Manitoba Hansard — 0 in 1973 (Sitting 60, 30th Legislature, 2nd Session)

30-2-60

Manitoba — Debates (Hansard)

THE LE GISLATIVE ASSEMBLY OF MANITOBA 8:0 0 o' clock, Thursd ay, April 24, 197 5 MR. SPEAKER: The Honour able First Minister. 1663 MR. SCHREYER: I beg to mo ve, seconded by the Honourable the Minister of Labour that you, sir, do now leave the Chair and the House resolve itself into a Comm ittee to consider of Ways and Means for rais ing of the Supply to be granted to Her Ma jesty. MO TION pres ented and carr ied and the House resolved itself into a Com mittee of Ways and Mea ns, with the Honourable Fi rst Minister in the Ch air. BU DGET ADDRESS MR. SC HREYER: Mr.

Speaker, I trust it will be well rece ived by all honourable gentle men in the House if I were to depart from tradit ion for just one mi nute to refer to the great conti nuity we have in the Province of Ma nitoba with respect to the care and custody and delib er at ion of our financial concerns. I refer to the fact that this year , 19 75, is the 25th year in wh ich our Deputy Minister of Fin ance, Mr. Stuart Anderson has been Deputy Minister. Mr.

Speaker, 1950-1 97 5, and in the per iod of 25 years or a quar ter of a century spanning three different admini strations and at a time when there has been great change taking place with re spect to the dime nsions of our expenditures and our Budgets, I think we have been pr ivileged to be served by such an honourable gentleman and I take some comfort from the fact, as I think we all do, that he is the Dean among Deputy Ministers of Fin ance in Ca nada. In 197 3, Mr.

Speaker, in trying to capture the substance and the spirit of the budgetary objectives and goals, I concluded our Governme nt's Budget Address for that year with a quota lion from the late President Frankl in Roosevelt as follows : " The test of our progress as a soc iety is not in whether we add to the ab undance of those who already have much , but in whether we provide mo re for those who havlt littl e." I have repeated those words tonight because I feel strongly that the philoso phy they reflect ha s never been more important than it is ri ght now - nor has it been mo re sorely tested than in lhe cur rent cac ophony of salary dem ands and professional fee deman ds, following in the wake of increases in prices and profits in the last 18 months.

Ever since our New Democr at ic Government was elected to office nearly six years ago, we have stood by that philosophy - and we will continue to uphold it, for as long as we are pr ivil eged to serve the people of th is province.

In the face of serious national and international inflationary pressures in recent years, our government's dedication to the principles of equality and social justice has helped , I like to th ink, to some significant degree our ci tizens achieve what we believe has been consider able progress - a degree of progress which I would say has been unmatched during the pa st fiO years but if which might be regarded as an exaggeration , I would say certainly unmatched during the present generatio n . And I will be tabling docum ents later this evening to illustrate th is asser tion in graphic form .

In many ·cases this progress ca n be measured in terms of indisputa ble , objective statis tics. In other cases, it has to be judged admittedly in somewhat subjective term s, in term s of the changing human values we see around us - values such as more equality of opportunity and more equality of the human condi tion itself and in the growing confidence am bng growing numbers of Manitobans, because of that greater equality, that their hopes and aspir ations can and will be fulfilled - regardless of famil y background, regardless oi fam ily wealth .

Despite jurisdictional and fiscal constraints , we have been able as a Provincial Co vernment of a province of one mil lion people to introduce I think rather new and innovative servi ces , while increa sing employm ent , and providing significant tax reduc tions, especially al . lower income levels . Tables which will be di stributed later will demonstrate those reduc t ions at every level of income. And here , sir , I pause for. effect and empha sis to say that t>qual levels of income as between 1969 and i975 show significantly lower taxation today than :i or 6 years ago.

For example a $10, 000 a year family with 2 children under age 16 would have paid, did pay , $714 in provincial income tax and health taxes in that year . Someone who wa s

1664 April 24, 1975 BUDGET ADDRESS (MR. SCHREYER cont'd) ..•.. earning $10, 000 in 1973 or '74 would have paid , same family 2 children, $388 in the same taxes , and after the Budget to night, si r, that same family, not that same family but a family at $10, 000 - man , wife, two children under 16 - will pay not $714, not $318, but $123 in provincial income tax and health taxes . This, Mr. Speaker, goes some of the way to offset the impact of inflation .

I should think quite some di stance indeed towards offsetting the impact of inflation and it goes a long way to destroying some of the myth that government necessarily will have higher revenues during a time of inflation because it will not do anything about it . An argument which by the way conveniently forgets that govern ments like anyone else have to shoulder higher costs during a period of inflation.

I think honourable members would be interested if I were to refer to the fact that in one of our sister provinces they published a chart showing a cross-s ection of goods and services bought by Government which have sharply increased in price to government.

The price of food bought for in stitutions of government, sugar - 300 percent increase; skim milk - 60 percent increase ; flour product, biscuits - 40 percent increase; medical drugs, Butone capsules - 118 percent increase; penicillin - 72 percent increase in one year; calc ium chloride for high ways , I presume - 22 percent increase; fuel oil - 100 percent increase in one year; asphalt - 105 percent increase; data processing cards - 105 percent increase .

And all of these things which have been measured as to increase in the Province of Ontario apply to any sister pro vince in Canada as being more or less the magnitude of the increase of costs that government have to face during times of inflation . But, sir, I don't want to dwell on that . I would like to say that our sense of achievement should not be mis taken, and we do have, my coll eagues and I1a consid �rable sense of achievement but that should not be mi staken for complacency .

We have not we admit been able to shield our citizens adequately from the effects of major national and indeed international economic disruptions resulting from inflation an<1 the effects , the cumulative effects , of a continuation of simpli stic percentage increases in salary adjustments across our country over many years . Therefore, our efforts in dealing with these problems, and in reducing social and economj.c disparities 1 will become difficult enough. The budgetary proposals I will place before the House tonight will make it clear that we are prepared to meet that challenge directly .

We intend to take deliberate action to safeguard the benefits the people of Manitoba have gained in recent years and to make certain that the pattern of progress which has been established during those years will be maintained in 1975. Before I deal in detail with the economic si tuation which confronts Manitoba in the year ahead , I want to review brie fly some of the more important statistics which are now available to us after fiscal year end.

As has already been announced , our Gross Provincial Product, which stood at about $2 billion in 19 60, and at $3 .5 billio n at the end of the decade of the 1960 s, 10 years later in 1974 exceede d the $6 billion mark . And I invite honourable members to do some mental cal culat ion to net out the effect of inflation so as to get a constant dollar value_, because even with that, sir , the progress has been dramatic and impressive enough. It is now estimated that the increase was some 18. 2 percent over the previous year's record level .

Once again, Manitoba' s Gross Provincial Product grew faster than the Gross National Product for Canada as a whole even though our inflation rate remained marginally lower - no point in bragging about it , sir , but it did remain marginally lower than the 1974 inflation rate for Canada as a whole . This means then that the "real growth" with inflation squeezed out in our calculation, that the real growth after the effects of inflation are netted out continued to outpace the Canadian average in 1974 .

The substantial growth in our gross provincial wealth or product in the past year was paralleled by increases of approximately 18 percent in total personal income; 19 percent in labour income, and over 30 percent in farm cash income, even with a levelling off in the value of agricultural output during 1974 . So netting out for inflation , the respective rates of increase are approximately 6-1/ 2 percent, 7-1/ 2 percent and 17 -3/4 percent. Every year since 1971, the per capita incomes of Manitoba after taxes have increased more quickly than the national average for all ten provinces.

And mark, si r, in 1974 , for the first time in many years, our province's average di sposable per capi ta income after taxes,our

Ap ril 24, 1975 1665 BUDG ET ADDRESS (MR . SCHREYER cont'd) ..... province 's average after tax incom e, etc . actually exceeded the Ca nadian national average . We believe that this indicator proves rather conclu sively that Man itobans are not, by any me ans, over taxed relative to the citizens el sewhere in Canada with respect to one or two provinc es, well one provinc e, sir , perh aps, but not taken as a national whole . And I might add that the results are the same both before and after the effects of infla tion are netted out.

As was noted earlier , the total value of agricultural output levelled off during 1974, but , at around $1.2 billion, it rem ained more than two and a half times as high as the year in which our government took offi ce . The value of manufacturing shipments increased by over 23 per cent last year and retail trade expended close to 16 percent . Total investment in the private sector grew by about 25 percent last year and reached a level which was, once again , almost double the total in the year before we were elected .

In the public and private sectors combined , the overall increase in investment was more than 22 per cent . Al though housing starts - and we hear something about this, Mr. Speak er , from implied criticism - but nevertheless the fact is that although housing starts declined in 1974 in Manito ba , as they did everywhere else in Ca nada , housing completions increased to a new record of 12, 164 units . And total constructio n activit y also increased to a new record levri. Ma nitoba 's average unemplo ym ent in 1974, 3.1 percent, was down from t� e 3. 9 percent figure recorded in 1973 .

Inde.ed , as we all know, our provinc e's jobless rate o� unemployment rate was among the lowest in the country and was more than two full percentage points below the national average of 5.4 percent unem ployment . By the end of December , 1974, it can be said that 60, 000 additional job s had been created in Manitoba in the past five years. · Inflation , of course , wit hout belaboring the point, was the most obvious economic prob lem throu ghout Canada last year.

Alt hough the consumer price index for Winnipeg increased somewhat less quickly than the national index, the people of our province experi enced substan tial price escalation in nearly all essential goods and serv ices .

We believe , however , that several measures our government introduced last year , including higher tax credits, the special supplement for the elderly, the indexation of social allowance benefit s, universal medical drug assis tance, along with new programs and tax reductions which were implem ented in previous year s, helped provide a signif ican t degree of real incom e protection for our citi'!:ens, especially those with low and fixed incom es who have historic ally and traditionally been lmilt worst during periods of rapid inflation .

The relatively favourable after-tax income figures to which I referred earlier seem to support th is conclusion. Looking ahead , sir , insofar as the year 1975 now appea rs, it would seem that Canadians are likely to face a continuation of double -<:ligit inflation , coupled with unfortunately growing unemplo yment partic ularly in a pattern from east to west .

At the First Minister s' Con ference in Ot tawa earlier this mont h , I poin ted out that if pre sent na tional forec asts turn out to be corre ct, then Ca nada 's overa 11 economic performance in 1975 may well be one of the worst in this generation 's memory . In these circum stanc es, it is inevitable that our own provincial economy will be subjected to increa sing pressure . The specific budgetary proposals to be presented later th is evening have been formula ted in anticip ation of just such pressures .

However , it is clear that a single provinc ial administration on its own, ca nnot reasonably expect to overcome problem s as serious as those which most Canadians will face in the months ahead . This is particularly true in the case of inflation, but it is also true with respect to unemployment. The origins of both these problems are primarily international and national , I would say rather , to transpose tha t, primar ily national and internatio nal , and solutions have to be found through action at the federal level which is closely co -ordinated with that of the provinc es.

For this rea son , our government is encouraged to put it in a positive vein, the Province of Manitoba is encouraged to learn that the Government of Ca nada has decided to introduce a new budget later this spring. It is now quite evident that its budgetary propo sals of last . November were inadequate to deal with the pre sent economic situat ion , as it is rapidly unfolding much less was it able to anticipate or deal with the worsening trend in unell?ployment which is predicted for the latter half of 19 75 .

1666 April 24 , 197 5 BUDGET ADDRESS (MR . SCHREYER cont'

d) During di scussions of the state of the economy at the First Ministe rs ' Conference on April 9 and 10, I outlined some of the measures which our government believes should be con sidered for the New Federal Budget. These measures include: Special job creation program s, but of a selective kind; Subs tantially-increased financial support - there can be no question of this , sir , in the area of housing; and The immediate introduction of an income supplem entation program for low income people, particularly the working poor .

In addition , we believe steps should be taken immediately to safeguard the income of agricultural producers against possible declines, and this becomes very critical , si r, because although we now accept thllt agr icultural income is much better than it was a few years ago, the cost of production, or the cost of inputs to our farmers, has increased just incredibly and the sharp increases in farm commodity val ue s, rather surpri sing as it may seem , cannot stand much of a decline becau se of the escalation and the cost of inputs or production.

And, sir, we would also sugge st to the Government of Canada to seek to improve and enforce competition legislat ion so as to restrict monopolistic price s, profiteering , and price gouging . We have already indicated that our government will co-operate, and let there be no mis take about that, sir, the Province of Manitoba will co -operate with the Government of Canada in its efforts to seek a national consensus on how to deal with the problem of inflation . However, much as we support this national desire , it's more of a desire than an effort to date .

We are concerned that the proposed voluntary "targets" for restraint in prices, salaries and profits , may not be particularly effective . Clearly they must not be one-sided in their application . In partic ular, such guidelines must take into acc ount the need for alternatives to percentage increase s in salaries which have, during our lifetime , only succeeded in widening disparities and do nothing to help offset the impact of inflation on average-income househtlds. It is our government's view that current economic problems require far more than volun tary measu res .

The recurrence of damaging cyclical swings in the Canadian conomy can only be offset effectively through a strong national planning mechanism and through policies designed to control profits, to regulate the prices of esse ntial goods and servi ces, to limit incomes from interest, professional fees and other similar sources, and to guarantee, perhaps that's putting it too stro ngly, sir , to give some better indication than up to now with respect to average working families that their purchasing power will not be eroded over time.

Co -ordinated national guideline planning is also necessary to ensure that our scarce resources ar e not squandered on projects whose economic and social value may be question able . We believe that a comprehensive national investment policy is required to meet our long-term needs for new sources of energy, and I can only say that that is ctitical , expanded housing supplies, and increased health and educational facilitie s. Now, it is said , Mr.

Speaker, that the major oil companies are attempting to lay claim to a larger share of our nation's financial re sources in orde:t to extend their exploration and development activitie s. Our government does not dispute the need for expanded oil suppli es, but we believe that these supplies should be developed through a system which will cause the least pos sible disruption to our economy, and the least possible burden to the people of our country .

Such a system would involve the appl ication of some system as opposed to a non system , the application of some system of pricing principles to oil product, just as they are already applied for electric utilities, natural gas utilit ies, and the like . We do not believe that sig nificantly higher prices for "old" oil, from existing sources, are justifiable at this time merely because opportunity seems to suggest it .

Opportunity in itself is not a justifica tion for changes in price for a vital commodity and can there be any doubt but that oil has become the industrial life 's blood upon which our economy on this continent has become almost, I would say, over- dependent, sir - the word mi ght be better put as "addicted ." And we will -- (Interjection)-- Mr . Speaker! I would not mind a rational discuss ion on oil pricing at any time.

I understand that there is some considerable view shared across the way that the price of oil ought not to be allowed to increase significantly or substantially at this time, or is their leader, sir , speaking only for himself ? --(I nterjection) --I thought we had consensus on that one iss ue alone, as between the two sides of the House , but if I' m mis taken we should be advised because the issue is too important upon which to be unclear . We will continue to

t April 24, 1975 1667 BUDGET ADDRESS (MR . SCHREYER cont'd) ..... emphasize this view in discussi ons wit h federal represe nta tives in the coming months . And, sir , we really belie ve that there is a very real di stinction to be made between increa sing the price of oil with respect to those uses of oil that can be substituted for by other forms of energy , even with prese nt-day technology, where it 's pos sible already to substitute for oil, as opposed to those us es of oil today for which. there is no foreseeable sub stitute form of energy .

And by that we mean that urban transi t, urban transit consump tion of oil , thermal generation of electricity by oil , and space heating by the turning' up of oil are examples of uses where an increase if justified at all is far more just ified than would be an increase in the price of �il for uses which there is no conceivable substitute such as in tractors , in combines, in civil aviation and in similar uses where, to repeat and it cannot be repeated enough, there is no realistic serious possibility of substitution of energy form at this time .

So if the Federal Government wis hes to refine its rationale for increasing the price of oil as between differenti ating uses and non-substitutable us es, then there we believe ·can be a much more serious possibil ity of coming to some agreeme nt as to price and price changes . But on the other hand , sir, there is far le ss, if any , ju stification, as I say, for a major increase of the price of oil for those uses for which there is no realistic alternative whatsoev er .

The subject of oil pric ing is only one of the major issues in the field of federal -provincial relations which will have to be dealt with in the near future . Several major shared -cost and unconditional grant programs are now being renegotiated - as between all the provinces and Ottawa . The outcome of these negotiations will play an impor tant

part in determ ining the degree to which our government can continue to improve and expand the services we provide for the citizens of the province, and the ass ist ance we can make available to municipal government and school divisi ons . Among the documents or ma terial which will be appended to the text of this Budget Address later this evening will be a brief paper on federal-provincial financial matters . It is an important area of concern, sir .

Al l honourable members of this House should want to have that material but it is too lengthy to include in the Budget Address itself, so accordingly it will be dis tributed for their convenience and perusa l.

This paper will outline recent developments with respect to the negotiations concerning the equaliz ation formula , the income tax revenue guarantee arrangemen ts, the post-se condary education financing program , hospital insurance� Medicare, the Canadian As sis tance Plan, joint economic development programming, and the recently , I think roughly 18 mo nths ago, start-up of the national tri-level discus sions of public finance, revenue-sharing - federal , provincial , municipal . Well, Mr.

Speaker : one of the most often -repeated concerns of municipal governments in recent years has been the inadequacy of their most important revenue source - the Real Property Tax . It has been argued that the Property Tax is deficient for two principal reaso ns: First - it has been suggested that property tax revenues tend to grow more slowly over time than r }venues from cer tain other forms of taxation . Well, Mr. Speaker, candidly, there . is only a limited degree of validity of that argument .

It is true to a degree; it i � certainly not valid in its entirety , simply because as se ssments and property values als o bear j a relationship to economic buoyancy and inflatio n , and so adjustments take place in property value. Whether it is unbeknownst to many people or not, it is simply a fact. And maybe that degree of adjust ment - there's too much of a time Jag . Perhaps that's one of the proble ms.

But there is a second argument and that is that it has been pointed out that the impact of the tax on real property tends to be regressive; that is, that the burden of the Propert y Tax bears more heavily on low and middle income groups than it does on higher income groups and on revenue-bearing commerc ial property . That may be true, sir, and there is a way to offset some of that effect, as I will try to el aborate on in just a few mome nts.

Our government has resp onded to these arguments and concerns in several ways: For example, in 197 3, we instituted the first provincial-municipal income tax revenue -shari ng system in Canada . Under this syst em , the province transferred to the municipalit ies , on a "no-s trings-attached " basis, an amo unt equal to 5 percent of total annual revenues from pro vincial, personal and corporation income taxes . Because the income taxes are based on pro gressive rates and have a relativ ely high "income elasticity" ,1 the re venues they yield tend to g-row mo re quickly than revenues from any other sources .

Under thi s re venue -sharing system , the municipalities have received the full benefit of this yearly revenue growth rate, and their

1668 April 24 , 1975 BUDGET ADDRESS (MR . SCHREYER cont'd) .•..• relative reliance on the Property Tax is by degree that much less than it would otherw ise have been . As a result of this formula , per cap ita grants to municipalities have risen close to 60 perc ent in the past five years - from $8.0 0 per capita in 1972 to $1 2. 66 per capita preliminary figures which were announced for this year . I shall add - now that the 1975 grant will increase as a result of a fiscal year -end adjustm ent I will explain later .

The Province has also withdrawn from the amuseme nt tax field and has introduced legis lation under which municipalities can apply this amusement tax or non-property tax source for their own purpose s, and some have chosen to do so starting as of January 1. In 1972 , our government introduced a Property Tax Credit Program desig ned to reduce school property tax burdens on an equitable basis for homeowners, farmers, and renter s. For 1973, benefits under this plan were increased from a $1 40 maximum and $50 general minimum up to a $200 maximum and $1 00 general minimum.

In addition , the base was broa dened to include all property taxes . Benefits were again increased for 1974 -t o $250 maximum and $150 general minimum. For last year alo ne, the Property Tax Credit Plan reduced total property levies by about $63 million. In other words , the net municipal tax payable by Manitobans last year would have been $63 million higher had there been no tax cre dit plan .

In addition to the tax credits and unconditional grant s, the Province has also increased each year its assi stance to municipal governments and school divisions under numerous shared cost program arrange ments, such as the Public Transit gra nt , public school financial assist ance through the Education Foundation Program, and so on. I wish to indicate, sir , that tran sit grants will increase this year again under a revised cost-s haring formula , whereby the Province will pay for the lesser of 50 percent of the previous year 's deficit, or 50 percent of gross pass enger revenues .

The previous formula was the same in respect of the 50 percent share of the deficit, but the alt ernative was lower - that is 40 percent of gross pas senger revenues was the other limitat ion. Grants under the revised formula for assi stance to urban municipal public transit , Winnipeg, Bran don, will total some $4 .7 million in 1975 . A new cost-s haring plan will also be introduced shortly to encourage the introduction on a broad scale of any variat ion of electrically -propelled transit system s.

This program will also cover major associ ated costs and will be linked to propose d new federal urban transit financing arr angements. Overall, it should result in senior governments financing up to 75 percent of the capital costs of purchase of urban transit vehicles that are under any variation . of electrical propul sion . Our government will also be proposing a plan for cost-s haring up to 50 percent - on an experimental basis with municipalities in the purchase of smaller electrically -powered vehicles required for general municipal purposes - any municipal pur pose whatsoev er .

Annual provincial expenditures under the Education Foundation Program are now roughly $74 million higher than they were five years ago . So if anyone asks, where is the province spending all that money, one of the answers is right here with respect to public school educa tion co sts at the local lev el , $74 million more in that one respect alone . Another $16 million this year will go by way of addition to our public school financing plan - much of it in the form of equalization payments to provide extra help for taxpayers in school divisions which have a lower �than -average asses sment base .

Overall, it has been es timated that over half, well over half of the entire provincial budget now goes for direct and indirect assi stance to local government and local property tax payer s. This ass is tance - which is funded through general provincial revenues - has made it possible for local government to rely less on property tax than would otherwise have been necessary to finance their operations . Of course , any further large-scale extension of uncon ditional revenue transfers to municipalities , by definition would necessarily have to subtract further from provincial rev enue sourc es.

In other word s, the funds would come from the same taxpayers - the people of Manitoba - but they would be paid through provincial income taxes, provincial sales taxes, and other provincial revenue s, rather than through taxes levied by the municipalities. There a number of problems associa ted with this particu lar approa ch . As the estimates of revenue and expenditure for 1975 -76 will show , sir, the Province could not allocate any substantially greater amount of extra rev enues to municipalities on an unconditional basis this year unless we were to raise our own tax rates substantial ly . Then I l

April 24, 1975 1669 BUOO ET ADDRESS (MR. SCHREYER cont'd) ..... ironically the greatest advocates of more transf er , always more transfer to municipalit ies , would be the same ones to say that we were having high pro vincial taxes. So that kind of nonsense , sir , has to be stopped in its trac ks, and we have a proposal tonight that I beli eve will do just that .

For example , to rai se, say , $50 mil lion more to have it available for transfer to municipalities would require a personal income tax increase of about 9 percentage points - over 20 perce nt more than the current 42 .5 perc ent rate - or a sales tax increase of close to 2 percentage points , or, to put it another wa y, to increase the sales tax in Manitoba two points, from five up to seven, would be a 40 percent increase . And that 's how most people would charact erize it .

Now, we have been able to avoid �ncreasing the sales tax in Manitoba to 7 perc entage points, altho ugh they did so in Onta rio , They have reduced it in Ontario now back to five , but announced that it will go up to seven again next year . Alberta, sir , is the only province in Ca nada that is quite comparable in oil production with .. Mr. Speak er, there is another jurisdiction in this world that ha s no problem in balancing its budget and that 's Saudi Ara bia. So, Mr . Speak er , ... It is significant to know, sir-- (Inter jection s):--I often th ink, Mr .

Speake r, that it would be indeed very plea sant to be a Minister of Finance in a jurisdiction such as Alber ta or Algeria, or even one of the Em irat es. But in any case-- (Interjections) --We ll, Mr . Speake r, that may be entirely true that it is not a problem in the U .s .s.R •• It is, howev er, somewhat of a problem in the United State s, in Ont ario , and in Manitoba . I readily admit that. We share more of our problems with Ont ario than I would think with either Alberta or any of th ese other places that my honou rable friend ment ioned .

In any case , sir , an alternative which has been suggested would be for the province to make all these extra funds available to the municipalities over and above the extra funds already made availab le, by means of the Province cu tting its own services to the people of Man itoba . Some have argued that this could be accomplished by eliminating the Propert y Tax Cr edit Plan and tran sferri ng that entire amo unt directly to municipal government . Our government has rejec ted this suggestion because it would mean an end to property tax relief that is ba sed on the ability -to-pay principle .

In additi on, it would mea n that tenants - who pay proper ty taxes indirectly through their rents - would no longer receive direct benefits . But mist import ant, sir , it would me an an end to the counterveil ing applic ation of prope rty tax re lie that is calib rated to income , and that, sir, we are just not prepared to do . Not now, not e er .

And it should be remembered as well that because the extra funds for any new large-scale uncondi• tional tran sfer would be rai sed by the Provincial Government, the municipalities would be relieved of a significant additional measure of responsibil ity for their own financial operation s.

In this connection , it is worth noting , not so ironically, that many munici palities have expressed concern about loss of autonomy thro ugh increased provincial grants , while the Province has expressed the view that , so far as is practicab le, the juri sdiction which spends cert ain funds should have the responsibilit y for ra ising those funds . Now we don't say this in any dogmatic, ironclad fa shion , sir , but we do say that for the most part that sho:uld be the case . Tha t should be the rea lity for the most par t, not in a minor way .

However, the Province does not oppose the general concept of a self -regulating or adjusting formula for "growth tax" sharing with municipaliti es. Indeed, why do we oppose it since it was here in Manitoba in 1973 that that concept was initiated in Canadian federa l, pro vincia l, municipal finance ?

But , in the light of the considerations I have outlined , our government beli eves that any "growth tax" sharing concept, in order to provide a sati sfactor y long-term solution to muni cipal finance problem s, (1 ) must be gradual in the extent of further changes in the formula; and (2) must be visible in its connection with the level of government that spends the funds .

In line with the principles of fiscal re sponsibility and acco untabil ity , the Province of Manitoba has made it clear in discussions with municipal repre sentative s th at, with the con currence in principle of our government, we would be prepared to consider introducing enabling legislation under which the mun ic ipalities would share directly in growth taxes by levying such taxes them selves , under authorit y transfe rred from the provi ncia l crown .

Because it is obvious that any new provi ncia l/municipal revenue-shari ng plan should apply to all municipalities in Manitoba, our government has decided to extend this offer of growth tax sharing to all municipal governments in a formal way at this time . Starting in 197 6 , and until further notice, the Provinc ial Government will be prepared to consider entering into arra ngements with municipal governments under which the Province

1670 April 24 , 1975 BUDGET ADDRESS (MR . SCHRE YE R cont'd) ... •. would act as an agent to collect special municipal growth taxes throughout Manitoba , if requested to do so by a major number of municipaliti es.

Under this sys tem , municipally-set tax rates would be applied on top of existing pro vincial tax rates, and the entire amount of extra revenue would be returned to the municipali ties, obviously with "no strings attached ." This proposed system of growth tax sharing would be unique and it would represent a further major developme nt for municipalities which have argued for greater access in the growth tax field in order to help them reduce the rate of increase in their dependency on property tax . --(Interjection)-- Further details ...

I can tell by that observation by the honour able member that he has not yet quite com prehended the method by which this will work. There will not be a fragmenta tion, sir , of rates of sales tax in this province . That is nothow it will work. So my honourable friend will have to be patient for another two minutes while this un folds . Further details concerning the adminis tration of the new growth tax sharing arrange ment will be included as an appendix to this addres s.

Our government believes that this growth tax sharing proposal represents the basis for major and fundamental reform of local government financing if the municipalities wish to pursue that route . It will provide Manitoba municipalities with a means of introducing greater equity into their own tax structures, if they really wish to, while at the same time maintain ing their autonomy and ensuring their accountability to their taxpayer s.

As a start towards this new tax -sharing plan , and unless a majority of municipalities request a larger amount, our government proposes to abate the provincial personal income tax rate by two full percentage points , and the corporation income tax rate by one percentage point , and to tra�sfer these tax points and revenues directly to the municipal governments , to be paid to them on the partially -equalized basis that the per capita formula inherently is.

This new provincial-municipal income tax-s haring plan will be reflecte d on the 1975 tax retur ns, to be filed by taxpayers next winter and spring , and the revenues yielded by the municipal tax points would replace the existing unconditional grant formula beginning January 1, 197 6. Under this plan , the effective provincial per sonal income tax rate will be 40 .5 perc ent of "basic federal tax" and the effective general provincial corporation income tax rate would become 12 percent of taxable corporate income .

On the basis of current estimat es, the tax room which we propose to vacate to the municipalities should produce next year about $1 6.8 million, or close to $17 .0 0 per capita for their use in 1976 . We will not know the exact amount to the penny of cqurse , unti I next year, when the revenue will be turned over to them . If the municipalities wis hed to raise their income tax rates in 197 6 or in future yea rs, or if they wis hed to levy other taxes, they would, of course , be free to do so under the con sensus arrangements I have already referred to.

Giving the municipalities direct access to the growth tax fields in this way would make it possible for them - if they choose - to change their property tax trend projections and to ass ure themselves of revenues wh ich are likely to grow at a faster rate . But the decision making, dis cret ionary judgment is with them , the connection is with them , the accountability is with them . They have the flex ibility and they will have the accountability, and that is how it should be in the best of all democratic arrangements .

We will bear responsibility for those prog ram s which we have to carry out, for which we have to ask for the supplying of ways and means to Her Majesty . Of course, the province will continue to supplement the municipalit ies ' tax revenues with substantial direct conditional grants and indirect assi stance from our own general revenue s, just as we have done in the past over many years and increasingly each year , over many year s, but thi s would continue to be of a programmatic nature, Mr. Speak er .

We are prepared to make a firm commitment to municipalities and school divis ions that, in future years, the sum total of our direct and indirect assi stance to them , and to local ratepayers in that sense will grow at a rate which is commensurate with the average rate of growth of provincial current account expenditures as calculated on a ten-year averaging bas is . We are also prepared to consider sharing equally with local government and school divisions the proceeds of any increased generai unconditional income tax abatements from the

t April 24, 1975 167 1 BUDGET ADDRESS (MR . SCHREYER cont 'd) .•..• Federal Government which may take place in the future , pro vided , of course, that such abatements are not transferred to the provinces to replace revenues under some federal program that is being transferred to provincial shoulders so with that caveat, the general princ iple appli es .

While the measures I have announced tonight will go a long way towards permitting funda mental reform in provincial-local financing in Manitoba , it is quite clear that the pace of this reform will depend , to quite a degree, on the willing ness of the Federal Government to pro vide increased support for our efforts. For this reason, I am hopeful that municipal repre sentatives will work closely with members of our government in the continuing efforts of all provinces in Canada to achieve a more equitable national re venue sharing through our current tri -level consultative machinery in Ottawa .

In addition , our government would welcome repre sentations from individual municipali ties, from municipal groups for their advice , or from other interested parties on proposals for improving the property tax or any other possible source of local re venue . Of cour se, major change , sir , in the property tax structure cannot be implem ented in an overnight way . Our tax credit plan remains the best - and the fairest - mechanism for pro viding immediate property tax relief.

For this reason, our government will be proposing a further increase in benefits under the Manitoba Property Tax Credit Plan for 19 75 . . . . . . continued on next page

1672 April 24 , 1975 BUDGET ADDRESS (MR. SC HREY ER cont'

d) Our accounts for the fiscal year that just ended 24 days ago have only been closed for mally for four days and, for this reason, it is not possible as yet to provide precise infor mation with re spect to our year- end position. Howev er, the "prel iminary final" figures which are available indicate that a surplus of $45 mill ion from the year just closed can be carr ied forward into the prese nt fiscal year under the authority of the Financial Ad ministration Act, thereby reducing new revenue require ments for the current year.

The surplus in 1974 /75 re sulted primarily from increases in payments to the provinces under the Fed eral-P ro vincial Fi scal Arrangements Act and from the overall buoyancy of the provincial econom y last year which did generate more in cor poration tax and income tax than was estimate d some 15 months ago. As Member s may be aware, our revenues under the Fiscal Ar ra ngements Act are estimated for us around the beginning of each year by the Gove rrr ment of Canada who are the collecting agents in this res pect.

Last year, as in the past few years, indeed , the Federal Gov ernment raised certain of its estimates after our budget had been presented to the House and 'increased our payments accordingly. Revenues in exc ess of estimates wer e recei ved from other sources as well , but there were also a number of offsets, including some consi de rably less reve nue than was expected in mining royalties because of a t sharp down-turn in the latter par t of 1974 in metal prices in the world markets.

If any res idual surplus rev enues should remain after the accounts for 1974/75 are final ize d, they wil l, as In the past, be set aside as a contin gency reserve, in accordanc e with the Special Municipal and General Em ergency Fund Act. This would be for possible use in im plem enting job-c reation programs later this year should counter- cyclical stimulation of the economy be needed. With re spect to Main Expenditures , Mr. Speaker , some weeks ago we tabled in the House our governmen t' s Main Estimates of Curren t Expenditures for the 197 5 /76 fis �al year.

As I noted at the time, these estima te s, which total $1 . 009 billion, rep rbsent the results of a rigorous and Intensive evalu ation of priorities and program effectiveness. Durin g our internal estimates review, initial departmental spending re quests were cut substantially and relatively few increases beyond the obvious salary and mater ial cost esca lations were pe rmi t ted. Of course, these cost es cala tion factors also require higher levels of financing for exist ing health and education programs and for local governm ents support.

Des pite general cost increases, however , care ful planning has made it possible to corr centrate avail abl e resources on such measures as : additional property tax relief through the Tax Credit, through unconditional municipal grants; increased assis tance to school div is ions under the Foundation Pr ogram and to the universities through the Universities Gr ants Com mission. Mr.

Speaker, I might say in that connection that the increase in Gr ants to the Universities Gr ants Com mis sion is increase d by somethin g in the order of $1 6 or $1 7 million dollars in one year and constitutes an increase which is gr eater than that of the provincial budget as a whole. That does not mean that there are no problems , but let there be no mistake as to the level of funding, Mr. Speaker. I should als o mention, Mr.

Speak er, financing has had to be incre ase d for improved health and social de ve lopment servi ces, including expanded funding for our governm ent' s initiatives in the area of nur sing home care, medical dr ug assis tan ce , day care, and the special supplement for the elderly . De tailed information on the Main Estimates is be ing provided by the Ministers resporr sible in Co mmittee of Supply, which has been going on for some few weeks now and will be going on in the weeks ahead. On e additional point should probably be mentioned here.

As members are aware, the Main Estimates contained an amount of $2 3 million in respe ct of general salary and cost of living increases. Th is figure is, of course, subj ect to change naturally, depending on the out come of curr ent contract negotiations.

I do not want to comment on the negotiat ions other than to emphasize my concern about the need for general res ponsibility in all secto rs of the economy, and the desirability, in the case of wage negotiat ions, of considering more equitable forms of adjustment than a sim plistic, uniform perc entage settlem ent applicable to people at differen t income levels. At the co nclusion of the address tonight, I will table our Governmen t's Estimate of Re venues for the 1975/ 76 fiscal year.

April 24 , 1975 1673 BUDGET ADDRESS (MR. SC HR EYE R cont'

d) I am happy , yes indeed , happy to announce that, despite increas ing expenditures and antic ipated declines in some revenues, ther e will be no increase in the major per sonal income tax rate or the sales tax rate in Manitoba in 1975. Mr. Speaker, everythin g is relative. What is good news is not necessarily good news to my honourab le friends opposite. But in any case, as I indic ated earl ier, our government pr oposes to reduce its general income tax rates so that the municipalities can have dir ect acc ess to these growth taxes to that extent, as they have appare ntly requested.

La st year, when it app eared that pr ovinci al revenues from oil were likely to Increase as a result of higher prices and a new oil roya lty system, which we introduced here a year ago, the P rovlnclal Government undertook to pass on all of these adde d revenues to consumers of gasoline and motive fuel in the province.

And at that time, accordingly, since we had some $6 million dollars or so in extra re venue as a result of a higher royalty on oil because of a price increase on oil that we didn't ask for nor want, we passed all of that money on ha ck to the general motorists in the provinc e, throu gh a 2 cent reduction in the gas tax. --(In te rjection) We ll, Mr. Speaker ... MR. SPEAKER: Order please. MR. SCHREYER: My noisy friend obviously is not aware of the fact that outside of the two oil produ ci ng provinces of Alb erta and Sa skatchewan, that we have the lowest gasoline and moti ve fuel tax ra te in Canada.

Newfoundla nd , New Brunswick, Nova Scot ia, Pr ince Edward Isla nd, Quebec , Ontario, we had a lower motive fuel and gasoline tax than any of those, and I wonder if my honourable friends remember the fact that our gasoline and motive fuel tax in Manitoba has not been increased by this government in six years, that in fact it was 2 cents less per gallon in the past twelve months than ten years ago when they were in off ice? What was their excuse, because everything was le ss inflationary then, what were they doing with th ose funds ? What did they need it for? In any ca se, Mr.

Speaker , may I he allow ed to indi cate the numbers involved. So what we have pr oposed to do, sir, given the fact that we reduced the gasoline and diesel fuel tax by two ce nts last year from 17 cents a gallon where it had been for many many years down to 15 cents a gallon, and the same th ing, 2 cents redu ction from 20 cents a gallon down to 18 cents a gallon on diesel fuel last year.

Since that time, a number of the sm aller oil produc ers in our province have encountered problems due to Federal dis allowance of royalties or economic rent as a legitima te deductib le expense, as well as they have experi enc ed other cost increases, and some oil produ cers, who ar e produc ing at only a few bar rel s a day, are facing the pro spect of very mar ginal operations. In t.hese cir cu msta nces, our Governm ent has decided that it would be app ropriate to make cer tain adjust ments in our oil royalty

schedule so as to per mit small well. operators to retain more of their earnings to mee t these probl em s. These adjus tments may re sult in a reduction in our oil royalty colle ctions of appr oximately $2 million this year. Th e result of this drop in oil royal ties is a reduction in the am ount of extra funds avail able to pass on to gasoline and motive fuel users. This will necessitate a withdrawal of one ce nt per gallon of last year's reduction for each of these fuels effective May 19th, Mr. Speaker. Th is am ount, --(In ter jection)-- Mr.

Speaker, we didn't intend to make money on that increase in oil hut we don't intend it to cost us any money either. I suppose a government could have taken the extra royal ties and taken it into general revenue or we could have taken th ose extra royalti es and put them back by way of a redu ction in the gasoline and motive fuel tax. We ch ose to do the latte r. I rep eat , we didn' t ask for those price increases, but we were not about to let all of that windfall price incre ase go on in some inaccou ntable way to somebody else' s coffer. Ou r course of action is very rational.

Now that we are decreasin g some of the royalty, the loss in revenue resulting therefrom neces sitates withdrawal of one cent, you ca n't very well with draw half a cent, of one ce nt per gallon in the tax. And that is effective May 19th. And I will be very ca ndid , Mr. Spea ker , this am ount which is about one-third ce nt pe r gallon more than our expected revenue loss will go into consolidated revenue of the province.

Some of that one-third cent, sir, will be appl ied to further increases in support for public transit , beyond the increased support for publ ic transit we have already brought into being in recent years. We do not apolo gize for taking steps to give greater support for public transit, Mr. Speaker, something for which my honour able friends had no sympathy , they were callously

1674 April 24 , 1975 BUDGET ADDRESS (MR. SCHREYER cont'd) •...• disregarding, and I think to the disadvantage of the good husbandry of non-renewable resources in our country for this and future generations. As has been announced last January by my collea gue the Minister responsible for the Public Ins urance Corporation, the additional charge of two ce nts per gallon on gas and motive fuel tax rates will also take effect May 19th.

Thi s am ount will be transferred to the Manitoba Public Ins urance Corporation in proportion to th ose revenues derived from two cents which are attributable to the highway use of motor vehicles. The amount which is related to off highway consumption of gasoline and motive fuel, that amount which is admittedly minor, but that amount nevertheless will go, not to Autopac, but to the consolidated revenues of the province. MR. ENNS: How much next year ? MR. SC HREYER: It is estimated - well , Mr.

Speaker, my friend says "how much next year" and I say to him that I invite him now, I invite hi m now to keep his eyes open, not next year, two months from now, two months from now when the insurance industry of Canada will be increasing their rates in order to recoup a quarter billi on dollar loss by the private . (cla pping- inaudible) MR. ENNS: How much next year ? Eight cents a gallon next year. MR. SC HREYER : Mr. Speaker , with the way in which the private auto insurance industry is operating in the other provinces of Ca nada, the way in which the private insurance com panies are operating in Canada ...

MR. SPEAKER: Order please. Order please. OR DER !! Would you kindly settle down. Order! All of you. I wish the members would conduct themselves like legislators. When I ask for Order I think I'm entitled to that courtesy. Let me suggest there are seven more days of this particular debate , everyone will have the opportunity to have his say. Let us at least have the courtesy to hear each other out. The Honourable Firs t Minister has the floor now. MR. SCHREYER: Mr.

Speaker, sir, in order to make it easier for you to maintain decorum in the Cha mber, I will desist from any further comment about the private automobile insurance industry in Ca nada. I would only say that I am looking forward to see what happens in June 1975 when the quarter bill ion dollar deficit in Ca nadian private automobile insurance will have to be accounted for somehow, some way. In any case, Mr.

Speaker, it is esti mated that the funds transferred for the remainder of the current year for purposes that I have just mentioned will be some $4. 7 mfllion and that in a full annualized 12- month period, the amo unt will be around 6. 2 mil lion. Ou r government believes that these adjustments represent a fair and logical method of apportioning some of the costs of public automobile insurance among those who are covered by that insurance. Similar adjustments have been made in Sa skatchewan and British Columbi a, both of which also operate public automobile Insurance programs.

It is, we feel, a partial substitute for the previous dependency on arbitrary ratings such as "all purpose, " "preferred," and so on, in adjusting premiums to take acco unt of frequency of dr iving and therefore as some measure of accident exposure.

Since persons who drive more than an average amount each year have a greater chance, statistically speaking, of being involved in an accident, it seems just as reasonable to have the categorization of "preferred," and "all purpose, " as traditionally existed to have that now replaced at least in part by some reliance on motive fuel consumption as a measure of amount of driving for insurance purposes. As a result of these changes, in any case, Mr.

Speaker, the Manitoba gas tax rate, combined with the two cent insurance charge, will be 18 cents a gallon - one cent more than it was for many many years before ·last yea r's reduction, and one cent less than the current rate in Ontario. The combined rate on motive fuel or diesel fuel, as we would say, will be 21 ce nts, also one cent more than it was for many many years before last yea r's reduction, and four cents less per gallon than the present rate in Ontario.

For persons who use their cars for business purposes, and for commercial motor vehicle operators, such as truckers, the added fuel taxes involved in these adjustments would be in come tax deductible, in any case, in the normal way. In conjunction with the adjustments to the general gasoline tax rate, an amendment will al so be proposed, at the appropriate time following the Budget Address, to increase by one cent per gallon the rate of tax on aviation fuel from two ceDts per gallon to three cents per gallon. This change, which is expected to result in a revenue increase of about $400 , 000 or 4/ 10ths of t

t t April 24 , 1975 1675 BUDGET ADDRESS (MR. SC HRE YE R cont'd) .... . one million, will brirg our avia tion fuel ra te into line with the rates now applied by our neighbouring provinces. The effective date of this adjust ment will also be May 19th. A further change will be mad e with respe ct to the use of purple diesel fuel in farm trucks.

And I invite my honourabl e friend from Woodlan ds, I should say Lakeside, to take note that it will be possible as of May 19th to use tax- free purpl e fuel in farm trucks which have a two- axle configuration, and which posses s a manufac turers' "GBW'' (Gross Body Weight) ratin g of LBO O or equiva lent of up to 34, 000 pounds maxim um. --( Interjection )-- This increase in the exemption . . • No, Mr.

Speak er , in truth this is intended to clarif y that the exemption which we introduced last year, for the first time last year to provide an exemption on farm trucks with respect to tax-free purple fuel which was supposed to be to a maximum of 28 , 000 pou nds, we are now incr easing that exemption to 34 , OOO"pounds but, sir, that is cla rified and that is the basis upon which it will be ad ministered .

Another measure designed to assist farmers and fishermen as well will be an exemption under which - I should say as an asi de to the Honoura ble Member for Lakeside th � t there was some confusion or misunder standing that this tax-free far m truck, tax- free fuel treat ment applied to tandems: it never appl ied to tan dems, never, and it was not intended to apply to tandems last year, so it really ought not to be regarded as some impingeme nt on the operations of the licensed franchi se operators, truckers in this province.

Another mea sure designed to assist farmers and fishermen as well , will be an exemption under the Retail Sales Tax Act for returnab le containers purchase d by fa rmer s and fishermen and by co-operative associations thereof or by similar organizations used. for transp orting agricultural food produc ts , agricul tural products and fish dir ectly from the producer. The effective da te of this exemption will be June 1, or Royal Assent, whichever is earlier. -- (Interject ion)-- Well this applies, Mr. Speaker, to honey container s, to milk cans, it applies to food container s.

My honoura ble frie nd should have no difficulty in understa nding what a returna ble container used in food pro ductio n is. Bu t if they would like 1 we will send them the detailed regulations. Le ss than two weeks ago, my colleague, the Minister of Mines, Resources and Environ mental Management, tabled our government's new Mining Royalty legislation in the House.

We believe that the new royalty system - by recognizing the need for a reas onab le return on invest ment, and the fluctuations that can occur from time to time in the financ ial positions of the mining companies, will be fairer to the companies involved, while at the same time, insuring that Manitobans will continue to receive mo re equitable returns from their mineral re sources than wa s the case before our Gover nment initia ted its reform of mineral taxation in the first place.

Of cour se, the general situation with respect to resource taxation in Ca nada still remains somewhat uncertain in view of the continuing disagree ment over general resource revenue sharing issues, the pricing of oil and natural gas, disa greement on that, and on the Fede ral Government 's decisi on to disallow the deductibil ity as an expense of provincial royalties in calcu lating mining and oil company income tax liabilities. In his November 18 , 1974 budget, the Federal Minister, Mr.

Turner said and I quote: "We have ch osen to disallow the dedu ction of all these levies to make room for the provinces by giving additional tax abatemen t points to the province. In this way, provincial taxes and charges and the federal taxes will eac h be di screet and visible deci sions which each can make in light of what they know the other is doing, giving full recognition to the needs of the industries. " Ou r government, as indeed all or alm ost all provincial governments in Ca nada, were strongly opposed to this federal non-d eductibil ity move.

There are we ad mit, many aspects of tax allowable deductions which ought not to be deductible but the charge of economic rent or royalty is not one of them, and that has been the basis upon which the disa greement has been so strongly expressed. And in any cas e the fact remains the legislation is formally in effect, as of las t month, when it finally passed through parlia ment, in the month of March .

As the Federal Minister noted in his November budget that legislation provides for an addi tional cor poration income tax abatement to the provinces in respe ct to the pro duction profits of mining and oil companies. Our government will therefore pr opose an am endment to re flect this abat e ment .fn our pr ovinc e' s corporation income tax legislation effective January 1 , 1975.

1676 April 24 , 1975 BUDGET ADDRESS (MR. SC HREYE R cont'

d) Effective on the same date, we propose to imple ment a system for compensating or re mitting to oil and mining companies the additional provincial income tax that they will be re quired to pay as a resu lt of the disallowance of provincial royalties as deductible expenses by the Go vernment of Canada. If it becomes a little confused , Mr. Speaker, it really isn't.

For a mining company, the compensation formula will be applied by quantifying for com pensation or re mission purposes those extra funds that are collected, that are generated by the additional provincia l income tax payable as a result of non-deductibility, even non-deduct� ible as against the pro vincial points themselves, up to a limit determined in relation to the total provincial tax payable by that company under the 15 additional abatement points.

With respect to oil production, since many producers are indiv iduals rather than corporations, and since the provincial oil royalties and taxes do not take costs directly into account as our new refined mining royalties

schedule does, a somewhat different compensation formula is req uired. Accordingly, for an oil producer, while the compensation formula will also be applied in res pect of the entire amount of additional provincial income tax payable as a result of non deductibility, the li mit of compensation or remission will be the amount of the extra yield on the entire 25 poin ts that is due to non-deductibility. Steps are now under way to establish a system for administering this compensation system in co- operation with the federal Department of National Revenue.

Legislation to auth orize remi ssions to min ing and oil companies under these compensation and remiss ion arrange ments will be introduced in the near future. A number of resource extraction companies in Manitoba have not paid income tax for quite some number of years as a result of historic tax pro visions in our national income tax laws that allow for exploration and depletion deductions that are actually greater than the actual costs incurred.

If such companies still do not have any income tax to pay as a result of the federal non-deductibility provisions, then, of cour se, there is no need, nor should there be any compensation or remission to such companies. But for companies, mining companies or oil companies that do pay income tax then these federal measures will have an impact, and our Manitoba compen sation plan should help to offset the unintended impact of extra provincial income taxes which res ult and which we didn't ask for.

On the ass umption that the revenues foregone through our compensation plan will , in most cases , be more or less equal in aggregate to the revenues that we coll ect under this somewhat complex arrangement, we are not making any special allowance in our revenue estimates for 1975/ 76. The net impact of this compensa tion system on most resource oper ators will allow for the complete deductibility of royalties and other provincial resource taxes from taxable income for purposes of provincial corporate income tax calculation purposes.

It should be noted here that if the Federal Government were, in the future - and I am not trying to start any rumours, Mr. Speaker, but if it should happen and I believe there is some possibili ty that it will happen to some extent, that the Fe deral Government may allow some deductibility of re source royalties up to a certain level - then obviously we and any other pro vince would have to review our plan and make commensu rate or subsequential alterations. The same would be true, of course, in all those other pro vinces where compensation plans have been introduced in the past 12 months.

Ou r government will also propose some further changes with respect to the taxation of oil co mpanies this year. As I referred quickly some time back, a reduced but graduated or progr essive royalty

schedule will be introduced, very soon now, after this budget, with respect to oil companies so as to bring about lower mill rates applicable to small wells with low daily output of oil. I see the Member for Virden is not here but I' m sure he will be in terested. We believe, sir, that a somewhat lower rate

schedule at levels of output of 20 barrels per day or less is desirable and justifiable, and in large part neces sitated for re asons I have already gone into with respect to double impact of taxation because of federal non de ductibility, etc. , etc. For a number of years, questions have been raised as to the adequacy of certain of the exemptions per mitted under our province's succession duty legislation.

At the time that this legislation was introduce d in 1972, our government belie ved that the $1 50 , 000 exemption for "preferred beneficiaries" or children, and the supplementary exemption of $50, 000 extra for a total of $2 00 , 000 for surviving spouses, in respect of property passi ng to them, was

April 24, 1975 1677 BUDGET ADDRESS (MR. SCHREYER cont'd) ..... suffici ent to ensure that only persons in re c eipt of relatively large bequests or estates would be subject to tax. Of cour se, it is to be repeated that this taxation starts only at the point where all debts and mortgages are cleared off first and the tax applies only to the next cle ar value of property that passes in estate or on succession. Still, since the 1972 legislation, inflation has affected the value of many assets.

To take these changes into acc ount, we propo se, effec tive at midnight tonight, to raise the exemption for preferre d beneficiaries to $200 ,000. This change means that the property pas sing to a spouse will be exempt up to $250, 000. And I know, Mr. Speaker , that there will be those who say that that is not enough, but I say, sir, indeed I believe every single one of my collea gues believes , that a quarter of a million dollars of assets passing untaxed be for e the first penny of tax starts on the 300,000 and 35 0,000 is indeed providing, in my opinion, more than enough to those who come behind.

It is estima ted that this measure will reduce succession duty re v enues by approxi mately $8 00 , 000 over the full year. Ov erall , it is estimated that provincial reve nues for 1975/76 fiscal year , which I will table immediately at the end of thi s address this evening, will be $1 ,020, 996, 000. As I pointed out earl ier , this total includes an amount of $45 million in respect of surplus funds ijeing car rie d forw ard from last year into this upcom ing fiscal year. At th� conclusion tonight, I will al so table Supplementa � y Estimates of spending for the 1975/ 76 fiscal year.

Most of these expenditur es, sir, are in the nature of tran sfer payments to individuals or municipalities or to the reliev ing of program costs to municipalities. Th e estimates include an amount of $29 2,000 for the Department that is ch arged with the responsibili ty of the Wild Fur Pr ogram for purposes of carrying out a new co st- sharing agree ment with the Gover nment of Canada signed only a matter of several days ago.

The Supplem entary Estimates also include an amount of $49 0,000 for the Depart ment of Health and Social De velopm ent to cover increased payments to the City of Winnipeg in re spect of the pr ovince's share of its health unit or health department costs. This amount is intended to place the provin ce's contribution to the Ci ty of Winnipeg's health programming on a basis which is directly comparable to that of any other municipal health unit operation in Manitoba.

As of this year, the province will no longer require the old one-third cost sharing by most muni cipalities in the co st of public health unit operations. This may not be a large item, sir, but it should be noted in pass ing that historically for year s, some municipalit ies we�e expected to shoulder one-third of the cost of health units and many munici palities would not take that on their shoulders, and this unsati sfactory state of ::: ffairs went on year after year.

So in order . to get rid of that unfairness, if you like, the province is accordingly assu ming the co st of all public health unit operations throu ghout rural Manitoba as well as most of the city. The province wil l also be proceeding with plans to eli minate payments by munifipalities to the pr ovi ncial life- saving and diabetic medicines program and will no longer requ f re owner 's equity and municipal payments with res pect to future hospital construction and per sonal care homes. Mr.

SPeaker, after consideration of the public library situation and needs in our province and following a review of our financial support to libraries which I say somew hat in a blushing or embarr assed way, has remained substantially unchanged for the past 20 year s, our Govern ment has decided to increase the gr ant program to help meet increasin g costs of improved library services for more Manitobans.

The new assistance wlll be provided under a formula which will make available $2. 00 per capita for annual oper ating costs for librades serving 10 ,000 or more people, up to 50% of the costs of operating those libraries. The 10, 000 popu lation figur e can be for a municipal ity or Local Govern ment District with that number of residents, or a group of municipal ities , whose total population exceeds or re aches this number. Regula tions and detail for this formula are now being developed by the Depar tm ent of Tourism and Cu ltural Affairs, which is res ponsi ble for this service.

For those municipalities or Local Go vernme nt Districts engaged alr eady in library ser vices under the old form ula, the option is open to them to remain on the old formula if their local circum stance and population shows them that it is of advantage to stay with the old for mula as an option. An amount of $1 million has been inclu ded in the Supplementary Estima tes to cover one half of the annual cost of this plan, which will take effect on July 1, and with respe ct to the Parkland Re gional Library Se rvice, arra ngements have been made to continue that service

16 78 April 24, 19 75 BUDGET ADDRESS (MR. SCHREYER cont'd) ..•.• until the end of this cal end ar year, following which the Pa rkland region will come under the same formula as any other region of Manitoba. Th e Supplementary Estimates also provide for an amount of $3 30, 000 for the Department of Educ ation to cover special grants to northern school divisio ns rela ted to the distance factor costs of food and lodgin g for teachers in the North.

The extra grants will be set at $400 per autho rized teacher for school divisions and districts between the 53rd and 56th parallels, and at $90 0 per autho rized teacher for school divisions north of latitude 56°. This additional ass istance will help offset a portion of the school tax increases in these divi sions in 1975.

New income tax revenue information for 1974/75 which has become available to us in rec ent months, indi cates that an adjustment payment can be made to municipaliti es in re spect of the unconditional grant formula for this cale ndar year , so provision has been made in the Supple mentary Estimates for an amount of $1 million to cover this adjust ment or inter im progress payment. Th e $1 million adjus tment will update the 1975 grants under the present formula in anticipation of the proposed transfer of personal and corporation income tax points to the municipalities next year.

As a re sult of all this, unconditional grants to municipalities this year will be approxi- mately $1 3. 66 per capita, and with this adjustment it is po ssible to say that grants to munici- ' palities will be 30 pe rcent higher than last year. This should ena ble all municipalities in the province to reduc e, by commensurate degree, their property tax re quirem ents for this year. Earlier tonight -- (Interjec tion)-- Yes, the Minister .•. MR. CHAIRMAN: Order please. Order please. Again I appeal to the honourable membe rs ... MR. SCHREYER: Mr.

Speaker , we have good hi storians on this side of the House and I am advised that the per capita unconditional grants paid by the province to help munic ipalities stood at a grand total of $3. 00 pe r capita for the decade of the 1960's. In 1969 , as it were, as a kind of de ath bed repentanc e, they incr eased it to eight and they never passe d it through this Leg isl ature. Mr. Speaker , earlier tonight I indic ated that our gover nment plans to increase benefits un der our property tax cre dit plan for 1975.

I am plea sed to announc e that maximum property tax credi t benefits for the current year will now be raised to $3 00. The new general minimum be nefit will be raised to $1 75. What this means, sir , is that for an average home asses sed at $6, 000 , and indeed the avera ge home in the municipal ity of Winnipeg is aro und $6,6 00, so say for round and easier figur ing, for an average home assessed at $6, 000 or $7, 00 0, the $3 00 maximum property tax cr edit will be equival ent to a property tax reduction of 45 to 50 mills.

The $175 general minimum credit will be reflected on the municipal property tax bills of eligible resid ent homeowners this summer. Homeown ers of average or lower income are entit led to further be nefits up to the new $300 maximum and will receive this through the in come tax return in the spring of 1976. The same will apply, nat urally, in sofar as tenants are concerne d. Re nters who are eligible for property tax credi ts for 1975 will , as in past years, be able to claim the enti re amount of their . entitlement up to the new $300 maximum by filing income tax returns in the sprin g of 1976 as well.

Th ese increase d benefits will bring the total annual cost ... Mr. Speaker, I must inter rupt in mid- sentence beca use I hear the Member for Fort Garry say that we are doing this because of some elections. But you see, Mr. Speaker, history proves that my honourable friends waited ei ght years at $3. 00 per capita, and then two months before the election of 1969 they brought in le gisla tion to change it all at once. And they never pass ed it. The y never got to pass it, sir.

Th ese incr eased bene fits will bring the tota l annual cost of our Property Tax Credi t Plan - and I think it 's worth pausing to reflect - the total ben efits of the Property Tax Cre dit Pla n ca librated to income, and tha t's really the most importa nt point , but the second most important point is that it" will aggregate $7 5. 5 million in muni cipal tax relief, an increase of $1 3 million over last ye ar alone.

An extra $4. 5 million will be required through the Supple mentary Esti mates which we are tabling this evening to cover the reside nt homeowner advance under the program for this year, and the balance will not be required until our next year financial acco unt s.

i April 24 , 197 5 1679 BUDGE T ADDRESS (MR. SC HREYE R cont'

d) As I said earlie r , our gover nme nt belie ves that the Property_ Tax Cre dit Pl an is the most effective system open to us under the National Tax Coll ection Agreement for provid ing municipal and sc hool property tax relief dire ctly to homeowner s, renters and far mers. Perhaps I should apologi ze for repeating that, sir , but that is really its cardinal virtue. It is so important that repetition should not be apologized for. The old Jesuit saying goes that "re petition is the mother of learning" and that Is certa inly true so far as my honourable friends opposite are con cerne d.

Ev en more important, it is the most equitable system for providin g this relie f. It guar antees that those families who have re latively lower incomes, including pensi oners on fixed Incomes and the "wor king poor ," will get the larger benefit s. It also guarantees substantial · tax re lie f to all other eligibl e property taxpayers and renters as well , with maximum benefits up to $50 more than last year. Well , sir, last year our govern ment introduced a second tax cre dit , or tax reduction program - it 's referred to as the Cos t of Liv ing Tax Cre dit Pl an.

It really Is intended to re late to changes in liv ing costs and what happens in the sales tax collection is the res ult of inflation. Unlike the Pr operty Tax Cre dit system, which relates benefits to property tax and taxabl e income, the Cost of Li ving Ta x Cr edit Plan provides for benefits which are determined by family si ze and taxable income. Of cour se, the Cost of Li ving Tax Cre dit Pl an is desig ned to provide tax relie f as well, Including specifically sales tax relie f. The formula takes family size into accou nt because that plays a large

part in deter mining how much sales tax is paid during the course of the year. It is worth pointi ng out that this tax credit in its very de sign should now help to minimize com plaints, which I know this governm ent has rec eived and the past governm ent I know recei ved , which have existed since the introduction of the sales tax in 1966 or '67 , that the sales tax exemption for children's clothing was jus t unfair because it didn't take into account differ ent child ren 's size.

Well, we believe that with the Cos t of Li ving Tax Cr edi t, the more children, the higher the tax credit, which is as it should be, because ther e's more clothing and articles purchase d of esse ntial kind for the family, that this goes a long way to offset and minimize the · root source or cause of that complaint. For 1975, our government proposes to increase total benefits available under this Cost of Li ving Tax Cr edit Pl an by almost 65% , from $1 4 million to $23 mil lion.

Under last year's plan, the formula for calculating Co st of Liv ing Tax Cre dit was 2'){,, the formula was two per cent of personal exemptions minus one perce nt of taxable income. Th is year, the formula will be , for each calibration as we require under the federal-pr ovincial Income Tax Colle ction Agreement , 3% of per sonal exemptions minus one percent of taxabl e income. As a result of this change in form ula, the maximum Cost of Li ving Ta x Cre dit available to a family of four will be about $1 27. For a married couple under age 65, it will be approxi mately $1 06.

For a pensioner it will be about $1 41. And all of this we beli eve is in accor danc e with what is needed to take acc ount of some of the impact of infl ation. These increased benefits will bring the government's total annual com mit ment to the Cos t of Living Tax Credit Plan up to $23 million and will extend the credits or benefits to high er up in the income range.

In future year s, as personal exemptions are indexed to grow at the same rate as the Consumer Price Ind ex, so then automatically the Cos t"of Liv ing Tax Credits will grow with that and be of benefit in offsetting the im pact of inflation at middle and lower income brackets.

To ensure that the new Cos t of Li ving Tax Cr edit has maximum im pact in terms of imme dia te tax savings and thus help to provide some stimuli to the economy this summer and fall , we anticipate making arra ngements with the Governme nt of Canada - there have been dis cussi ons alr eady - so that the 1975 Ta x Cr edit can be taken into account in the payroll deduction system startin g this summer. If these arrangements are agreed to , then many wage and salary earner s will start to get higher take-home pay as a result of the new system by July or August. So , Mr.

Speaker , to summarize in this respect, our provinc e's two tax cr edit plans will provide something very close to $1 00 million in di rect tax relief to Manitoba citize ns for 1975. Just to give some exemplification, Mr. Speaker , when the maximum benefits under the two plans are added together , a family of four can now be eligible for up to $427 in tax credit; J ' ' j i i I • l

1680 April 24 , 1975 BUDGET ADDRESS (MR. SCHREYER cont'd) •.••• a married couple can receive up to $406; a single person under 65 up to $3 56; and a single pensioner up to $441. Mr. Speaker, what is ... Well now, Mr. Speaker, we hear the words "Welfare. Welfare. " I know what my honourable friend opposite would do. He would certainly abolish this welfare, as he calls it, all $441, and he would take that $9 8 million that he would then� fore save, and he would bestow that on those who are in the 10, 15, 30, 40, 50, 60 thousand dollars per year range.

And I say to him that if that is the basis upon which he wants to take us on, then I say to him he's on. You're on. Not to mention the social and economic justi fication that lies behind it, but if he wants to ignore that too and take us on, I say to him he's on. We'll take you on. And I think that perhaps is one of the problems of my honourable friend, that none of us on this side had enough time to take him on adequately in 1973, but I think that perhaps that should be done. --(Interjections)-- Well , Mr. Speaker, one can't do very much in two and a half hours. I wish that there had been more time. Mr.

Speaker, I say that to my honourable friend. . . . . • continued on next page

t I April 24, 1975 1681 BUDGET ADDRES S (MR. SCH R EYER cont'

d) In total the Supplementary Estima tes for 19 75-76 come to $1 8 million, and of this amount $2 . 8 million will go to municipalities and school divisions, and $ 15 mill ion toward direct tax reduction to individuals. Mr. Speaker, it should be remembered that over 20 percent of our total curre nt expendi t;Ire will continue to go directly toward provincial and municipal tax relief measures in 19 75-76. It is now estimated, as I indicated, that our revenues for the year coming up will be $ 1. 020, 996, 000.

With ma in and supplem entary estimates at $1, 027 , 269, 800, we are budgeting therefore for a deficit on current accounts of $6.4 mill ion for 1975-76. This deficit, which represents about one half of one percent of our budgetary revenue, could have been elim inated through a small tax measure of one kind or another. That much is obvious. · However, our governm ent preferred not to propose doing so. We believe that a current account deficit represents an appropriate fiscal policy response to the prese nt economic situation, which is admittedly in a fast-swinging circumstance.

A year ago, the last thing our economy needed was stimulus. In 19 75, still it does not seem that there is need for stimulus beyond that which is already under way, but we cannot be completely sure and so we are keeping on the alert in the event that a rapid response capability is necessa ry it will be there. And in any case, in addition to this deficit on current accounts, the estimates of Ca pital Supply require ments, which will be tabled here very soon, will also have to be regarded in the light of counter cyclical policy as well.

At the conclusion of my addre ss tonight, I will be tabling estimates of capital requirements for the 1975 -76 fiscal year, totalling $5 44 mi llion. Our capital estimates for 19 75 -76 are clearly substantial. They are approxim ately $1 55 million less than the authority granted last year. As usual, the largest capital requirements a:'� for self-s ustaining programmi ng including new developments being undertaken by our utilities. Manitoba Hydro will require about $ 335. 8 million for 19 75- 76 in order to continue its efforts to expand the supply of renewable energy at comparatively low prices.

The Manitoba Telephone System will require capital authority of about $40. 6 million, and ·the Manitoba Housing and Renewal Corporation about $4 6 million. Approximately $62 mil lion will be requested for direct government programs including $40. 3 million for general purposes and $14 mil lion for developments in agriculture and other areas under agreement with the federal Departm ent of Regional Economic Expansion.

And of this amount, for my honourable friend's information, I believe they will be intereste d in knowing this allocation, of this amount about $3 50 million of the total capital requirements will be ob tained through public financial ma rkets and the remainder off market such as through the Canada Pension Plan and other off-market sources. So Mr. Speaker, sir, when I began my budget statement, I suggested that growing national economic pressures in 19 75 ma y well present our province with the most serious challenge it has faced in the years since our government took office.

I also indicated that we were determined to me et that challenge directly, to the limits of the resources available to us. The budgetary plans I have outlined tonight clearly reflect this determination. Through careful planning and deliberate restr aint, we have been able to keep down the over all growth in our budget, and I know those that make the superficial analy sis will say, "oh my, it's a billion dollars ," but I would invite them to look at this in the perspective of history and in the perspect ive of the compcnent parts of Cana dian confederation, in other words, all the other provinces. Mr.

Speaker, insofar as the debt on our future is concerned, which my honourable friend just referred to, he would be interested to know that the public debt as a perc entage, the direct provincial debt as a percentage of gross provincial product or wealth, as a percentage of the provincial budget, whichever of the two measure :--nents he wants to use, that the proportion of percentage is as low today as it was ten years ago. So what is my honourable friend com plaining about.

I have to admit, sir, that the direct provincial debt is much much hi!\her than it was in 1899, or even in 1961, but on the other hand, so is the output of goods and services in this prov ince much much hir�her today than in those years. But in any case, we believe, we are confident that the impa ct of this budget on our economy will be positive and pervasive. MR . SHERM AN: What about the Hydro debt ? MR . SC HR EYER: My honourable friend asked me "what about the hydro debt. " I would

1682 April 24, 1975 BUDG ET ADDR ESS (MR. SCHREYER cont'd) •..• certainl y be very tempted to reply right now, at the expense of .taking another five minutes .•. because Mr. Speaker, the fact of the matter is, that Manitoba has succee ded in persuing an optimum pace of constru ction and devel opment of a renewable energy res ource. There are those who may question whether or not it was advisable to proceed with the development of the Nelson River but that was a decisi on which was taken some time ago and which I have never poor-mouthed or second-gue ssed.

I believe that it is the best of prudent public policy to continue the. development of renewable hydro -electric energy despite all of those who would like to throw sand into the gears. Be that as it may, Mr. Speake� there are those who would like to follow some easier course, some thing that would not tie up capital funds and if we had followed that course, and we had lots of advice back in 1969 or 70 to forget about hydro development and put in oil burning steam turbi nes. Wouldn 't we have been a bunch of fools if we had followed that advic e. Mr.

Speaker, there is something more important than just price or hydro debt here.

And that is that for some reason, which I fr ankly admit I don 't yet quite understand, there are some who occupy positions of responsibility in our parliaments and legisl atur es in Canada who seem to be unaware of the fact that in one genera tion, that this generation is the one generation that has succeeded in con suming about a third of the world 's depleting non-re newable oil reserves, and if one generation can burn up one-third of those scie ntifically estima ted reserves, how many genera tions need there be in order to burn it all up ?

In which case this world has become so over -dependent on oil that it might as wel.l be called the black blood of our industry. And in other words, it has become something to which our whole way of life and industry has become over -dependent to the point of addiction.

And yet there are those who occupy positions of re spon sibili ty who are not, who are not somehow shaken who maintain a face of equanimity in the fact that one genera tion of humanity has burned up forever and a day one-third of the world 's never to be replaced, stock of liquid hydrocarbons, Now in the face of that, can any rational ma n question the advi sability and efficacy of proceding just as quickly as we can with optimum con stru ction schedules towards harnes sing of precious renewable energy so that the even more precious non-rene wable fossil fuels need not be burned up with callous dis regard to the gen erations that come only 20, 30, 40 years from now, not to mention beyond that.

So I say in conclusion Mr. Speaker, that the year ahead will be difficult for every province in Canada, we believe our budget will ensure --( Interj ection) -- well my honourable friends are you know, indeed nit -picker s. I remember some ten years ago, I remember some years ago sitting on that side with the Honourable Member for Portage la Prairie, sitting close to each other, yes, over there, and having someone on this side, it was a Conserva tive at that time saying that he 'd sooner be a story telling Tory than a nit-picking Grit.

And this of course incensed my honourable friend the Member for Portage a great deal, and I felt rather sorry for him. Because I don 't believe that the Grits are nit -picking; I believe that the nit-pickers are those who in the face of the kind of impending crisis we face with fossil fuels and liquid hydroc arbons want to nit-pick about whether Jenpeg should have come ahead of South Indian Lake or vice-versa. Mr.

Speaker, and the nit that they are picking for is so small that they will never pick that nit. · So I say, sir, in conclusion that the year ahead will be difficult no doubt for every province in Ca nada. We believe that our budget represents a reas onable effort to respond and to be ready, an effort to be ready with an optional response capability depending on how the economy swings in western Canada and on the prairies later this year.

Res ult of our efforts, there will be more redistri bution of purchasing power, more ju st redi stribution still of our wealth in a way which I have alrea dy referred to , my colleagues have referred to on many occasions in the past. All of this will guarantee a more equal di stribution of the benefits of our economic wea lth in the future and even further progress toward real social and economic equality. I once heard someone say that what we would wish for ourselves we desire for all Mani tobans, in every part of our province. Those, Mr. Speaker, are in essence the words of the late J. S.

Woodsworth, Manito ban, Winnipegger, Parliame ntarian, Idealist, Humanitarian, all of these things, but also a· man who gave us more understand ing as to what civiliza tion should ultimately strive to be, if it was worthy of the name civiliza tion. You know, sir, mundane tax measures that redis tribute wealth are about one tangible means of keeping that faith with those who taught us but who were ahead of their time. And probably scorned a little because �hey were ahead of their time.

' April 24, 19 75 1683 BUDG ET ADDRESS (MR. SCHREYER cont'

d) These tax redistribution measures, the tax credits, a hundred million dollars worth, to take more account of the desire for more equality in the human condition are also a means of keeping faith with the present generation, in that there are practical ways of working toward a better world, a better world not because necessaril y it is richer, that's not the test of better ment, but beca use we slowly develop more decent attitudes in material economic term s to keep pace with the lip service that we talk about in terms of spiritual equality, resulting ultimately we hope in the elimination - not overnight, but every.year a little more, relentlessl y but steadily towards elimination of·gross and therefore offensive inequality \Ullongst ourselves.

Thank you, Sir. MR . SPEAKER : The Honourable Leader of the Opposition. MR . SPIVAK: Mr. Speaker, I move seconded by the Honourable Member for Riel, that debate be adjourned. MOTION presented and carried. MR . SPEAKER : The Honourable First Minister. MR. SCHREYER : Mr. Speaker, I have two messages from his Honour the Li eutenant Governor. MR .

SPEAKER : The Lieut��t-G overn�;:r trari�mits to the· Legislative Asse mbly of Manitoba Es timates of Sums required for the service of the Province for capital expenditures for the fiscal year ending March 31, 1976 , and recommends these estimates to the Legislative Assembly. The Lieutenant-Governor transmits to the Legislative Assembly of Manitoba estimates of further sums required for the services of the province for the fiscal year ending March 31, 1976, and recommends these estimates to the Legislative Ass'embly. The Honourable First Minister. MR. SCHREYER : Mr.

Speaker, I move, seconde.d by the Honourable the House Leader, that the said messa ges together with the estimates accompanying the same be referred to Committee of Supply. MO TION presented and carried. MR . SPEAKER : The Honourable House Leader . MR. GREEN: Mr. Speaker, I move, seconded by the Honourable Attorney -Generai, that the House do now adjourn. MO TION presented and carried and t he House acco �dingly adjo�� n� d until 10:00 a. m. tomorrow morning (Fr iday) . '

1684 April 24, 1975 SUPPLEMENTARY BUDGET MATERIAL APPENDIX A - ECONOMIC STATISTICS APPENDIX B - FINANCIAL STA TISTICS APPENDIX C - PERSO NAL TAXATION AND CREDITS APPENDIX D - ADMINI STRATIVE GUIDELINES FOR PROPOSED PROVINCIAL - MUNICIP AL "GROWTH TAX" SHARING ARRANGEMENTS APPENDIX E - RECENT DEVELOPMENTS IN FEDERAL-PROVINC IAL FINANCIAL RELATIONS APPENDIX F - RECENT MINISTE RIAL STATEMENTS ON FISC AL AND ECONOMIC MATTERS

cpril 24, 197 5 \PPE NDIX A - ECONOMIC STATISTIC S % Change 20 1 0 0 COMPAR ISON OF MAN ITOBA'S EST IMA TED GROSS PROV INCIA L PROD UCT AND CANADA'S GROSS NATI ONAL PRODUC T . . . ...

Manitoba 1685 Canada · •• •••••••· · • • ••• '61 '62 '63 '64 '6 5 '66 '67 '68 '69 '7 0 '7 1 '72 '73 '7 4 (Mill ions of Dolla rs) Manitoba's Estima ted Percent Change Gross Percent Change Year Gross Provincial Relative to the National Relative to the Product Previous Year Product Previous Year 19 61 1, 891 39,646 - 19 62 2,1 09 11 .5 42,927 8.3 19 63 2, 17 4 3.1 45,978 7. 1 19 64 2, 394 10 .1 50,280 9.4 19 65 2, 550 6.5 55, 364 10 .1 19 66 2, 735 7.3 61 ,8 28 11. 7 19 67 2,994 9.5 66,409 7. 4 19 68 3,289 9. 9 72 ,58 6 9.3 19 69 3,492 6.2 79,81 5 10 .0 19 70 3,674 5.2 85,685 7.4 19 71 3,999 8.8 93,307 8.9 19 72 4,430 10 .8 10 3,493 10 .9 19 73* 5,1 40 16 .2 11 8,902 14 .9 19 74* 6,078 18 .2 1 39,493 17 .3 *Estim ated All data have been revised to accord with upd ated Statist ics Canada series.

Note: Data have been revised to accord with updated Statistics C1n<1d.1 series. Source: Dep artment of f-i nancc/Statistics Canadd. A A

1686 o/o Change 40 30 20 10 0 '61 Year 19 61 19 62 19 63 19 64 19 65 19 66 19 67 19 68 19 69 19 70 19 71 19 72 19 73 19 74 '62 *Es tim ated SE LECTED ECON OMIC INDIC ATORS FO R MAN ITOBA1 Personal In come · · · • • • • • • • .. • • labour In come Farm Cash In come '63 '64 '65 PE RSONAL INCOME Value Percent Change 1, 436 -- 1, 61 1 12 .2 1, 647 2.2 1, 775 7.8 1,8 92 6. 6 2,039 7.8 2,280 11 .8 2, 523 10 .7 2, 704 7.2 2, 857 5. 7 3,1 56 10 .5 3, 529 11 .8 4,063 15 .1 4,791 * 17 .9 Cheque Cash ings .... r.- \" . / • • • • • # • \ I I �\ I .,,,,, \'-I- - __,.. .. v '66 '67 '68 '69 '70 '71 (Milli ons of Dol lars) LABOUR FARM CASH INC OME 2 INC OME Valu e Percent Value Percent Change Change 905 243 955 5.5 262 7.8 1, 003 5.0 270 3.

I 1, 058 5.5 300 11 .1 1,14 3 8.0 342 14 .0 1, 242 8.7 377 10 .2 1, 41 0 13 .5 373 --1.1 1, 557 10 .4 365 ·- 2. 1 1, 720 10 .5 350 - 4.1 1, 832 6.5 341 .. 2.6 1, 970 7.5 378 10 .9 2, 19 0 11. 2 484 28.0 2,396 9.4 629 30.0 2,848 18 .9 820 30.4 I All data have been revised to accord with updated Statistics Canada series. 2 Unadj usted wages and salaries Source: Department of Agric ult ur e/Department of Labour/Department of Finan ce/Statistics Canada.

April 24, 1975 '72 '73 '74 CHEQUE CASHINGS Value Percent Change 21,131 - 21 ,19 1 0.3 26,496 25.0 27,284 3.0 30,922 13 .3 33 ,71 5 9.0 35,372 4.9 34,18 4 3.4 36,436 6.6 39,897 9.5 43, 16 6 8.2 47,800 10 .7 59, 16 2 23. 8 81, 18 4 37.2

April 24, 1975 $m illi ons 7,000 6, 000 5,000 4,000 l,000 2,000 1, 000 (I '61 '62 Yc.r 19 61 19 62 19 63 19 64 19 65 19 66 19 67 19 68 19 69 19 70 1971 1' 172 1 'J 73 19 74 "b licrnt cd IN DU ST RIAL ACT IVITY - SE LEC TED SEC TORS (Millio ns ol Doll ars) Retail Trade • • • • • '63 '64 '65 '66 '67 '68 . '69 '70 '7 1 PRIM ARY CONST RUCTION MANU- RESOURCES FACTUR IN G Value Percent Percent Value Percent Change Value Change Change 401 369 717 ' 6 1 5 5 3. 4 361 2.2 7 53 5.0 581 5.5 403 11 .6 7'J-I 54 636 9.5 421 4.5 861 8.4 682 7.2 41 5 1. 4 913 6.0 701 2.8 485 16 .9 1, 01 9 11. 6 683 2.6 558 15 .1 l, 081J 6. 0 698 2.2 (>62 18 .6 1 , 1 1'-J 3.6 759 8.7 754 13 .9 1, 231J 9.9 820 8.0 695 - 7.8 1,2 57 2.� 908 1 0. 7 67 1 3.5 1, 346 7. 1 1, 045 15 . l 754 12 .4 1, '! '12 10 .8 1, 731 66.0 889 1 7. 9 1, 81 CJ 21 .'i 1, 690 2.4 985 ' 10 .8 2,249 23.3 l DJ Lt lor thi<:i and '>Lib':icqucnt yc:Jr-, should not be co mpdr ccl dir ectly to thoc,L' o1 prcviou' :. ve.ir'> <1<., the '>Cric<:i has been rcvi5ed to Ju.ord with Stc1ti'itiv ..

C.anc1cL1\ daL1 rcvi..,ion< i. Sour ce: Depa rt ment ot l� 1dui ,try and Co111m.crc c/De rdr lm 1·nt ol 1\grilultu1 -c /l)c pt1rtnJt'nt lJ! l\iinL'':i, Resource-, and Envi ronrnen t,11 MJnJgemen t/Drr. iri mcnt nl F111t1nu :1'.-it.1l1' il iv, Lin.iL L! . 1687 • • • '72 '73 RETAIL TRADE Value Pere enl Change 767 801 4.4 828 3 . . 1 873 5..l 9 18 5.2 1, 0071 NIA 1, 073 6.6 1, 118 4.2 1, 18 8 6.3 1,2 27 3.3 1, 31 8 7.4 1 :-170 11. 5 1, 674 13 .9 1, 936 15 .7

1688 April 24, 1975 VA LUE OF MA NI TOBA'S PRI MARY RES OURCE PRODUC TION Agricu ltur e 1 Minerals .;· Forest Products Fur2 Fisheries3 Total Value of Output 'R evised *Estim ated 19 68 458,000 209 ,61 7 19 ,50 0 5,262 5,497 697,876 (Thousands of Dol lars) 19 69 19 70 19 71 1972 474,000 457,000 545,000 693,0 00r 245,596 332,1 46 329 ,91 3 31 1,15 4 25,300 22,200 26,000 31 ,000 5, 91 1 4,821 3,1 64 2,647 8,286 3,360 3,829 7,41 5 759,093 81 9,5 27_ 907,906 1, 045,21 6 1 Excludes fur farm production and agri cultur al forest production reported in "F urs" and "F orest Products".

Series revised. 2 Ranch and wild furs. 3 Based on the fiscal year. 19 73* 1, 266,000r 41 9,21 4' 34,000 3,650 8,366' 1, 731 ,2 30 Source: Department of Agriculture/Department of Min es, Resources and Envir onmental Management. 19 74* 1, 200,000 443,566 35,000 2,535 8,450 1, 689,551

!\pril 24, 1975 I $m illions 800 600 400 200 19 68 19 68 19 69 19 70 197 1 19 72 19 73 19 74 19 69 Total Wheat 364.8 10 9. 5 350.4 72_ 1 340.4 72.3 378.cl 77.1 484.4 113.1 629.3 12 1. 3 820.0 223.2 SO URCES OF FARM CASH RECEIP TS MAN ITOBA 19 68-74 19 70 19 71 19 72 (Milli ons of Dol lars) Cattle Barley Fl ax-seed Other & Hogs Crops Calves 17 _ J 1 5 .2 45.3 77.8 35_5 13.3 25. 7 57 IJ 69.6 43.4 2 I.) 17 .6 1 h.·1 81. 7 57.6 12.U l· \.7 40.0 92.7 54.5 .is.3 13 .1 59.2 9'J.7 69.0 (l'J.8 39. 2 44.- 1 138.6 10 8.2 %.7 (1 1. 3 118 _8 I UlJ.2 lJ2. 5 1689 19 73 19 74 Poul try Other & Livestock Other Eggs & Payments Products 29.4 28.7 6.3 34.4 29.3 5.6 34.3 29 .1 9_9 28.9 29.2 9.3 33.9 35.0 Ill .I 53.7 39.2 1-l.'I 56. 7 51. b 111.1

1690 8 7 6 5 4 3 400 300 200 10 0 0 7.4 19 63-64 MARKETED VALU E OF FISHERIE S PRODUCTS IN MAN ITOBA 1963-74 MILLIONS OF DOLLARS 8.3 8.4 7.0 4.7 3.8 19 65-66 19 67-68 19 69-70 19 71- 72 197 3-74 Source: Department of Min es, Resources & Environment al Management VO LUME OF FISHERIE S PRODUC TS IN MAN ITOBA 19 63-74 THOUSANDS OF HUNDR ED WEIGHT S. 358 19 63-64 19 65-66 19 67-68 19 69-70 19 71- 72 197 3-74 Source: Department of Min es, Resources & Envir onmental Management. April 24, 1975 8.5 19 74-75 (est) LU _J "' <( _J <( > <( I- 0 z 19 74-75

April 24, 1975 *Estim ated rR evised Year 19 60 1961 19 62 19 63 19 64 19 65 19 66 19 67 19 68 19 69 19 70 19 71 19 72r 19 73* 19 74* EL ECTRIC POWER AVAIL ABLE IN MAN ITOBA Kil owatt Hours (Millions) 4,565 4,908 5,252 5,778 5,844 6,264 6,81 7 7,207 7,539 8,097 9,279 10 ,31 9 11, 71 1 12 ,300 14, 600 Source: Manitoba Hydro Electric Board. 1691 Average Net Value (Thousands of Dollars) 36,387 41 ,1 37 44,293 47,344 49,822 51 ,931 55,385 58,541 65,250 73,235 82,482 90,294 10 0 ,151 10 9,400 13 6,000

1692 April 24, .1975 .E LECTRIC AL POWER AVA IL ABLE IN MAN ITOBA 15 14 .6 BILLI ONS OF KWH 14 13 12 .3 12 11 10 .3 10 9 8.1 8 " '·--',-- __ , 7.2 7 6.3 6 5.8 5 19 63 '65 '67 '69 '71 '73 '74 Source: Department of Mine s, Natural Resources and Envi ronmental Management.

April 24, 1975 1693 VALUE OF CRUDE OIL PRODUC TION IN MANIT OBA 27.2 27 25 MI LLIONS OF DOLLARS 23 21 19 17 .2 17 15 13 11 9 19 63 19 65 19 67 19 69 19 71 19 73 19 74 Source: Department of Min es, Natural Resources and l:nvir onmen tdl Management.

1694 $m ill ions 2000 1,5 00 1, 000 500 19 68 19 69 VALUE OF RE TAIL T RADE BY KIND OF BUSIN ESS MANIT OBA 19 68-74 Other Stores Grocery & Other Food Stores 19 70 19 71 19 72 (Mil lions of Dol lars) April 24, 1975 19 73 19 74 All Stores Grocery & Other Motor Vehicle De partment General & Service Stations Other Food Stores Dealers Stores Variety Stores & Garages Stores 19 68 1, 066 255 209 18 4 10 7 81 282 19 69 1,18 8 273 21 7 198 112 84 304 19 70 1,2 27 293 19 9 19 8 118 97 322 19 71 1,318 307 227 21 5 12 7 10 2 340 19 72 1, 470 339 267 243 13 8 113 370 19 73 1, 674 384 334 275 15 2 12 0 409 19 74 1, 936 456 385 31 4 17 6 131 474 Source: Statistics Canada.

April 24, 1975 TOTALPUBLIC AND PRI VATE INVE STM ENT IN MAN ITOBA (I ncludes new and repair capital expendi tures) (Mill ions of Do llars) Institutional Private Sector Year Services and Percent Percent and Other Percent Government Change Util ities Change Capital Change Departments Jn vestment 19 61 14 2.6 - 15 1. 2 - 290.9 - 19 62 131. 5 - 7.8 17 0. 2 12 .6 294.7 1.3 19 63 13 3.5 1.5 208.5 22.5 333.4 13 .1 19 64 14 8.1 10 .9 19 0.9 - 8.4 380.3 14 .1 19 65 14 5.6 - 1.7 17 3.7 - 9.0 41 4.9 9. 1 19 66 19 3.5 32.9 201 .2 15 .8 465.4 12 .2 19 67 18 0.4 -6 .8 271 .3 34.8 495.5 6.5 19 68 207.6 15 .1 334.1 23.1 509.9 2.9 19 69 244.5 17 .8 296.8 - 11. 2 606.9 19 .0 19 70 234.1 - 4.3 283.1 -4 .6 61 5.6 1. 4 19 71 220.7 - 5.7 280.6 -0 .9 573.2 - 6.9 197 2 231 .5 4.9 363.4 29.5 61 7.3 7.7 19 73 250. 2 8.1 440.3 21 .1 778.3 26.1 19 741 262.8 5.0 564.8 28.3 969.9 24.6 1 Prel imi nary actual figures.

Source: Statistics Canada. 1695 Percent Total Change 584.7 - 596.4 2.0 675.4 13 .2 719 .3 6.5 734.2 2.1 860.1 17 .1 947.2 10 .1 1, 051 .6 11. 0 1,1 48.2 9.2 1, 13 2. 8 -1 .3 1, 074.5 - 5.1 1, 247.5 16 .1 1, 468.8 17 .7 1,7 97.5 22.4

1696 Pri mary In dus tries and Constructicm In dus try Manuf actu ring Utiliti es Trade, Fina nce and Com mercial Services Housing In stitutiona l Services NE W CAPITAL IN VESTM ENT* IN MAN ITOBA (1 973 and 19 74) (Milli ons of Dollars) 19 73 19 741 208.9 288.4 68.3 90.3 349.2 436.7 97.2 119 .8 21 3.4 255.8 and Gov ernment Departments 206.0 21 5.1 TOTAL 1, 14 3.0 1, 40 6.1 April 24, 1975 Percent Change +38% +32% +25% +23% +20% + 4% +23% *New Capital In vestment is made up of capital expendit ures on new construction and on new machinery and equipment. 1 Preliminary Actual Source: Statistics Canada

April 24, 1975 1697 RESI DENTIAL DW EL LING UNIT STARTS AND COMP LETIONS IN MANIT OBA Single Percent Row and Percent Apartment Percent Total Percent Total Percent Year Detached Change Two Family Change and Other Change Starts Change Completions ·change Starts Starts Starts 19 61 3,759 - 307 - 1, 61 2 - 5,678 - 5,500 - 19 62 3,279 -1 2.8 519 69.1 891 -4 4.7 4,689 - 17 .4 4,831 12 .2 19 63 3,794 15 .7 446 - 14 .1 2,14 8 14 1. 1 6,388 36.2 4,892 1. 3 19 64 4,270 12 .5 642 43.9 1, 740 - 19 .0 6,652 4.1 6,597 34.9 19 65 3,621 -1 5.2 394 - 38.6 1, 954 12 .3 5,969 -1 0.3 6, 193 - 6.1 19 66 3,200 - 11. 6 325 -1 7.5 1, 727 - 11. 6 5,252 -1 2.0 5,41 6 -1 2.5 19 67 3, 374 5.4 583 79.4 1,8 80 8.9 5,837 11. l 5,537 2. 2 19 68 2,649 - 21.5 511 - 12 .3 3,296 75.3 6,456 10 .6 5,878 6.2 19 69 3, 315 25. 1 1,12 3 119 .8 7,406 12 4.7 11 ,844 83.5 7,588 29.1 19 70 3,068 -7 .5 1, 824 62.4 4,053 - 45.3 8,945 - 24.5 9,320 22.8 19 71 3,71 9 21.2 1, 707 - 6.4 5,279 30.2 10 ,705 19.7 10 ,093 8.3 19 72 4,889 31 .5 1, 287 - 24.6 5,892 11. 6 12 ,068 12 .7 10 ,071 -0 .2 19 73 5,81 6 19 .0 541 - 58.0 5,17 4 - 12 .2 11, 531 - 4.4 10 ,735 6.6 19 74 5,405 - 7.1 920 70. 1 2,427 - 53.1 8,752 -2 4. 1 12 , 16 4 13 .3 Source: Statistics Canada.

1698 $M illions 5,000 4,000 3,000 · 1, 000 SOURCES OF PER SONAL IN COME . MAN I TOBA 19 68-74 .. April 24, 1975 Wages, Salaries & ..

Sup�lementary Labour lnc:ome --��---<---��---��--t..-��--..-��-e��--------- · 19 73 19 74 19 68 19 69 19 70 19 71 19 72 Wages, Salaries & Net Inc ome of Farm Int erest, Dividends Government Total Supplement ary Operators from Farm & Miscellaneous Transfer Labour Income Production Inv estment Income Payments 19 68 2523 1, 71 1 151 17 5 253 19 69 2704 1,8 69 10 3 203 277 19 70 2857 1, 991 68 21 2 322 19 71 31 56 2, 13 6 14 3 223 371 19 72 3529 2,375 162 248 441 19 73 4063 2,605 358 298 480 19 74 4791 3,01 3 501 361 570 Source: Statistics Canada, Gross National Product Division

April 24, 1975 1699 SHARES AMONG IN COME CLASSES OF TOT AL IN COME, TAX PAY ABLE & TAX CRED ITS MAN ITOBA -A 'LL TAX RETU RNS - 1 9 73 % 20 10 10 20 % OF TOTAL IN COME RECE IV ABLE AS TAX CREDIT

1700 Total Income (8) 25,000 • 20,000 • 15 ,000 11 10 ,000 .. 5,000 11 0 19 68 AVERAGE TOTAL IN COME PER TAXABLE RETU RN MANIT OBA 19 68-72 - -- -19 69 197 0 19 71 April 24, 1975 - - - ie-- 1972 FARMERS IN VESTORS & PROPERTY OWNERS • EMPLOYEES • PROFESSIONALS • BUSINESS PROPRI ETORS 19 68 19 69 19 70 197 1 19 72 farmers $ 4,298 $ 4,287 $ 4,294 $ 5,1 64 $ 5,953 employees 5,298 5,659 5,992 6,675 7,220 business proprietors 5,835 6, 16 5 6,037 6,782 7,397 in vestors & property owners 5,513 5,697 5,780 6,473 8,064 professionals 17 ,569 20,698 21 ,670 24,469 24,853 Source: National Revenue, Taxation.

April 24, 1975 LABOUR FORCE PE RFORMANCE CANADA AN D MAN IT OBA 1968-74 Change in Labour Force (%) Participation Rates (%) Canada Manitoba Canada Manitoba 19 68 2.9 3.9 55.5 56.4 19 69 3.1 0.3 55.8 55.6 19 70 2.6 1. 9 55.8 55.9 19 71 3.1 2.6 56.1 56.6 19 72 3.0 1. 5 56.5 56.7 19 73 4.4 3.0 57.5 57.6 19 74 4. 1 3.9 58.3 58.6 Source: StJtistics CJn<ldd 1701 Unemployment Rat es (%) Canada Manitoba 4.8 3.5 4.7 2.7 5.9 4.5 6.4 4.9 6.3 4.5 5.6 3.9 SA . 3.1

1702 April 24,1 975 CONSUMER PRICE CHANGES - WINN IPEG AND CANADA CO NSUMER PRICE INDEX (19 61 = 10 0) Canada Wi nn ipeg 197 3 19 74 % Incr eas e 19 73 197 4 % Incr ea se jan. /Mar. 14 5.2 15 9.2 9.6 13 8.0 14 9.2 8.1 Apr .fj une 14 8.5 16 4. 4 10 .7 14 0.2 15 5.2 10 .7 j uly /Sept. 15 2.6 16 9.4 11. 0 14 3.7 15 9.5 11. 0 Oct./Dec. 15 5. 4 17 4.0 12 .0 14 6.3 16 5.1 12 .9 Ja n. / Dec. 15 0.4 16 6. 8 10 .9 14 2.0 15 9.2 10 .7 Source: Statistics Canada

April 24, 1975 1703 Table CONSUM ER PR ICE IND ICES - REGIONA L CITI ES % RATE OF IN FLATION - AYERAGE 19 74 OVER AVERAGE 19 73 Transporta- Health & Recreation Tobacco· . All Food Housing Clothing Personal & & Items tion Care Reading Alcohol SL jo hn' s 12 .8 19 .7 10.4 10.0 12 .3 12 .4 7.9 4.3 Hal ifax 9.6 15 .9 8.1 4.7 9. 4 6.9 6.7 5. 0 Saint j ohn 10.2 14.4 4.4 4.4 11. 9 9.8 6.9 5.1 �1ontr eal 11. 1 17 .3 7.5 10.1 · 10.0 8.5 8:8 7.1 .

Ottawa 10.7 16.0 8.3 9.6 12 .8 8.5 7.2 5.9 Toronto 10.5 16.0 8.3 9.7 10.0 9.8 8.8 4.8 Winnip eg 10.7 16.3 8.9 9.6 8.9 9.0 8. 7 4.6 Regina 9.4 15 .1 6.0 10.1 7.9 8.6 9.lJ 6.1 Ed mont on 10.1 15 .3 8.2 10.5 9.4 7 .2 8. 7 3.4 Vancouver 11. 6 18.8 9.9 10.5 6.7 9.5 9.0 6.7 Source: Statistics Canada.

1704 April 24, 1975 INTER-CITY INDEXES OF RETAIL PRICE DIFFERENTIALS DECEMBER, 1974 WINNIPEG PRICE LEVELS = 100 Health & Transport- Perso nal Recreation Tobacco & Food Housing Clo thing at ion Care & Reading Alcohol St.

John's 114 .0 115. 6 103.7 11 6.9 101 . 6 95 .9 127 .7 Halifax 105 .9 106.7 92 .9 106.7 101 .4 102.2 104.9 Saint John 103 .6 111 .5 100.5 11 3.8 100.4 108.3 108.5 Montreal 98 .4 107.7 99 .4 113 .2 93 .5 106.6 100.7 Ot tawa 98 .9 107.4 100.4 107.5 111 .0 99 .8 97.0 Toronto 96 .8 102.7 96 .8 104.8 110. 5 103.5 95 .2 Winnipeg 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Regina 101 . 7 95 .8 100.6 98 .8 97 .5 101 . 7 95 . 7 Edmonton 100.6 98 .9 98 .8 101.1 106.7 101 . 3 94 .2 Vancouver 110. 9 111 .5 103.6 103.1 115. 8 102.6 99 .0 SOURCE : Depart ment of Finance /S tatistics Canada .

April 24, 1975 RESID ENTIAL RATE FOR 1000 KILOWATT HOURS OF ELECTRICAL City Regina Winnipeg Montreal Calgary Toronto Fredericton St. John 's Vancouver Halifax Charlotte town POWER PER MONTH Rate (April 16 , 1975) $13 .9 8 $1 5.7 9 (2) $16 .2 0 $1 6.3 1 $1 7:0 4 $1 8 .. 10 C3) $ 1 9. 38 (4) $19 .9 0 $2 1.57 (5) $3 1.7 4 . (

Z) Effecti ve April 15 , 1975 . C3) Applicat ion has been made to incr ease the monthly rate to $1 9.8 4 effecti ve June 1, 1975 . C4) Applic ation has been made for an inc rease of 16 .9 % effec tive July 1, 1975 . 1705 <5) The monthly rate is scheduled to increase to $2 8.3 1 effecti ve July 1, 197 5 . Source : Man itoba Hydro .

1706 1973 I II III IV 1974 I II III IV MANITOBA AVERAGE WEEKLY EARNINGS 1973 , 1974 QUARTERLY % CHANGE �� f �=!:��!�� Construction ------------ 1.4 8.5 - . .;. 3.0 -5 .4 1.3 3.0 2.5 3.0 1. 6 8.5 2.3 4.7 5.6 8.1 Not Available Not Available SOURCE : Statistics Canada April24, 1975 Industrial g_��E��!!:�- 1. 0 2.1 1.8 2.6 3.5 2.9 5.3 1.2

April 24, 1975 APPENDIX B - FIN ANCIAL STATISTICS FINANCIAL STATIS TICS 1. SUPPLEMENTARY EST IMATES - 1975/76 2. COMBINED MAIN AND SUPPLEMENTARY EXPENDI TURE ES TIMATES AND REVENuE EST IMATES - 19 75/ 76 3. 1975/76 CAPITAL AUTHORITY REQUIREMENTS 4. SUMMARIZED STATEMENT OF DIRECT PUBLIC DEBT AT MARCH 31 , 1974 5. STATEMENT .OF .GUARANTEES OUTSTANDING 6. CURRENT EXPENDITU RES AS A PERCENTAGE OF G.P.P. 7. FEDERAL AND PROVINCIAL SPENDING INTENTIONS 1975/76 8. • FINANCING ELEMEN TARY AND SEC ONDARY EDUCATION IN MANITOBA 1707

1708 DE TAILED SUPPLEMENTARY ESTIMATES OF CURRENT EXPENDITURE OF THE PROVINCE OF MANITOBA For the Fis cal Year Ending March 3l st, 1976 Appro priation No. SERVICE EDUCATION (XXI) Financial Support - Public Schools • . • • (

a) School Grants and Other Assis tance • • $3 30,000 TOTAL FOR EDUCATION FINANCE (VII) 3 Fed eral-Provincial Relations and Research Di vision .•••••.•.•. (

c) Manitoba Tax Credit Office

(3) Property Tax Credit Advances • • • • •

(4) Cos t of Living Tax Credit Payments $ 4,5 00, 000 10 ,5 00 , 000 $15,0 00 ,0 00 TOTAL FOR FINANCE ·•. • · ·., • • Details of Appro priations 330 ,009 $1 5,0 00 ,000 HEAL TH AND sac IAL DEVELOPMENT (IX) 3 Community Operations Division (

h) Operations Adminis tration and Field Services

(4) Regional and Community Health Services (

c) External Agencies TOTAL FOR HEALTH AND SOCIAL DEVELOPMENT $ 490, 000 490 ,O OO Year Ending March 3l st, 1976 330,000 $15 , 0Q0 ,000 490, 000 MINES, RESOURCES AND ENVIRONMENTAL MANAGEMENT (XII) 7 La nds , Forests and Wildlife Resources (

h) Development and Extension

(3) Wild Fur Program • • • 292, 500 TOTAL FOR HINES, RESOURCES AND ENVIRONMENTAL HANAGE- 1'fEN1' • • • • • • • . • • }fUNICIPAL AFFAIRS (XIII) Municipal Budget and Finance .•.•.• {

d) Unconditional Grants Act - Muni cipalities , Local Government Dis tricts and Areas . • • • • • • • • $1,0 00 ,0 00 TOTAI, FOR Xll'HClP AL AFFAIRS 292 ,500 1 ,000 ,OOO TOL'RISM, RECREATION AND CULTURAL AFFAIRS (XIV) 3 Cultural and Recreatio nal Services Division . • . • . • · • · • {

g) Public Library Services

(3) Grant Assista nce •• $1,0 00 ,0 00 TOTAL FOR TOURISM, RECREATION AND CUI, TURAL AFFAIRS TOTAL sm1s TD BE VOTED • • • • . • • $ 1,0 00,000 292 , 500 $ 1, 000 ,0 00 $ 1,0 00,0 00 $18,11 2,5 00 April 24, 1975 Resolu tion No . 1 4 5

April 24, 1975 MAIN AND SUPPLEMENTARY ESTIMATES FISC AL 1974-75 AND 1. Education (

a) Education Main Supplementary (

b) Coll eges and Univers ities Affairs Main 2. Health and Social Development Main Supplementary 3. Economic and Resource Development (

a) Agricul ture Main (

b) Ind us try and Commerce Main (

c) Mines , Resources and Environ- mental Management Main Supplementary (

d) Tourism, Recreation and Cultu ral Affairs Main Supplementary (

e) Northern Affairs Main (

f) Co-operative Development Main (

g) General Development Agreement Main Supplementary 4. General Government Ser vices and Administration (

a) Consu mer , Corporate and Internal Services Main (

b) Attorne y-General Main (

c) Labour Main (

d) Legislation . Main (

e) Executive Council Main (

f) Finance (excluding Public Debt, Manitoba Property Tax and Cost of Living Tax Credit Plans) Main (

g) Publ ic Works Main (

h) Civil Service Main (

i) General Sala ry Increase . Main (

j) Flood Control and Emergency Expenditures Main Supplementary 5. Highways Main Supplementary 6. Tax Credits and Direct Local Government Assista nce (

a) Municipal Affairs Main Supplementary (

b) Urban Affairs Main (

c) Manitoba Property Tax Credit Plan Main Supple mentary (

d) Manitoba Cost of Living Tax Credit Plan Main Supplementar y 7.

Public Debt Main OF CURRENT EXPENDITURE 1975-76 Fiscal of Fiscal 1974-75 Total 1975-76 $14 5,8 04, 600 164 ,077' 300 330,000 93,5 63,0 00 121,0 66 ,3 00 $239 ,3 67,6 00 28. 2 285, 473., 600 $2 70 ,2 19 ,900 308 ,5 59 ,4 00 10 , 700 ,OOO 490 , 000 $2 80 ,91 9, 900 33. 1 309 '04 9' 400 25, 39 7' 800 25,511, 800 6, 04 6,8 00 6 ,4 22,2 00 30 ' 334' 200 34, 123 ,000 1,0 00 ,0 00 29 2' 500 14 ,2 26 ,4 00 19 '958, 100 1, 900 ,O OO 1,0 00 ,O OO 14, 767 ,2 00 17' 334' 200 1, 012 ,4 00 1, 290 ' 800 850,000 2,0 06, 100 96,6 90 ,900 11. 4 106 , 782 ,6 00 1, 956 ,4 00 2' 199 '5 00 17 ,3 64,6 00 19 ,8 85 ,8 00 2 ,2 97' 800 2,5 07 ,8 00 2, 015 ,6 00 2, 62 8,3 00 2,95 0,5 00 3,2 44,5 00 4, 799 , 500 5 ,927' 300 17,077 , 500 22. 760 ' 800 5,4 08,1 00 8,5 23 ,000 23,0 00,0 00 3, 318, 900 5,0 00 ,OOO 58, 870 ,0 00 6 .9 93 ,9 95 ,9 00 69 ' 819 ,9 00 80 , 728,9 00 3, 25 0,0 00 73 ,069 ,9 00 8. 6 80 , 728, 900 18, 124 ,100 22,17 0,4 00 1,0 00, 000 7' 70 4, 100 11, 809 ' 500 42 , 450 , OOO 63,2 90 ,5 00 8,0 00 ,O OO 4, 500, OOO 14 ,000 ,0 00 14 ,0 00 ,0 00 I 0,500, OOO $ 90 ' 278, 200 10 .6 127' 270 ' 400 $ 10 ,07 2, 000 1. 2 24, 069 ,O OO $849 ,268,5 00 100 .0 $1,0 2 7,3 69 ,8 00 1709 I of I Total I I I 27. 8 30 .1 10 .4 9 .1 7 .9 12. 4 2. 3 100. o I

1710 BU DGETARY (CURRENT) EXPENDI TU RE S FIS CAL 19 75-76 TAX CREDITS AND DIRECT LOCAL GOVERNMENT ASSISTANCE HEALTH AND April 24, 1975 SOCIAL DEVELOPMENT 27.8% EDUCATION 10.4% ECONOM IC AND RESOURCE DEVELOPMENT 30.1% GENER AL GOVERNMENT SERVIC ES AND ADMIN ISTRATION (Mil lions of Dollars) Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 285.5 Health and Sociar Devel opment . ..... :· ...... · ... ................ ; ..... ....... .... , .......... ·.. 309.0 Highways .... . ...... _ ... , ... _, ....... · •...................... ' ....... ...... ..... ..... .......... 80.7 Tax Credits and Dir ect Local Government Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 7.3 Economic and Resource Developmen t. ........ ... ................ .... ...... ............ ..... 10 6.8 General Government Services and Admin istration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94.0 Public Debt ... .. , . . ; .....•......... .. ......... ..... ........ , . .-..... ... ..... ......... ......... 24.1 TOTA L .... .................... .. ........... ................... .' ........... • .. . : ........... $ 1, 027.4

April 24, 1975 REVENUE ESTil!ATES - FISC AL 19 74-?S AND 19 75-76 1. Income Taxes and Provincial Suc cession Duty and Gift Tax (

a) Individual Income Tax (

b) Corporation Income Tax (

c) Manitoba Succession Duty and Gift Tax (

d) Income Tax Revenue Guarantee 2. National Equalization 3. Other Taxes , Fees , etc. (

a) Legislation (

b) Att orney-General (less Liquor Commiss ion) (

c) Colleges and Univers ities Affairs • (

d) Consu mer, Corporate and Internal Services (

e) Co-operative Development (

f) Education (

g) Finance • (

h) Health and Soc ial Develop- ment (

i) Labour • (

j) Municipal Affairs (

k) Public Works

(1) Motor Vehicle Fees (

m) Misc el laneous Receipts for Sundry Services 4. Natural Resources (

a) Agriculture (

b) Finance (

c) Mines , Resources and Environmental Management (

d) Northern Affairs (

e) Tourism, Recreation and Cultural Affa irs 5. Government Enterprises (Liquor Commissio

n) Shared Cost Receip ts 7.

Trans fer of Revenue Account Surplus Fis cal 19 74 -75 $1 97 ,6 00,000 S0 ,3 00 ,000 4,0 00, 000 15 ,000,000 $266 ,9 00,000 $1 12 , 700 ,O OO $ 300, 200 6,4 74, 100 981,8 00 799 , SOO SOO 8S , 200 207 ,6 62 ,2 00 71 0, 000 376 ' 200 26,0 00 1, 19 3, 400 17, 84S ,O OO 7' 361, 300 $243, 815 ,4 00 $ 510 , 700 30,6 00,0 00 (1) 6, 6S5,7 00 40, 000 1, 330 , 400 $ 39 ,1 36,8 00 $ 42,0 00,0 00 $ 99 ,93 8,6 00 $ 45 ,0 00,000 $ 849 ' 490' 800 % of Total 31 .4 13. 3 28 .7 4.6 4.9 11. 8 S.3 100 .0 19 7S-76 $ 241,90 0,0 00 70 ,0 00, 000 S, 000,000 30 ,000, 000 $ 346 , 900 ,000 $ 124,4 00,000 $ 392 ' 100 7,9 92 ,1 00 93 4,0 00 902 , 300 600 87 , 000 25 3,0 24,0 00 448, SOO 3S5 , SOO 31 , 000 1,68 9,2 00 19 , 821, OOO 7,8 S6,3 00 $ 29 3,S33,6 00 $ $ $ 283 , 600 20, 680,0 00(1) 7,7 10 ,4 00 34 ,0 00 1, 39 8, 600 30 ,1 06 ,6 00 52 ,000,000 $ 129, 05S ,8 00 4S , 000,000 $1,0 20,9 96,0 00 1711 % of To tal 34 .0 12. 2 28.8 2.9 S.l 12 .6 4.4 100.0

(1) Includes Mining Royalty Tax, Mining Cl aim Leas e Tax, Mineral Tax, Mineral Acreage Tax, and Mineral Tax (Increment al) .

1712 BUD GE TARY (CURREN

T) RE YENUES FIS CAL 197 5-76 IN COME TAXES, SUCCESSION DUTIES AND GIF T TAX.ES OTHER TAXES, FEES, ETC. 28.8% 34.0% SHARED-COST RECEIP TS .12.6% NATIONAL EQUALIZATION 12.2% April 24,1 975 TRANSFER OF REVEN UE ACCOUNT SURPLUS (Mill ions Of Dollars) Income Taxes, Succession Duty and Gift Tax .. ....... ..... .............. ......... ....... . $ 346.9 National Equal ization ................. ..... ....... .. ...... ..... ....................... . 12 4.4 Other Taxes, Fees, Etc ....... ...................... .... .... ..................... ....... . 293.5 Natural Resources ............. .. ........ ..................... ............ ........ ..... . 30.1 Government Enterprises ............................................................... . 52.0 Shared-Cost Receipts ... ... ............ ................ ........................... ..... . 12 9.1 Transfer of Revenue Account Surplus ................................................... . 45.0 TOT AL .. : ..................... ..................................................... : $ 10 21. 0

April 24, 1975 DEPARTMENT OF FINANCE 19 75-76 CAPITAL AUTHORITY REQUIREMENTS ($ 'O OO)

SCHEDULE "A" SELF SUSTAINING PROGRAMS The Manitoba Hydro - Electric Board Manitoba Tel ephone Sy

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