ility to pass any of those increased taxation measures through to the people who buy their com­ modities, their grains and their livestock products, no capacity whatsoever. How will these taxes affect the farm com muni ty?

Well, first of all, any farmer who empl oys hired help in un derta king his farm prod uction mu st pay the payroll tax, a dir ect cost to him. I sug gest that the price of a pig won't go up by enough to cover his payroll tax de duc tion. I su ggest that the price of a bus hel of wheat, or rapeseed, or corn won't go up by enoug h to pay his payroll tax, not at all, and the Min ister of Municip al Affairs recognizes that. He kno ws the farmer can't pass those additional costs through to 2627

Thursday, 20 May, 1982 the marke tplace; he knows that, but nobody else on that side of the Hous e kno ws that - another area, Mr . Speaker , that this government has chosen to tax the farm commun ity. Many people in the farm commu nity, through a change in federal taxation laws, as of about a year ago - as a matter of fact, I believe it was in the last Budg et - they allowed farmers, as fam ily farms nonin corpo- rated, to pay their wives a salary and have it as an income expens e and that had a great deal of benefit for the family farm wives throughout Man itoba. It gave them income.

It gave them futur e pensio n benefits. It recogn ized their contribu tion to the farm indu stry in the farm com muni ty. Now this governme nt is taxing that by the payroll tax. They are taxing the wages paid to the wives in the farm com mu nity. Now, if we were govern ment and we did that, that Opp osition, that N.D . Party would say that we were crue l to the fairer sex, to the women of this province by imposing a tax on them. They would say we were heartless, that we were male chauvin ists, but them and their feminists can lolly pop along, bring that on with no care , no regard whatsoever.

That is a pr ovision that many fam­ ily farms are now taking advant age of with the change in the Feder al Bu dget, the last Federal Bu dget and they are now taxing wages paid to farm wives. Well, they can't - as I said -t he farmer s can't pass this through. Now diesel fuel tax, a pu rple diesel fuel, by and large, is exempt from tax -( lnterjection)­ well, we will find that out. I am not certain of that; we will find that out. But more and more of the farm communi ty, Mr. Speaker, are rel ying on the com mer­ cial trucking industry to carry their grain and their livestock to market.

They are also depending on the com mercial tru ckin g ind ustry to bring in 90 percent, at least, of the supp lies that come into rur al Manitoba from fertilizer, chemical, machinery, seed grains and all those commodities that come in to the rur al com­ muni ty. -( Interject ion)- Well, the Memb er for Wol­ seley is bab bli ng about her ignorance of the farm communi ty. She jus t does not know what the farm communi ty does nowadays. If she wants to speak about day care, I'll listen, but not about farm ing because she kn ows not of it. Mr. Speaker , 90 percent of the goods consumed by farmers move in by truck.

The freight rate increase imposed by the payroll tax on the truck ing ind ustry and the diesel fuel tax on the trucking indus try will raise freight rates on most com modities that the farmer s buy in the farm com mu nity and on a lot of commodities they ship from the farm com mu nity, their livestock, their grain, because they use the comm ercial trucking system. Now, once again, I ask the Min ister of Municip al Affairs: can farmers deduct the extra freight rate on the price of a tractor trucked into his farm from the selli ng price of that tractor because of the payroll tax and the diesel fuel tax?

No, he pays the cost of freight of lan ding his inpu ts on the farm. So the farmer takes it in the neck twice - on goods coming in, on goods going out. He takes it in the neck with freight both ways, and this governme nt has significantly increased freight rates to the farm communi ty - 2.5 percent in one fell swoop - and to an in dustry that has no abil ity to pass those costs on to the consumer and no nego­ tiating power to reduce those freight rates on the goods they purcha se that are trucked into the commu nity.

Well, you kno w, I realize there is a lack of und er­ standing over there in the governme nt as to how this impacts on the farm communi ty, but don't ever again stand up and wring your hands about how you care about the farm commu nity and how you're going to help the farm communi ty after imposing those kinds of new tax structu res that will come directly out of the farmer's pocket. -( Interjec tion)- The Memb er for Spr ingfield says, "That's claptr ap," and he represents a farm com muni ty. Well, he won't represent a farm commu nity very long un less he gets a better und er­ standing of it. Bu t, Mr.

Speaker, of even more signific ant impor­ tance to the farm com muni ty is the impact of the payroll tax on all of the em ploy ment in the service ind ustries providing goods and services to the farm commun ity, because every single one of those indu s­ tries will have to pay the payroll tax of 1. 5 percent.

Let's just list some of those ind ustries: the grain com­ panies will all be paying 1. 5 percent payroll tax on every single em ployee in Man itoba in the grain indus ­ try; the machiner y retailers will pay that payroll tax; machiner y manufacturers will pay the payroll tax; fer­ tilizer and chemic al retailers will pay that empl oyee tax; the fertilizer manuf acturers in the province will pay that payroll tax; the oilseed crushing industry, of significant importance to this Province of Man itoba, will pay the government on the basis of the payroll tax; the mer chants in every single rur al commu nity servic­ ing the farm communi ty will pay that payroll tax; the meat packing industry in Winnip eg will pay that pay­ roll tax on their em ployees salaries; the tru cking ind ustry, as I have already mentioned; the financia l institutions servicing the farm communi ty will pay that.

And these people operate, these New Demo ­ cratic Party people livi ng in the dream world that they live in, Mr. Speaker, are naive enough to believe that farmer s can pass those additio nal taxes on, those additional costs on. 2628 Well, I want to ask the Min ister of Mun icipal Affairs, who has some sem blance of und erst anding of the rur al Manitoba comm unity: will the grain companies reduce their handl ing charges in the elevators of Man itoba as a result of this payroll tax or will they increase them? Well, they'll increase them. And who will pay it? The farmers of Man itoba will pay it, Mr. Speaker.

I ask that same memb er: do you think that the fertilizer dealers, the machi nery dealers, will red uce the price of their fertilizer and their chemic als and their machinery sold to farmers by the 1. 5 percent payroll tax and give the farmers a better deal? No, Mr . Speaker. They don't have those kind s of profits. They will pass that cost on through the cost of machinery, chemicals and fertiliz ers bought by the farm commu n­ ity. The farmer will pay it; his costs will go up . What about the machiner y ind ustry in this province, the man ufacturing ind ustry?

Did this govern ment and did the Min ister of Co-operative Develop ment con­ sider the impact of the payroll tax on Co-op Im ple­ ments and their com petive position in selli ng a deep tiller buil t in Man itoba, in Saska tchewan, and com pet­ ing against the Morris Rodweeder Company which doesn't have a payroll tax or the Friggstad Man ufac­ turing Company in Saskat .chewan with no payroll tax? ..

Thursday, 20 May, 1982 No, they didn't, and it will raise the cost of Co-op Im pl emen ts' equip ment in Man itoba and pu t them at a competitive disadvant age in the market outside of the Province of Man itoba. Some help to the workers of Co-op Implements, and the same applies, Mr . Speaker, to Versatile. Can Versatile com pete with John Deer e, Case, Massey-Ferguson, Allis-Chalmers iii the States, Saska tchewan, Alberta, when they have to factor in the payroll tax on a Versatile four-wheel dr ive tractor man ufact ur ed in this province?

Can they add that to the price in that competitive machinery marke t and expect to get it back? No. The company will eat that tax and if they don't add the profits to absorb it, it will help to exasperate their fina ncial situation and poten­ tially put them out of busi ness. They don't under stand that, Mr . Speaker . That is the whole frustra ting and discouragi ng part of this party. They don't un derstand what they did. They don't un derstand that they increased the costs to Manitobans.

They don't un de rsta nd that they par ticul arly increased all the costs to the farm com mu nity, the farm com mun ity that they want to pr otect and make sur e the famil y farms exist. Ther e has never been a greater regime of taxation placed on the farm com­ muni ty than has been with this payroll tax because there is no way that the farm comm uni ty escapes it and there is no way that the farm com muni ty passes it on. If the farm communi ty pays the payroll tax on a ton of fertilizer, through the diesel fuel tax to deliver it, through the payroll tax to manufacture it, their costs go up.

Do they get more for their wheat, their rapeseed or their corn because of that? No, they don't. They absorb that. They take it as a loss. They take it in the chin, Mr. Speaker, and that is what this govern ment has chosen to do to the farm ind ustry of Man itoba. Now, let's talk about the oilseed crushing ind ustry for one moment . Our government, Mr. Speaker , assured that Man itoba, at Harr owby, had a second oilseed crushing plant in the Province of Man itoba; our govern ment did that.

Now, this governm ent comes along and puts a payroll tax on them and make s them less efficient in their crushing operations compared to the ones in Ni pawin, Saskatc hewan; Lloyd mins ter; Lethbri dge; Saskatoon and the Peace River. On ce again, the Member for Spring field doesn't believe this. He is so naive, he cannot see what this governm ent has done to the oilseed crushing ind ustry in Manitoba, and that's what we say. This govern ment did not kn ow what the implications of that tax were. Now, in the crushing plant at Altona, they do two things in Alton a.

They employ a lot of people that they pay the payroll tax on, but the second thing they do is they offer a trucking service to their customers where I, at Miami, Man itoba, can order up a CSP truck from Altona, it will come and it will pick up my rapeseed at a very nom inal, if no charge. Now, with the diesel fuel taxation that this gang has put on, they are not going to be able to do that at as economi cal a cost. And will they offer me more for my rapeseed because of that as a farmer ? No, they will offer me less because their costs are going up .

Now, isn't this a wonderful con­ cerning govern ment for the farmers of Man itoba? They have passed on layer up on layer up on layer of taxatio·n to every single service ind ustry that pays payroll tax, diesel fuel tax and imposed it on the backs of farmers that can't pass it on. Thank you very much, ladies and gentlemen of the ND Party. Thanks an awful lot. Mr. Speaker , when the meat packin g ind ustry in Winnip eg has to pay payroll tax to their em ployees on the kil ling floors and in the packin g lines in either the pork or the beef or the poultry killing line s, are they going to absorb that?

Well, we kn ow the packing indu stry hasn't got profits to absorb it themselves. Ar e they going to dep rive it from their empl oyees in wages? Possibly. We don't know that whether the next settlement is going to be lower, cut the workers' salar­ ies to recover the 1. 5 percent tax or, realistica lly, will they reduce the price of the pig and the steer that comes from a farmer in Man itoba by the 1. 5 percent tax? Will they do that? Well, I sug gest they will, Mr. Speaker. MR. SPEAKER: Order please.

I find that the use of the word "gang" by the honou rable member in referri ng to the governme nt is un der that list of words that Beauchesne says is unp arliamentary. I bring that information to the Honou rable Memb er for Pembina and sug gest he take the appropr iate action. MR. ORCHARD: Mr . Speaker, I apologize. I know that you have dr awn that to my attention once before and in my exu berance, it slipped and I apologize to all mem bers of the referred to "gang" over there. I did not mean to refer to you as that. Mr .

Speaker , the meat packin g indus try, they've got three options to them: they pass the payroll tax on to the consume r; they take it off the wages of the em ployees; or they reduce the pu rchase price of hogs and cattle in the Province of Man itoba. You kn ow where I sug gest it's going to come from ? I don't think the consumer s are going to pay for it. I don't think the empl oyees with a un ion contract are going to pay for it, but I do su ggest to mem bers in the ND Party that farmers will pay for it. They will pay for it because the bid price of their cattle and their hogs will go down.

Once again, think of what you people have done to the farm communi ty at a time when the farm commun ­ ity can ill afford additional layers of taxation, but they don't under stand. -( Interjection )- I submi t and I agree with my colle ague, the MLA for Lakeside, they just pl ain don't care. They never have cared about the farm economy. It's evidence d by the Min ister of Agri­ cu lture now bringing out a Beef Income Program that is a recycli ng of the one his coll eague, the ML A for Lac Du Bonnet, brought out in 1977. They don't care about the farm ing commun ity. 2629 So, Mr .

Speaker, I jus t want to once again condemn this new govern ment for coming up with a Bu dget in their first year that doesn't tell Man itobans one iota of the direction they wish to proceed and the vision they have for the Man itoba economy over the next fou r years, no new direction in this Budg et. It is a repeat of the nothingness that this govern ment has demon­ strated pr ior to this Session in all their pron oun ce­ ments in pub lic. It is a continua tion of the nothingness that we saw from this government in the Thr one Sp eech.

It is a continua tion of the nothingness that this government has come up with in a beef progr am, interest rate relief and the other prom ised progra ms. We could not expect this governme nt to come up with anything better in this Bu dget than another nothing-

Thursday, 20 May, 1982 ness statement for Manit obans, nothingness. They will do nothing for the Province of Man itoba, except drag out and hope for com pletion of some of the projects that we initiated while we were go vernm ent and then they will try to take credit for it. Yes, indeed they will. So, Mr . Speaker , I condemn this new govern ment.

I condemn you for not having the intelligence and secondly, the ab ility, and that is what is more frighten­ ing, in not having the abil ity in your governm ent to come up with any new ideas, any new dir ection, any new innovative appr oaches to the Manitoba economy other than, Mr . Speaker , borro wing a tax from the Province of Queb ec and putti ng a payroll tax on all Man itobans. A very, very, very good test that the Mani­ toba people will respond to in this first Bu dget. a shallow and deceitful document in this Bu dget, Mr.

Speaker. a shallow and deceitful treatment of the people of Manitoba, one that the people of Man itoba will remember over the next three years in watching this government and one that they will recall fon dl y every time they fill out their em plo yment slips and pay this govern ment the payroll tax. They will remem ber and they will not supp ort this government the next time they come to the election with no direction such as they are repr esenting , no new ideas and no abil ity to deal with the economy of Man itoba. MR. SPEAKER: Order please.

The Honour able Mini s­ ter of Municip al Affairs on a point of order. HON. A. ADAM: On a point of order. the honou rable mem ber has a habit of using unp arlia mentary words whene ver he rises to speak and he has just used one, "d eceiving " the people of Man itoba. He shouldn't use that word, Mr. Speaker. MR. SPEAKER: Or der please, order please. Or der please.

For the information of the honou rable memb er who raised the point and the honourable memb er who used a word sim ilar to "deceive," I can advise mem bers that the word "deceive" is in the list of unp arli amen ­ tary words and it is also in a list of words not ruled to be un parl iamen tary. So it would seem the word is both allowed and proh ibited. It's up to the House which way they want it to be handled - in the meanti me, the Honour able Memb er for Pembi na. MR. D. ORCHARD: Mr. Speaker, maybe the Op posi­ tion might let me start again. Thank you . Mr.

Speaker, maybe the use of deceitful is not parli­ amentary in the context I use it, but I have checke d Beau chesne and I tried to stay within what was accepted parliamentary langu age and possi bly I might ind icate a direct quo te from some constituents of mine who consider this and they have said to me that this Bu dget is, indeed, a very shallow and deceitful docu ment. They are not proud of this governme nt and they are not confiden t that this govern ment can offer anything of value to Manitoba except a larger deficit, more taxation and no new approach to the Man itoba economy. Thank you , Mr . Speaker. MR.

SPEAKER: The Honou rable Mem ber for Bu rrows. MR. C. SANTOS: Thank you , Mr. Speaker. The refer­ ence of the Memb er for Pembina to the word "chauvi­ nism" reminds me of some kind of taxation system in an African country called Swaziland. In Swaziland, if you're a male and marr ied, or if you are married but you limit you rself to one wife, you pay a tax of $4.40 per annum. But if you should decide to take an addi­ tional wife, you can take as many as you can provided you can supp ort them, there is a ceili ng, though, of $1 2.90.

So you pay an addi tional tax of $4.20 per wife that you take, but after you reach the ceili ng of $1 2.90, any additional wife will come tax free. Mr . Spe aker, I kn ow of only one way by which we can raise taxes and still benefit the taxpayer. The only way I can think about of raising money is to tax every un parliamentary word that is uttered in this Chamb er. MR. SPEAKER: Or der please. MR. C.

SANTOS: Certainly, it will increase the defer­ ence and respect of the people of Man itoba who are, I would say, disapp ointed at the perfor mance of some of our mem bers in this hallowed hall of this Legislative Assem bly. All I'm echoing, Mr. Spe aker. is my senti­ ment as an adher ent lover of our parliame ntary institutions. In supp ort of the first Budg et of the New Democratic Party Govern ment of the Province of Manitoba, I would like to confine my remarks into three interre­ lated points.

On e, I like to try to explain in a systematic way how come that we have big government in our comtem porary society intruding into the economy, into the everyday activity and lives of the citizens of the commun ity. Second, I would like to look into the expenditur e side of the Bu dget, find and identify some rational criteria in trying to evaluate whether this Budg et is a good or a rational Budg et.

Finally, I'd like to go into the expenditur e side of the Budg et and look at the item of prioritie s of the specific budg etary allo­ cations in order to learn more about the political objectives and corn mitments of the govern ment that is now in control of the Province of Man itoba, the New Democratic Party in charge of the governme ntal machinery of this province.

If we try to identify the causes of big govern ment and the increase in govern mental activity, we can see that the first thing that we notice is there is an increas­ ing general level of a rising standard of livi ng among all the people in all the western world and because of that they have a gene rally rising level of expectation about the kind of services that they are entitled to.

The people always look up on the government to provide for all these services, so we are expecti ng good and better schools, good and better hospitals, research facilities, health and sanitary insp ections, all of the things that we need in order to continue to maintain our generally higher level of standard of living . 2630 The second cause of big governme nt is, of course, the emergence of interest groups pur suin g their own particularistic interest and so we have labour pur su­ ing the interests of labour as against management: so we have the agricultural sector as against the indus ­ trial sector in this society; we have the cons umer groups as against the producers group.

In all of these conflicts of interest in our society, somebody has to come and mediate and resolve this conflict in a peace-

Thursday, 20 May, 1982 ful and order ly way, and the only institution in our society that is capab le of doing that is the govern­ ment. So, the seco nd cause or price of big govern­ ment is our demand that the govern ment resolve our conflicts of interest in our society among indi viduals and among groups. As a res ul t of this inc reasing urb anization and indus trialization in our society, there are of cour se certain dislocatio ns that are taking place and the indi­ vidual feels insec ur e sociologically and economically.

So, we have witnessed what the sociologists are cal­ ling alienation or ano mie and there are also certain economi c dislocations such as depr essions that we are suffering through at the present time. The farmer s, for exam ple, would like some kind of a secu rity and so they demand crop insu rance. The workers woul d also like some kind of an economi c secu rity and they demand Workers Compe nsation, a minim um wage law.

The lenders of money demand some kind of secu rity and so they demand mortgage insu rance to protect them from all this risk of unc er­ tainty in our terrible society and in our terr ible envir­ onment. They call up on the govern ment to perform all these func tions. Now, in view of the fact that the higher standard of living, the conf lict of inter est in our society and our desire to shift the risk to the govern ment, how can the govern ment meet all these func tions, all these activi­ ties? Ob viously, the govern ment needs resources. Obv iousl y, the govern ment needs money.

How can the govern ment raise money? How can the govern­ ment raise the necessary funds in order to carry on the activities that are imposed on the lap of governme nt. Ther e are three ways by which the govern ment can raise the necessary pu blic fu nds; by printing money or in some other way, directly creating money if it is within the ju risdiction of the particular level of govern ment; by borrowing and thirdly; by raising taxes or imposing new taxes. Let us look at each of these individual ways of rais­ ing pu blic fund s.

If the governme nt shoul d decide to do it the sim ple way and sim ply print money, what will happen? Ther e will be more dollars, you can imagine, more dollar bills chasing a few hot dogs in the su per­ marke t and you'll need a bagful of money to buy a loaf of bread. That is what is kn own as too mu ch money chasing too few goods and it is kn own and called by economists as the demand pool inflation.

Shoul d the government decide to raise pu blic funds by means of borrowing, the resultant effect would be that ther e will be an incr ease in inte rest rates for the lenders, and when interest rates inc rease and some of the bu siness men can not repay their demand loan, what woul d they do? They will cut down prod uction and when they do cuts on some prod uction, what will they do? They will lay off some people and unem­ ploy ment will increase. If the govern me nt shoul d decide to follow the third method and use the power of taxation in order to raise public funds, what will happen?

Ther e will be a gen­ eral inc rease in the pri ce level of wages and salaries because those people with bargaining political power will fight the tax increase and see to it that they main­ tain their after tax level of income, but those who have less bargaining power in our society will just have to take the bargain. So, la bour will demand higher salary 2631 levels and will get it because it has bargaining power, but the un organized segm ent of our society canno t and it will suffer and there will be un em ploy ment in the segm ent of society who are less capa ble of pr otecting thems elves.

So, whatever method the government uses, there will be some effect in the economi c system. Ther e will be gene rally higher levels of prices and un em ploy­ ment and especi ally the produ ctive capacity of the cou ntry is not increasing as well as the supp ly of money, then there will be dislocations and depr es­ sions in our economi c system.

The only way we can offset somehow the effect of inflat ion, whether it is the demand pool or sell or push type of inflation - by the way, sell or push type of inflation is the type where the em ployer will simply inc rease the price of his product because he has to pay a large amount of la bour costs, not because it is justified by the inc rease in demand from the consumer group s. That is another type of inflation and it will lead to what economists are calling now as instagn ation. a stagnant economy and at the same time a rising level of unem ployment.

This is the situation now in our society and our economi c syste m. and because these governme ntal services. these governmen tal func tions are essential, they have to be done, they have to be perfor med, but resources have to be obtained somewher e and this reminds me of what David Colbert said about taxation power. He said, "The art of taxing is similar to the art of plucking feathers from a live goose.

You have to kn ow the technique to be able to obtain the greatest amount of feathers with the least amoun t of squa wks." Certainly, each affected group will try to protect itself and the politic ians are astute enough. They know which group in society their suppor t, their polit­ ical career, de pends on and they will try to pr otect the interests of these groups because if they squa wk, the politician will get the flack. So, he will try to do his best that those who squa wk the most in society are those who are taxed the least.

Therefore, any reve nue side of the Budg et mu st satisfy certain rational objective criteria or otherwise there will be ineq ualities and ineq uities in our society. What are these objective criteria of a good taxation system? The first and primary criteria is tax equity. Tax equi ty means a fair deal to the taxpayer on the part of the taxing govern ment. It has two aspects, what are known as horizontal tax equi ty, which means that those similarly situated in the same economic circu mstances should share the same tax bur dens.

The econo mic circumstances are defined as belong ­ ing to the same group with a certain level of income which include rents. interests, ann uities and other sour ces of income, the same group having the same amount of proper ty, the same group having the same certain spec ified family size or the same group belonging to a sp ecific age category. As long as they belong to the same category or the same classifica­ tion, the y should be taxed with the same rate. That will satisfy horizontal equi ty in taxation.

A com pl eme ntary principle is what is kn own as ver­ tical equi ty in taxation. which means every individual, differen tly situated in diffe rent economi c circums tan­ ces, shoul d proportionately receive differen tial tax treatme nt. This is jus t the other side of the coin. If you don't belong to the same tax category, then you

Thursday, 20 May, 1982 should be taxed in a different way. This princip le of equit y is based. of course, on the Latin maxim which says, "All those who share in the benefit should share in the burden." - "Cujus est com modium ejus est onus." Whoever shares in the benefits of civilization shoul d also equ itably share in the bu rden of taxation because taxation is the price we pay for our civilized existence. Listen, gentlemen. I would like now to go into the expen ditur e side of the Bu dget. The expenditur e side of the Bu dget will reveal the priorities of the govern­ ment in power.

If you look at the bu dgetary item in the expe nditur e side of the Budg et, it will reveal to you the political objectives of the governmen t and the und er­ ly ing philosophy of any party that is in control of the govern mental machinery. Now, let us look at the expenditure side of the Schr oeder Bu dget, which I think is very well con­ ceived. The first item of pr iority on the expenditur e side of the Bu dget is the field of health. Thirty-two percent of the total expenditur e for the fiscal year 1982-83 goes to the field of health.

This means that the New Demo cratic Party Govern ment of Ma nitoba has placed the highest prio rity, the highest em phasis on the health of Man itobans, on the health of its own people. Health is next to life. Witho ut health, your life may just be a vegetable kind of existence. You may possess all the material goods in the world. You may possess all the piles of money in the bank but if you have ulcers or other kinds of sick ness and you are confined in bed, are you truly rich? Of course not. The truly wealthy man is the healthy man because he has the power to enjoy the bl essi ngs of this world.

The second pr iority in the exp enditur e item of the govern me nt is Ed ucation. 20 percent of the total exp enditur e budg et of the govern ment goes to the field of Ed ucation. The great phil osop her Dionysius said, "The ed ucation of the youth is the solid founda­ tion of this state." We are investing in the future of our childr en and in the futur e of our countr y when we put pr iority to the field of Ed ucation. If edu cation is the search for the truth and if truth can make men truly free, then edu cation is the key to true huma n free dom. Let me tell you why.

If you are an educated person, if you are an educ ated individual, nobody can steal that from you. Nobody can steal your educa tion. You r money can be stolen, your property can be sub ject to foreclosures. bu t your knowledge and your edu cation stays with you as long as you're alive and your edu ca­ tion will give you certain skil ls. No matter what changes there are in the envir onmen tal conditions, in the unc ertainty of the economy, you are able to adopt and adjust you rself to the changing situation of your existence.

Therefore, educ ation gives us some kind of freedom from hu nger. from economic want, as well as freedom from the un certainties of life. That's why education is important and we have placed, accord­ ingly, the proper empha sis on the field of Ed ucation in our expenditur e budget. The third item of expenditur e in the Bu dget of this present government is devoted to the field of Eco­ nom ic and Resource Devel opment and Highways. Now. this is investing in futur e econom ic develop­ ment, in futur e indus trial progress.

If we have to develop this province, this country, we have to develop the pr oductive capacities. Alberta and Saskatchewan 2632 may have their Heri tage Fu nds. They have their money; we don't. But we have the best heritage of all -t he national patrim ony of this province. What I have in mind is our resources in terms of the hyd ro-ele ctric power.

As long as the snow is falling and it is melting, as long as our river s are runnin g and as long as our genera ting stations are opera ting, we shall always have in perpetu ity the source of ener gy that annua lly renews itself continua lly and will never be exha usted because it is rene wable and nonexhaus tible. That is why, as a matter of princip le, we as a party su bjected to selling this national patri mony to some foreign cor­ porations.

This party thought that there would be a few jobs that in the short run would be good, but in the long run, will truly be a disservice to the people of this province and for the generations to come. Mr . Speaker, there is an honest difference of opin ions among rea­ sonable men who can differ honestly in issues of great importance, such as the matter of how to deal with the national patrimo ny of the Province of Manitoba. I say that to sell any of our national patrimony is to sell your birthright for a plate of beans. Mr. Speaker, in view of this fact, we kn ow the priori­ ties of this government.

We know that the dis concern with people, with the health of people, with the edu ca­ tion of people, with the econom ic develop ment to feed people, because we put people above all and any material gains in life. Because we want to protect and preserve the patrimony of this country, we also want our children to enjoy the same thing that we have been endeavou ring to preser ve and maintain for them. Bu t there's another objective that we should always bear in mind and it is the preservation of our de mocratic institutions of government.

We have witnessed so many devel oping countries in the world who have abus ed their de mocratic rights and therefore people have to resort to other means in order to achieve their ends. When the ballot ceased to work, the bul let will have to operate. This is true in all of the develop ing countries. As a matter of princi ple, any right that we abuse is a right that we risk we will lose some day. That's why I feel so bad when we abus e a right to discus s and debate in the Legislative Hall of this Assem bly, because of the parliamentary tradition.

I have a senti mental attachment to the parliame ntary traditio n in the sense that it can facilitate a peaceful and orderly exchang e of power without blood or vio­ le nce. Bu t if we ab use our rights, we're going to lose them. The most important thing that any government can do to act as the protector of its own people is to preserve certain und erl ying princi ples that are endur ­ ing for long perio ds of time. This is the princip le of social justice.

Because ou r society can only be as strong as the weakest el emen t, the weakest li nk in that society, we have to be ver y careful about those weak­ est links in our society - those who are least able to fend for thems elves. Social justice is the princip le which asserts that because we are not all born equa l, or we are born with equal facilitie s and equal talents, there are certain groups of people in our society who are least able to protect themselves. Those are the weakest li nk in our society; we have a moral obligation to look out for them.

Therefore, social justice de mands, in the distribu­ tion of goods, services, and resources in this society,

Thursday, 20 May, 1982 that the more affluent ones have a moral obligation to see to it that these ineq ualities in social and econom ic opportu nities should be so arrang ed so as that we can give the greatest benefit to the least advantaged. I su pport this Bu dget because it is doing exactly just that; I sup port this Bu dget which is an enlightened and rational Budget. We have tested it by the objective criteria of rationality and it passed. We have tested it by looking in to the objectives and goals of govern­ ment and it has satisfied that req uirement.

We shall, in order to preserve our demo cratic trad ition, one more thing we have to bear in mind is to preserve equa lity of econom ic and social oppor tu nity for all kinds of peo­ ple so that they will be confined by the rules of our parliamentary system and they will not deviate from those rules so as to endanger the peaceful and orderly, political, social and economic structure of this society that we have loved so much. I thank you , Mr . Speaker. MR. SPEAKER: The Honou rable Memb er for Minne dosa. MR. D. BLAKE: Mr. Spe aker, it's a pleasure to get up and speak dur ing this Bu dget Deb ate.

It's sometimes an advan tage to speak early and have all the things said that haven't been said a dozen times as is the case when you speak later on in the Bu dget Debate. So I hope that I will not be too lengthy and will not cover too much ground that has been covered before. Mr . Sp eaker, I want to say a word , first of all. about the delivery of the Budg et; I think the Bu dget was delivered in a style that was sort of sm ug.

They sat across the way like the cats that had swallowed the canarie s, figu ring that they had pu lled a real coup in not announcing a sales tax increase and instead com­ ing on with a wage tax that we have heard so much about, not only from this side, but from editorial com­ ments and from the busine ss com mu nity. I'll say a little more about that later on. Mr . Speaker, the effects of this particular wage tax will be felt throughout the communi ty in total.

It will be felt by old age pens ioner s. it'll be felt by others on fixed income, it'll be felt by those su ppor ting familie s, those su ppor ting busine sses and those in the farming communi ty that are pur chasing agricultural sup plies. So the wage tax is going to be som ething that will, I think, come back to haun t this govern ment although they felt at the time when it was announc ed that it was a neat trick and that it was going to solve all of their problems. -( Interjection )- I've jus t been informed by the new parliame ntary exper t from Ste. Rose, Mr .

Speaker, that "trick" is an unparli amentary word, so I withdraw that and su bstitute "they felt it was a neat move." But to quo te from an editorial, Mr. Speaker, "The payroll tax of 1. 5 percent is risky busi ness, given the fragile state of many busi nesses in Man itoba. There is a poss ibil ity this levy will further worsen the econom ic outlook for those em ployers whose busi­ nesses are labour intensive." That is very, very true, Mr Speaker , and I jus t wanted to emp hasize that point.

It's been mentione d by others on this side of the House that the Budg et was a kick in the teeth for busi ness and agriculture. I think that is a fairly strong term but it does sum up the feeli ngs of those of us on this side. An increase of 20 per cent in spending at a time when there is some move afoot throughout the la nd to hold the line that I think the 20-percent increase in spending is rather excessive, and I think the govern ment is going to have a very, very difficul t time in trying to raise funds to cover it. The Memb er for St.

Ja mes, the Min ister of Natural Resour ces, mentioned in his remarks - I can't qu ote him exactl y but some thing to the point that everyone kn ows that the governme nts have to raise money to cover their spending . That's a good statement, but that's not wha t's happening with this govern ment. They're not raising eno ugh money. They're going to run into an ackno wledged deficit of $355 million, and I haven't listed all of the various other mil lions that they have told us they're going to spend that aren't covered there, so we kno w the deficit is going to be way way more than that, probably $400 million.

That is not in keeping with a hold the line, or try to hold-the-line operation. The memb er that just spoke, the Memb er for Bur ­ rows, men tioned about what we mu st hand on to our childre n. I couldn't help but think then, Mr. Speaker, that this is what we're handing on to our children - massive deficits and debts that we'll probabl y never ever recover from un less there is such a turnarou nd in the economy such as we haven't seen for years and years and years, so I don't think that is someth ing we intended to turn over to our child ren. Mr .

Speaker, without running through all of the items that were in the Bu dget, I do want to mention the tax on gasohol although the change is maybe not going to be all that severe. Here was a move by the for mer ad min istration that attracted a Canadian em ployee-ow ned company into our province and into our area, and they have done a sup erb job in opening a defunc t plant, providing excellent jobs, excellent work ing conditions and the incentive that was pro­ vided by some relief on that tax structur e ena bled that company to get opera ting here.

It is the first plant in Canada, the only one to date although there are oth­ ers being bu ilt, so it's obviousl y a field that others are getting into. The reason that they'r e here, I think, has been good for Man itoba. The reason that they're here is very clear; it's been good for Manitoba. It has certainly been good for our const ituency and I just hope that this government is not going to get a little overexuber­ ant and start taxing them out of busi ness because there are other ju risd ictions that are looking for busi­ nesses.

This company is pretty nationally based and will be free to move throughout the Canadian sph ere. There is continual research going on; there is a possibil ity that this plant could be enl arged. They have the facilities at Min nedosa. There could be a research facility bu ilt in there to go into the cellu lose operation that we would welcome in our area because it is going to create extra jobs. Her e was a perfect exam ple of where governm ent incentiv es or govern­ ment seed money can start an operation that would become successful and would be of tremendous benefit to the area. Mr.

Speaker, the plant had to import consider able product from the Un ited States that there was no tax relief on and I kno w they have several mil lions to recover before they get back their original invest ment to get that plant going. It would 2633

Thursday, 20 May, 1982 appear that they are not going to receive much help from this govern ment. So what I am saying, Mr. Speaker, is I just hope this govern ment doesn't get overe nthus iastic in trying to grab some of that extra revenue too qu ickly when they see a plant operating as su ccessful ly as that one is. It is a well kn own fact, the officials of the company announc ed at the time that they fully expected the tax would reappear once that produc t became accepted and they got their ope ration in full swing.

So I am just cautioning this government to some degree not to get too anxious to get their hands on that tax dollar unt il this plant, which is an ideal Canadian operation, gets really on its feet and gets going. Mr. Speaker , as I had mentioned earlier that the idea of this Budg et at this particular time of chronic un em­ ploy ment should have been directed at the creation of jobs. We have heard so mu ch about what happened in Onta rio and the previous Budg et there.

Well, the No. 1 aim of that Budg et was to create jobs, even though they increased taxes to some degree and they're going to have a deficit, the main thrust of it was to create jobs. We have seen an nou ncem ents from the govern­ ment benche s on what they are going to do to provide student em plo yment. We don't think it is as good of a plan as the one we had; it's not going to provide as many jobs. They are going to insi st on vocation­ oriented types of jobs and I can't really see that being of any help to a student that wants to earn a few dollars to get it through school.

I have heard the Attorney­ Gen eral on this side of the House, the former Attorney-Gene ral, remark one day that he picked up garbage when he was getting his law degree, so I don't think vocation-oriented jobs are really going to be helpful to a student that wants to earn a few dollars to enable him to get back to uni versity next year and to get through. The massive layoffs are of tremen dous concern to all of us, Mr. Speaker , the layoffs in the north. We hope that a great numb er of them are temporary.

We kn ow that a great nu mber of them are created through eco­ nomic condi tions that saw a soft miner al market and saw great stockp iles. The massive layoffs that we are now seeing in the railway shops on both CNR and CPR are not enc ou raging to our particular economy. We needed a great thrus t to create some em ploy­ ment, Mr. Speaker. We needed the Alcan plant; we need it now. The Minister of Mine s met with the Stonewall Chamber of Com merce last night, fou nd out how badly they want it, how badly their economy is suffering and their businesses.

We need the Potash Mine and I would say there is pr obab ly slim chanc e of that coming into being now. -( Interjecti on)- We didn' t kno w that last fall. A little exper t from Sp ring­ field is chirping from his seat, Mr. Speaker , that we kn ew that last fall. I still maintain that miner al is there, whether we are going to squeeze that last dollar out of the people to bring it out of the ground such as our mem bers oppo site want to do, or whether we don't. We can provide hu ndr eds and hu ndr eds of jobs in Western Ma nitoba that are greatly needed and sorely needed out there, Mr. Speaker.

The Gr id and the Limestone operation, we have heard so much about that throughout the whole Budg et Debate -v ery, very im portant to the economy 2634 of this province. Ther e was nothing in the Bu dget whatsoever to give us any indi cation of an economic thrust for the next few years; the direction this gov­ ern ment was going to take; what they were going to do to turn the economy arou nd.

We heard an awful lot about it last October and last November dur ing the election campaign, how they had the great master plan that was going to tur n the economy arou nd, how they were going to recreate all the jobs that have been lost and bring back all the people that had left Mani toba. What have we got? Massive layoffs, every day you pick up the paper. Bankrup tcies, they ann ounce a Mickey Mouse program to provide the inter est rate relief. The Interest Rate Relief Progra m, I say, Mr .

Speaker , is going to bene fit a handful of people in Mani toba and those that get it, I know, are going to need it and they are going to be grateful for it. We anno un ced a plan to provide some mortgage assis­ tance that was meaning ful, not a band aid prog ram such as you have announce d here. Ther e was a pro­ gram announc ed in Ottawa awhile ago that your cohorts in Ottawa voted the government out on. That mortgage deduct ibility would have provided more relief for your mortgage owners that are suffering here than any program you've come up with or anything else.

So don't talk about what programs we might have put forth that would help the people. Mr . Speaker , we have to have pr ograms that are going to create jobs in Mani toba. There was nothing in this Bu dget to create em ploy ment; there was nothing in this program that was going to give encour agement to the people in Thompson, the people in Flin Flon, in the northern areas. Ther e was nothing there that was going to give them enc ou ragement to the people in Thompson, the people in Flin Flon, and the No rthern areas.

Ther e was nothing there that was going to give them enc ou ragemen t to look forward, a few years down the road, to a bright futur e. They may be faced next year with fur ther lay-offs, that we don't kno w. We hope that doesn't happen. But, Mr .

Speaker, what we were looking for in this Bu dget was something that was going to give some enc ou ragement to those that are on unem plo yment insurance now, or those that are look ing to better thems elves and find somet hing more to their liking, or wher e ther e was a chance of some futur e advance­ ment; jobs that maybe were of a technical nature that provided a better than nominal income. Those are the plants like Al can, the potash mine, the Limestone Gen erating Station. These particular develop ments are the ones that create jobs that are going to provide lasting and economic ben efits to this province.

There was nothing whatsoever in this Budg et that would indi cate there was any move in that direction to pro­ vide that kind of an economic thrust. Ther e is no qu estion about it, as someone has just mentioned - the Memb er for Emer son - they are ment ally ban kr up t. They brought in a cu te little Bu dget with a few little dainties in there that were going to tantalize the voter; try and keep a few election promises however shallow they might have be en.

Ther e are an awful lot of them that haven't been kep t to any degree but there was nothing whatsoever in there to encou rage those who were looking for a work­ ing futur e in Mani toba.

Thursday, 20 May, 1982 Ther e was much in there for those that might look forward to some other kind of a futur e in Mani toba and I would qu alify that because I don't think the particular wage tax is going to help those that might want to retire in Mani toba because they are now going to be feeling that 1. 5 percent in all of their pur chases. whether it be for food, produce or whatever. That was something that hadn't been intended. I am sure, by this govern ment. So it was a neat move, Mr . Speaker. - I won't refer to it as a trick - bu t it was a neat move.

Bu t it's not going to fool the taxpayers of this province because they were looking for something a little bet­ ter; they were looking for something that was going to provide em ploym ent. something that was going to give some enc ou ragem ent to the you ng people of this province to stay here and work here and build their futur e in Mani toba. Ther e was nothing in this Bu dget to give them that encou ragemen t at all. So. Mr . Speaker . it is a Bu dget that was bereft, as was mentioned earlier. of any economic thrust that was going to be ben eficial to the you ng people and to the working province.

So therefore. Mr . Spea ker, I move, seconded by the Honou rable Memb er for Swan River, that the amen d­ ment be amen ded by adding after the word "Ma nito­ bans," the following words: "and has im posed a pay­ roll tax on Mani tobans which will impede the economic recovery and contribute to higher unem ploy ment." Thank you very much. Mr . Speaker. MOTION presented. MR. DEPUTY SPEAKER, Jerry T. Storie: 1 he Hon­ ourable Memb er for Tu rtle Mou ntain. MR. B. RANSOM: Mr. Speaker, I would like to advise you that under Ru le 33(2 ) (

a) tha t I will be speaking on this amendment on behalf of the Op position and will be taking advan tage of the oppor tuni ty to speak for more than 40 minutes. MR. DEPUTY SPEAKER: The Honour able Memb er for Spr ingfield on a point of order. MR. A. ANSTETT: Mr . Speaker . I raise a qu estion with regard to the designation rule un der

Section 33(2). and would ask for your assista nce and your guidance in the interp retation of that rule with respect to the one hour notice required for designation? The req uire­ ment under (2) (

a) provides that the member on his behalf has given prior notice of the designation to the Speaker. MR. DEPUTY SPEAKER: I will accept the words of the Honour able Memb er for Tur tle Mountain as notice. MR. A. RANSOM: Thank you . Mr. Speaker. I do wel­ come the opportu nity to speak on this Bu dget Debate without constraint of having to try and fit within the spec ified time inte rval, because sometimes when one wants to make a point it's good to be able to pur sue it to the point where those people to which you are appealing, have some sense of the point that's attemp­ ted to be made. Mr.

Speaker, the Budge t which a govern ment pres­ ents is the single most im portant docume nt that gov- ern ment presents dur ing the course of a year, because the Budg et outlines the economic strategy which the govern ment is going to be pur suing over the course of the next year. It asks from parli ament, from the Legis­ lature. for the right to raise revenue s to cover the expen ditures which the govern ment hopes to make dur ing the year and that, of course. is the essence of parli ament - seeking the right to raise money.

Hope­ ful ly, that document does outline a strategy which the govern ment intends to follow and so it is a document that requires very careful study and debate. Whi le I perhaps agree to some extent with the com­ ments that were made by the Member for Bu rrows. that occasionally in our discussi on of the Bu dget and on discussion of other items in the Legislat ur e, we do perhaps depart somewhat from the standard of deco­ ru m that we might. on sober second thought. like to have. So I am going to attempt in my review of the Budg et today. Mr .

Sp eaker . to do so in a rational and noninf la mmatory fashion and hopeful ly we'll be able to provide a fairly detailed review of this Bu dget. I'd like to start with some quotations. Mr . Speaker , because I've had a concern all along about the way that this govern ment had been presenting the situa­ tion which they inher ited when they ass um ed office last November 30th, because I think there has been some misconce ption left with the pu blic as to what the situation was that was inherited by the governm ent last November 30th. I start with one of the things. Mr .

Speaker, that leads me to this conclusion, and this was an

article in the Winnipeg Free Press on Nove mb er 27. 1981. The headline is "Tories Leave $253 Million Headache," and then down the page there is a quo te from Prem ier-Elect Howard Pawley. This is a direct quo tation in this

article in the paper which says and I quo te: "Certainly, the pu blic has been misled." This was a reference to the deficit which that government was about to inher it three days later. "Certainly, the pu blic has been misled," the Premi er-Elect said. 2635 Then, Mr. Speaker. another qu otation as well which bears up on this same sub ject and this appears on Page 239 of Ha nsard on Tuesday, the 9th of March, 19 82, and again I'm quo ting from the speech by the Ho nou rable First Mi nister in add ressing the Thr one Speech.

He said, "This pr ovince, however, is less able to take advantage of the prospe rity today than indeed was the case back in 19 77." Well, Sir. that is one more comment which I would like to refer to later. A third one, which leads me to have this concern, is again a quo tation from the First Mi nister on page 241 of Hansard, Tuesday, the 9th of March, 1982, and he said, "B ecause we have no intention or desir e to raise taxes to an un com petitive level and the outgo ing gov­ ernment has push ed the deficit level very very clo se to intolerable levels." Mr .

Speaker, a further quo tation to which I could refer is this was an

article in the Free Press on Nov em ber 19 , 1981 . and it was titled "Pawley to Con­ tinue Mega Project Talks." Again , they're referring to the fiscal manageme nt, fiscal affairs of the govern­ ment and the Premi er-Elect was qu oted as saying, "I think we should work toward a fiscally sou nd bal­ anced situation ." And as a final qu ote here, Mr. Speaker, this is from a radio prog ram, a GBG qu estionnair e program that was air ed on December 3rd, and the First Min ister in

Thursday, 20 May, 1982 this situation again referring to the deficit said, "It is still quit e manageable, related to other provinces, so I would be surpris ed if there was any change in respect to our credit rating." Mr . Speaker , we have this kind of confli cting talk, one position being taken by the Premier-E lect just prior to assuming responsib ility for governm ent and then moving rather qu ickly to a somewha t different position within a few days of assu ming respon sib ility for government. Now, let me deal, Mr.

Speaker , with what I think is the most serious allegation and that is the one where he said, "Cer tainly the pu blic has been misled." Well, Mr . Spe aker , I will put on the record, once again, that our governme nt introduced a system of qu arterly reports, whereby at every qua rter the Department of Finance tells the pu blic how the busi­ ness has been going, if I can use that term, with respect to reve nu es and expen ditures, so that at the end of Ju ne, the end of Septe mb er and the end of Decem ber, there is some un de rstanding of the fiscal plan, how the fiscal plan of the governme nt was pro­ ceed ing.

That was brought in, Sir, by our governme nt in order that peo ple would kn ow, because we coun­ tered the situation in the past where in 1977, for instance, the pub lic and the Oppo sition were un der the impres sion that there was going to be a deficit of, on com bined Cur rent and Capital, I believe $12 9 mil­ lion in total.

It really wasn't under those circum stances un til this party got into power in October of 19 77 that they received a report from the Mi nister of Finance at that time which told us that in fact there was a projected deficit of $225 million at minimum and fur ther expen­ ditu res beyond that to which firm com mitments had not yet been made. So indeed, Sir, the pub lic at that time was not aware of that extra, appr oximately $10 0 millio n, and that was of cour se money that was going to be spent on the operating side, Mr. Speaker . MR. DEPUTY SPEAKER: Or der. MR. B. RANSOM: So, Mr.

Speaker, we brought in a system of repor ting that would tell the pub lic and would tell the Legisla tur e where things were at and so there was nothing hidden. There was nothing hidden, Sir. The Bu dget which I introduced in this Legislat ur e last spring projected a deficit of $21 9 milli on and there were a numb er of Special Warrants passed in the meantime which give indication of cour se as to what the additional spend ing might be. Sir , dur ing the elec­ tion cam paign there was never any qu estion raised to me as Min ister of Finance what the deficit was at that time.

The mem bers opposite weren't especi ally inter­ ested in what the deficit was, but when the quar terly report for the second qua rter was filed at the end of Novem ber, which was the norma l perio d of time that it takes to put together the qu arterly report. it estimated a deficit, I believe, of $252.8 million which was hardly a great significant divergence from the 219 , certainl y not a shocking diverge nce from the $21 9 million which had been pr ojected in April .

So for the Premi er- Elect at that time to say that the pu blic had been misled, I think, was an effort really to try and cloud the issue at the time because they kn ew what the situation was, Mr. Spe aker. The y had made commitments kn owing what the circumstances were and so they thought that they would try and cloud the issue by making these statements. When we got a look at the books, we saw what kind of a deficit that they were facing.

Since that time, they have made referen­ ces that the fiscal capacity of the provi nce had been dam aged by four years of Conser vative Governme nt, that the governme nt is now in a less advantageous position to be able to expl oit the circumstances than they were in 1977. Mr. Speaker, let me put a few figures on the record again and I admit, Sir , that I have already placed some of these figu res on the record, but they don' t seem to have been un der stood and I am going to take the oppor tuni ty to do so once again. I am going to com­ pare 19 77 with 1981.

In 1977, the growth rate accord­ ing to the Conferenc e Board for the Province of Ma ni­ toba was 0.8 percent. Tha t was the year the Conse rvatives took over from the previous New Demo cratic administration. The latest projection for the growth rate in Manit oba in 1981 made by the same Conf erence Board is 3.6 percent, 0.8 in 19 77, 3.6 per­ cent in 1981. I don't judge that to be an economy that has been somehow dama ged dur ing that inter val of time. Secondly, the rate of un em ploy ment when we assumed government in 1977 was 5. 9 percent.

It was 6 percent when the honour abl e mem bers oppo site assu med governmen t, a very slight inc rease. It had been down in the inter im, but it was a very sli ght increase, appr oximately the same. Then, perhaps, another figur e that needs to be looked at very careful ly was the debt servicing cost. I have heard reference recen tly to the cost of the debt as a percent age of the expen ditures of govern ment. Well, Sir , in the Bu dget that was presented in 1977 by the previous New Demo cratic administration, debt ser vicing costs were estimated at 4.2 percent.

In the Budg et presented last year by our admini stration, debt servicing costs were 4 percent, not much change, but down as a perce ntage of a governme nt's expen di­ tur es rather than up. Let's talk about the deficit itself a bit, Mr . Speaker, because the mem bers opposite did make much of the deficit last year. I appre ciate their position from a political point of view because our government had said and we believed that it is desi rable over the lo ng run to balance the Bu dget. We tried to do that and clearly we weren't successful.

We changed the direc­ tion that it was going and reduced it for two years runnin g and in the third year it was still substant ially below that which we had inherited, less than half, but in the final year we projected a deficit of $21 9 mil lion and the mem bers opposite had a great time in cr iticiz­ ing our govern ment for that. But let us just look at what the deficit is going to be at the end of 19 81 -82 and what it was at the end of 19 77-78 in terms of 19 81 dollars, because in this time of rapid inflation you really have to make some compar isons in terms of infla tion.

On that basis, the $252 million deficit which we are advised is going to be the case for the end of March in 1982, the comparable figure at the end of March, 19 78, would have been appr oximately $275 milli on, so in terms of cu rrency of the same valu e, there was a larger deficit in 1978 than there was in 1982. I should also point out that of that deficit approx- 2636

Thursday, 20 May, 1982 imately 58 percent in '77-78 was due to Oper ating; this year at the end of 1982 only about 25 percent of that deficit is due to Ope rating Expe nditur es, the rest was due to Capital. Two more figures, Mr . Speaker, that I think are worthy of attention also; that is that debt as a percen­ tage of the gross pr ovincial prod uct. In 19 77 the total direct and guaranteed debt of the province was appr oximately 42 percent of the gross provincial pro­ duc t of that year. The debt in the year past as a percen­ tage of the gross pro vincial prod uct was down to 36 percent. One final thing, Mr .

Speaker , in look ing at the taxa­ tion struc tur e that existed when we assu med govern­ ment in '77, as com pared to the taxation structure which the mem bers opposite inherited in 1981 , the taxation structur e in 19 81 was more competitive with other ju risdictions in Canada, and was less onerous on the people of Man itoba, and produced less revenue as well, of course.

But it was more competitive; the tax on small busi ness, for instance, had been reduced by 2 percentag e points; per sonal income tax had been reduced by 2 percentage points; the gift and succes­ sion duties had been elimin ated; the corporation capi­ tal tax had a su bstantially higher minimum level; things like the mineral acreage tax were totally elimi nated.

So ou r position, Sir, is that the mem bers Op posite did not inherit a govern ment fiscal situation that had been impaired by fou r years of Conser vative Govern­ ment; they inherited a government that was stronger fiscally, financially, than the governme nt which we inherited in 19 77. I don't kn ow by what measur e the honou rable mem bers opposite are able to say that they were misled about what happened, or that some­ how the govern ment is now not able to take advan tage of the oppor tun ities that come along because its fiscal capacity has been impaired. I don't know how they can say that. Mr.

Speaker, so where are we going in 1982-83? I don't really wish to dwell in the past that mu ch because I don't think that's productive. I only do that to set the record straight. If any of my figures are inaccu rate, are used in a mislea ding way, Sir, I trus t that the mem bers opposite will refute them. I don't belie ve they are. I belie ve it's an accu rate portrayal of the fiscal situation. So where are we going? Wher e are we going in 1982 and '83? Well, the same govern ment led by the Fi rst Mini ster who said I think we should work toward a fiscally sou nd, balan ced situa tion.

He also had said that the outgoing govern ment has push ed the deficit level very, very close to intolerable levels. Now, what do we have? What do we have from that government, Sir? We have a deficit that is pr ojected at $334 mil lion but we kn ow, Sir , that deficit is going to be much higher than that because we kn ow that there are very significant items that are not incl uded in the expend itur es, one of them, for example, being the amount of money that it's going to take to settle with the Man itoba Govern ment Emplo yees Asso ciation.

I und erstand why it's not there; I don't criticize the gov­ ernment for not pu tting it ther e. But no one should belie ve that $334 mill ion is really an accu rate projec­ tion of what that deficit is going to be because it's going to take sub stantially more than $20 milli on to be injected into the expe nditur es of that govern ment just to cover off that one settlemen t, and all of the health care contracts that are coming up that mu st be settled. Ther e's only a nominal amount in the expenditu res of the government, Mr . Speaker, and so the deficit is going to be much, much higher than $334 mill ion.

This is perhaps und erstan dable bu t I have to bear in mind what the First Min ister had said. Now the deficit this year, as a percent age of expen­ ditur es of the govern ment, is lik ely to be at least 13 .7 percent. Well, there was a figur e that perhaps I didn't me ntion before, is that the defi cit in 19 81 was 10 per­ cent as a perce ntage of governme nt expenditur es, as opposed to 12 percent when we took over in 19 77. So we had reduced the defi cit as a percenta ge of expen­ ditu res, but this year it's going to be back up past the 12 where it was when we took over.

It's lik ely to be, I would guess, in the range of 13 .7 percent. What has happene d to the taxation struc tur e of the province in this Budg et? Mr. Speaker , last year we introd uced a Budg et which was basically a stand-pat Bu dget in terms of taxation. We made some small increases in liqu or taxes, and cigarette taxes, but that's all, rather small. I think a couple of minor red uc­ tions in taxation as well. But we recognized that under those circums tances that was something that had to be done and the deficit was something that we had to accept.

Bear in mind the deficit had some $70 mil lion in it that was going to lift the tax bur den from the municip al ities, which was really simp ly a shifting of a tax load from one level of govern ment to another. Bu t we did that and we left busine ss in a com petitive posi­ tion; we left the economy in a competitive position. What this Bu dget does, Sir, has placed the Man itoba economy in a less competitive position than it was before, so that in addition to incurring this large deficit they also have imp aired the capacity of the economy of the pr ovince to func tion.

Unfor tuna tely, the increased expenditur es of this governme nt are basi­ cally not going towards wealth-pr oducing activities. The expenditu res are primarily going to keep the plant opera ting, which we ackno wledg e; the pl ant has to be kept opera ting. There is room for debate on what kind of a job they've done of that but basically that's what the money is going for. It's real ly not going towards Capital expenditu res. No w the government had an oppor tuni ty here when they assu med respo nsibil ity for government last Nov emb er, they had a choice.

They could have looked carefully at red ucing their expenditu res but they didn 't. Ju st so it isn't my statement that's being taken as being an oppor tun ity to reduce taxes. Sir, I would like to qu ote from one of the Mem bers of the Treas ur y Bench opposite. This was a statement that was made indeed in this very Bu dget Debate by the Honour able Min ister of Natural Resou rces, and it appears on page 2448 of Hans ard, Wednesday, 12 th of May, he said and I quo te, "We fou nd $15 2 milli on in the Estimates that were unn ecessar y. that did n't come before this House this Session.

" Talk about balanced Budg et and res­ traint. We found. Mr. Speaker. when the honourable leader talks about good govern ment. $81 milli on in Supplemen tary Es timates had to be passed by a Cabi net of this govern ment that they had not provided for in their Bu dget. Don't take it from me, take it from the Min ister of Natural Resources. He said there were 2637

Thursday, 20 May, 1982 $15 2 million of un necessary expen ditures before the governme nt. Then I would like further to quo te, Mr . Spe aker, if I might, from a speech given to the Brandon Chamb er of Com merce by the First Minister.

This speech was given on March 17 th, and I can qu ote from the notes in front of me because he said, "Well, up on taking office, my colleagues and I fou nd that Estimates had been prepared un der the previous governme nt but that the election prep arations and election campaign had delayed by several months the review of those Esti­ mates." Then he said, "We had a few weeks for the review process that usu ally takes several months. Some changes could be made but for the most part, it was not possible for the new Estimates to reflect the priorities and the direction of the new governme nt.

We were able to make some redu ctions." That's the end of the quo tation, Mr. Speaker. Now here we have a situation where the Mini ster of Natural Resources says there was $15 2 million of unn ecessary expendi tur es. The First Mini ster has said, "the only reason we were not able to cut that fur ther is we didn't have time." Well, Mr . Speaker, really, is this the govern ment that isn't prepared to take time to review the spending of the depar tments in order to save that $15 2 million and avoid the impo si­ tion of a payroll tax which is only going to raise an estimated amount of $70 million this year?

I find that difficult to believe because we took over govern ment in 1977, a month difference but, Sir, not only were we able at that time to pare the expen ditures of govern­ ment for the next year so that there was a 0 percent increase in expen ditures the follow ing year, we took time between October and March of that year to cut the pr ojected deficit from 225 million down to 19 1 million. Now, that's not easy, Mr .

Speaker, that requ ires a lot of hard work, and I need only point out that in the Budg et where the govern ment plans to spend $2.83 billio n, you really only had to shave about 2 percent off that spending to make it un necessary to impose a payroll tax, because that payroll tax only talks about revenue of 70 million, but it doesn't talk about the offsets that are promised - the tax that's taken out of one pocket and put into the other by this tax. So we don't kn ow at this point, really how mu ch money is going to be raised but I am certain that it is not going to be $70 million.

So by hard wcrk and paring those expen ditures, that tax didn't have to be introd uced. Imagine what they could have gained, Sir, by way of popular acclaim, if they had gone out to the pub lic and said, not only are we going to have to face the possibi lity of putting on a sales tax inc rease but we may also have to put on a payroll tax, and then they could have come in and said, we're not going to do either. Think what great fellows they woul d have been for doing that. That would have been even better.

So, Sir, that was an option that they had but evi­ den tly they didn't have time to pur sue th at -( Interjecti on)- the Memb er for Thom pson says, what would be cut? Let me jus t tell the Memb er for Thom pson what's inv olved because I happened to be on Treasury Board for three years and was Chairman of Treas ur y Board for a cou ple of years, and it has to be done line-by-line-by-line, again and again and again.

I know that didn't happen because all the mem bers on the Treasury Bench over there know that all the critics over here have the preliminary Estimates books that were pu t together by the departments, and we kn ow exactly how many dollars were proposed to be spent before it ever went to Treasury Board for review.

So all we need do, Sir, is go through the books and go through the Estimates before us and see the vast numb er of appr opriations where that govern ment opposite sim ply accepted the recommen dation that the bu reau crats gave and rub ber-s tamped it -( Interjecti on)- to tell the Memb er for Thom pson in the time that's available, Sir, and I don't wish to prevail up on the time of the First Minister, but the Memberf or Thom pson should realize that is a process which takes weeks of hard work and tough decisions and, Sir, they didn't do it. They didn't do it, that's all.

They weren't prepared to make those decisions. I have heard much from the membe rs opposite about how, on the one hand, we are criticizing them for not spending more money to fu lfil! their pr omises and on the other hand, we are criticizing them for spending too much money. They don't like that kind of criticism. Let me tell you how it is possible to intel lec­ tually take that position, Sir.

This government is going to be judged, not on the basis of what cando r on the part of the First Mi nister now reveals to be a situation they face, they are going to be judged according to the promi ses which they made -( Interjecti on)- the Mem ber for Thomp son comes back with the balanced Bu dget. I admi t we said we would balance the Budg et, we did n't do it. We lost the election and I'm sorry. Okay? Now they are the govern ment and they are going to have to make the decisions.

They have made the promises and if they made promi ses which req uired the expen diture of far more money than the govern­ ment was able to afford, that's not our fault, we didn't make the promises.

But when I hear comment s right­ fully made by the Member for Bu rrows, for inst ance, about the decorum of the House and I hear the First Minister talk about cynicism in the political process, Sir, I don't know of anything that does more to create cynicism than to have pr omises made which are not kept and which clearly become evident in the light of time, that it was never intended that they be kept. 2638 If promi ses are made and efforts are made to keep the promi ses and people und erstand that it was sim ply not possible, that is one thing; but if they believe that a promise was made cynicall y and that there had been no intention to keep it, then they pay the price.

Without sing.ing out something that this govern ment has done, I think I can sin gle out the 18 cents that the Liberal Party in Febru ary of 19 80 said that people didn't have to pay; that is an exam ple of that kind of cynical promi se. Now the memb ers oppo site will have to examine their promi ses and see if they have any of that kind of promise hidden away.

The promi ses that they made were very app ealing to the people because they said that no farmer was going to lose his farm as a conse­ qu ence of high interest rates; they said that no homeowner was going to lose their home as a conse­ qu ence of high interest rates; no business was going to go bankrupt because of the conseq uences of high inter est rates; they said that they would be able to turn the economy arou nd. The y are going to have diffi-

Thursday, 20 May, 1982 culty, Sir , in keeping those prom ises. I am going to return to those later. When we are on the sub ject of cynicism, I could perhaps refer to another area. Some of the new mem bers opposite perhaps won't be qu ite as fam iliar with this as those of us who sat here for four years are familiar with it, and that is, we heard nothing but criti­ cism for four years about what had happene d to the basic services that people get in this province. The health care system had been practically destroyed; Education had been set back goodness kn ows how far.

We listened in this Cham ber to comm ents about dirty sheets and not enough strips of bacon week after week, year after year and the New Democratic Party in the federal election of May of 1979 and the Liberal Party of the day as well, were able to convince the electorate in the federal election that indeed there had been cutb acks and diversion of funds into bui ld ing highways rather than going into the health care system.

It turned out after a few months and after the Fed­ eral Con servatives hadn' t been able to win a majority of governmen t, it came out that indeed there hadn't been any diversion of fund s, but by that time of course the purpose of that rumo ur had already been achieved. The same thing was used in the election of 1981 and there is ample evidence of that in the material that the New Democratic Party put out about what had hap­ pened to the health care and edu cational system and the basic services.

So one would have assu med that one of the imme­ diate priorities of this govern ment would have been to restore that syste m. We are going to have to spend some money to restore the health care system and the edu cational syste m, but no, that's not what we hear now. Wha t do we hear now from the First Mi nister?

And I am going to quo te again from a speech that the First Min ister made to the 51s t Ann ual Convention of the Man itoba Cham bers of Comm erce on April 25th and he said, "I think it's fair to say that our first months in office have been devoted to preser ving the eco­ nomic and social fabric of our province ." That's one of his quo tes.

He then goes on to say in the same speech, "The sing le most important decisio n we have made to date was to main tain pub lic services." He comes back to it again in the next page of the same speec h, "We have maintaine d services at levels comparable to that enjoyed in neighb ouring provinces.

I think this is essential if we are to keep you ng people in Man itoba and co ntinue attracting others to live and work here." This is the First Min ister speaki ng, spe aking about that system of health care and edu cation and basic social services which they maintained for four years had been, if not destroyed, certainly seriousl y eroded. Maybe, Sir , it's just that they didn't really un der­ stand and when they got into governm ent and began to look at it perhaps they did realize that the system was there, because now it's the system that they want to maintain.

That raises certain que stions in the mind of the pub lic as to just how candid is this governme nt when they were in Op position or now in governmen t, because it becomes qui te evident that many of the charges that were laid while that govern ment was in Opp osition now, by their own adm ission, were not true - not by our statement, by their statement.

Their objective, now, is to maintain the system that we expanded and made more efficient and said over four years that we were making more efficient and it was necessary to make reductions in expendit ures here and there, but it was possible to do it and still maintain the level of services. We said that; they did n't believe us. Well, now they believe it. But what's the pu blic going to think at that kind of thing?

So I can und er­ stand why the First Min ister when he spoke to the Brandon Cham ber of Com merce about the necessity of trying to prevent an attitude of cynicism from creep­ ing into the pub lic view of govern men t, I can un de r­ stand why he might be concerned about that. Now the thing that is perhaps of most signif icance in the long term is a qu estion of the econom ic leader­ ship that this govern ment is providing .

I que stion, of course, how much leader ship really is being provided, but we have to assume that there is, indeed, some econom ic thrust and I would like to spend some time look ing at that, especially relat ive to the promises that the mem bers opposite made when they were in Opp o­ sition. I have qui te a folder here of promises that the mem bers opposite made. Some they may recogn ize, some they may not, because I think there were prom­ ises made by individual mem bers, cand idates oppo­ site, that perhaps others weren't aware of.

I kn ow this morn ing in the Pub lic Utilitie s Com mit­ tee when my coll eague from Pembina referred to a pr omise with respect to Hydro services, the Min ister of Energy and Mi nes didn't seem to be aware of that commitment which had been made - and I'm not going to take these in any particul ar order, Mr. Speaker - but I'm going to place a numb er of them on the record because, as I say, this government will be judg ed relat ive to how they perform with respect to the promises that they made and the commitme nt that they made to the elect orate of Man itoba. I believe that this

article was written - I believe it stem med from the statement that the now First Minis ter made - perhaps the day that the election was called and the then Leader of the Op position said, and I quo te, "Manit oba did not have to suffer this decli ne.

Population growth, economic growth, commu nity devel opment, job crea­ tion, man ufacturing, private investment and all the other aspects of a healthy province could have con­ tinued to maintain the relatively high levels achieved un der the former NOP govern ment." 2639 Well, aside from the accur acy of that statement, I think what is significant about this statemen t is that the then Leader of the Opp osition was saying, it isn't outside factors that are involved here; I don't see Pres­ ident Reagan's name appearing here; it wasn't Ont ario and it wasn't Nova Scotia or Saskatchewan either.

He was saying that the fault of what was tak ing place was the faul t of the Conservative Governmen t. Well, fine. That's a le gitimate position for him to take, but it follows from that then, that it is within the realm of the Provinc ial Govern ment to be able to correct the diffi­ culties which the provincial economy faced. Then in an

article that appeared in the Free Press during the election - this one was headed, "Pawley Vows to End Welfare Phil osophy." He said a numb er of things here, he said, "I don't think there is any group in Man itoba that feels more betrayed by the Lyon Conservatives' econom ic failure than does the sma ll busi ness communi ty in this province." Well, we'll see how the sm all busin ess commu nity judges the actions

Thursday, 20 May, 1982 that have been taken by this government in the first six months, Sir. He said also and I qu ote, "I can tell you today that the NOP Govern ment will not rely on a few large com­ panies for economic leadership in this province." I gather from that statement that it was the inten tion of the New Dem ocratic Party not to rely on things like an aluminum sm elter or a potash mine or the Western Power Gr id but that, indeed, they would be able to bring about this sort of grou nd swell of little develop­ ments here and there that wo.uld buo y up the econ­ omy of Mani toba.

Again, I guess that's a theory that could be defended but so far we haven't seen too much result. Then and this is not a quo te, this is a summa ry of a position that was taken by one Ingeborg Boyens who wrote this

article so I can't totally vouch for whether this is

an act or a portrayal of what he said it on - but she said, "Pawley told students the revital­ ization of the economy, NOP style, was essential if they hoped to be able to stay in Mani toba." So evi­ dentl y there is an NOP style of revitalizing the econ­ omy which either hasn't been developed yet or is not revealed to mem bers on this side of the House. But we're watching for that because that certainly indi­ cated to people in Mani toba what they could expect from an N.D. Party govern ment. I ackno wledge that there were people who left this province.

There were a lot of people who left this province to seek em ploy ment elsewhere, expe cially in Saskatchewan and Alberta. So the prospect of this kind of promise had to be appealing. This promise was made in Thomp son, and of course we know what happened in Thom pson in 19 77; there were large reduct ions in the work force in Thom pson and people had to leave and the economy was depr essed, and the situation remains still in serious condi tion.

So this mu st have been an appealing promi se and I' m sur e that those people are going to want to hold the First Minister and the government and the Memb er for Thomp son responsible for that kind of thing. They're waiting for the NOP revitalization of the economy in order that they may have em ploy ment. Ano ther article, this one in the Brandon Sun, back as far as Septe mber 6th of 1980, where it's headlined, "Pawley Blames Tories for Ill Economy. " Again no reference to the outside factors.

No -(I nterjec•ion)­ well, Reagan wasn't even in office then, and I'm sur e they did n't want to begin to criticize President Carter for the im pact that the U.S. economy was having on them. It was the Tory governme nt. I'll jus t qu ote very briefly the first paragra ph, Mr . Speaker, which says "Gov ernment restraint policies" -( Interjecti on)- Mr . Speaker , I' m going to have to have some assistance here in keeping order.

The first paragraph says, "Go vernment restraint policies are to bl ame for Mani toba's continued poor economic performance, Op position Leader Howard Pawley says." Now that again, indicates to me that if, indeed, it was the eco­ nomi c restraint policies of the Conser vative Govern­ ment that were responsible for the ills, then that gov­ ernm ent should be able to correct those ills sim ply by easing off on the restraint policies of the government .

Perhap s that's what we're seeing; perhaps that's why we are looking at a deficit that's going to go, I guess, to $400 million, and perh aps that's why we are seeing expendi tur es that I'll go on record, Mr . Speaker, as saying will approach a 20 percent inc rease before this fiscal year is out. So maybe that is the strategy then that the honou rable mem bers are using to revital­ ize the economy; that may be the NOP strategy. We'll look for the resul ts, and we'l l hope that there will be positive resul ts because we want to see this economy prosper as much as the honour able mem bers oppo ­ site.

It just seems to be some difference of opinion as to how that can be best brought about. Well, there are some more promi ses here, Sir, that were made with respect to the economy and help to people in difficult circums tances. This had kind of a catchy title to it, too. I acknowledge that the New Demo crats had some good adver tising people - I think they probably were better than ou rs. I know that they feel they deserved the contract that they awarded them then in govern ment since. Bu t this said, some­ thing to come home to, a home. Well, you know, that's kind of good.

But they promised the Emergency Inter­ est Rate Relief Program in which they said the two­ year program will ensur e that no Mani toban is forced to lose their home, farm, or small business due to abnorm ally high inte rest rates. That's a pr omise that has been discussed in this House many times, and I can assure you it's going to be discussed many times again over the next four years. But it's qui te evident that at this point in time, that isn't happening, Mr . Speaker , because this piece of advertising material did n't say that this wasn't going to apply to a farm er that grossed more that $70,000 a year.

Most of us who have some familiarity with agricul­ tur e kn ow that the vast majority of what one might call viable farms, viable family farms, have got a gross reve nue of over $70,000.00. So those people were led to believe that there was help coming for them - (In terjection)- the Member for Sp ringfield seems to have some difficul ty with the concept that 20 percent of the farmers might produc e the vast proportion, the vast majority of the agricultur al produce on his farm, Mr. Speaker, in this province.

I ask him to look at the information, to look at the statistics and see what proportion of the commercial farms produced 90 per­ cent of the food and the agricultu ral products that are produced in this province. It's a very low percen tage and those people are totally exclu ded from this pro­ gram - almost totally excluded from this program. They weren't told that they were going to be excluded from this program. Mr . Speak er, I can tell you right now there are people who are losing their farms.

Ther e are farms being lost, there are people being forced out of farming; there are peopl e who can't get operating credit to keep going. They wonder where the promise is that this govern ment made. 2640 The people who are going to get help, and we don't know how many yet because I don't think there has been a nickel flowed through this progra m, not one.

They have been in govern ment for six months and they promi sed imme diate emer gency relief, that even those farmer s who are going to get some benef it from this program weren't told that it didn't appl y to all their la nd, it only applies to the home quar ter. Well, Mr . Speaker, I appeal to the member s opposite, in the name of reason, is there going to be a viable com mer ­ cial farm that is going to be able to stay in bus iness on a qu arter

section if they aren't in inten sive agricul tur e,

Thursday, 20 May, 1982 in market gardeni ng, or perhaps in pou ltry producti on or hog production? The cattle producers and the grain producers and the forage producers, that's not going to sa