ORDERS OF THE DAY

House Business

Hon. Jim Ernst (Government House Leader): On a matter of House business, Madam Speaker, I would like to inform the House that the 1995 Annual Report of the Manitoba Liquor Control Commission, that was tabled in the House on Friday, will be referred to the Standing Committee on Public Utilities and Natural Resources for tomorrow morning at ten o'clock for consideration, along with the 1994 report that had previously been referred.

Would you call Bills 2, 4, 5, 12 and then the balance of the bills as listed in the Order Paper?

DEBATE ON SECOND READINGS

Bill 2--The Balanced Budget, Debt Repayment and Taxpayer Protection and Consequential Amendments Act

Madam Speaker: On the proposed motion of the honourable Minister of Finance (Mr. Stefanson), Bill 2, The Balanced Budget, Debt Repayment and Taxpayer Protection and Consequential Amendments Act (Loi sur l'équilibre budgétaire, le remboursement de la dette et la protection des contribuables et apportant des modifications corrélatives), standing in the name of the honourable member for Wellington (Ms. Barrett), who has 32 minutes remaining.

Ms. Becky Barrett (Wellington): Madam Speaker, to get into the basics of the comments that I would like to put on the record today in regard to the balanced budget legislation, as I stated on Friday, this legislation does not correspond with any economic theory known to personkind, either historical theory or current economic theory.

In the 1930s, when the world went through a major depression, at the beginning of that depression the President of the United States Herbert Hoover followed the same type of thinking that this current government is following in bringing forward Bill 2, this draconian piece of legislation, in not wanting to spend any additional money to get people working, to get the factories working, to get the farmers working, to get the economy going again after it had been devastated by the actions of the stock market and millions of speculators who caused the the crash of the stock market and the attendant devastating depression that followed.

It was only when the new president, Franklin Delano Roosevelt, was elected in 1932 and came to power in early 1933 that the Depression started to unravel, as it were, that things started to happen. The reason they did, Madam Speaker, is because the new government in the United States followed a different kind of thinking.

The government of Franklin Delano Roosevelt understood that in order for you to have a vibrant economy, in order for you to get out from under a depression, you needed to ensure that people were working, that factories were working, that the farm economy started to make a comeback, that imports and exports started to happen, and you could not do that if there was not money operating in the system and the way to do that was to kick-start the economy.

That is exactly what the president of the United States did very effectively. So that by the end of the 1930s the United States was no longer in a depression. They had made a recovery and things economically were going along well.

So we see one example, Madam Speaker, of where the thinking that this government is undertaking or that underlies Bill 2 did not work in the 30s in the United States and it did not work in the 30s in Canada. The thinking that is behind Bill 2 is outdated and has been proven time and time again to be inaccurate, to be not helpful in trying to keep the engine of the economy and the people of the province on an even keel.

We do have another example of what happens when a government does not give itself the kind of flexibility that it needs to deal with the vagaries of the economy, and that is in the state of California, the infamous Proposition 13. When it was implemented in 1978 or '79 it has had an enormously devastating impact on the state of California, a state that used to be No. 1 in virtually every economic indicator. That was where it was best to be, where things were happening.

Since Proposition 13 has been in place, the state has gone down drastically on a whole number of indices. The state government before Prop. 13 had a $5-billion surplus. Today it has a multibillion-dollar debt. The state now is resorting to IOUs to pay its own employees. Now that is not the way that even members on the other side would agree you should run a business or a government.

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Before 1978, before Prop. 13, California ranked sixth among U.S. states in its per-pupil spending on education. Now, in the last 17 years as a direct effect of Proposition 13, that ranking has dropped to 41st, and this is not because there are fewer needs for spending on education in the state of California. They have some massive educational problems to deal with, and they cannot do it because they cannot afford to put the resources into their school system that are necessary.

However, not everyone in the state of California has been hit negatively by Proposition 13. The Wall Street Journal called Proposition 13 a business bonanza because it has diverted $3 billion a year from municipal treasuries to the owners of commercial and industrial properties because of the inability of the municipalities and the state to get tax revenue from those properties.

Madam Speaker, it just does not make any sense from an economic perspective to have a bill like Bill 2 on the books. We know that in an industrial and postindustrial society there is no certainty as far as how the economy is going to go. We can guarantee that given the fact that we are in an economy that is not only global in scope, but an economy that is driven not by elected governments, as has been the case in the past, not even by national corporations or multinational corporations, but an economy that has is being driven more and more by transnational corporations that have absolutely no loyalty to a state, a political entity, transnational corporations that are bound only by the profit line and care nothing about the impact of their actions on the people in the countries, the provinces and the municipalities that they relate to.

When you have an economy that is becoming more and more globalized and more under the influence of a smaller and smaller number of larger and larger corporations, more and more distanced from the people who pay the taxes that support them, then you need even more an ability by the government to be flexible in their dealings in the economy. Because the government has less impact, it needs to have more flexibility within the scope of influence that it does possess.

Madam Speaker, it is not only we on this side of the House that make that statement about the need to be flexible and the need to have some control over the economy and over the budgeting process. Standard and Poor's, not exactly an organization that we on this side of the House often refer to or many times agree with, has stated that the referendum requirement, particularly of Bill 2, is a concern for them, and I quote: We see the potential to reduce the flexibility the government may have should there be revenue weakness as a result of a recession. The government, because of this feature, may not be able to respond.

Madam Speaker, this is not the left wing speaking here, this is a major voice of the business community, of the corporate sector, Standard and Poor's. They are showing some concern about the inflexibility inherent in the implications of Bill 2.

On the whole issue of a deficit, Standard and Poor's also agrees with us on this side of the House that deficits are not in and of themselves always automatically a bad thing, that there are times for spending and there are times for saving. The reason that they say that this is not necessarily a bad thing is that, and I am quoting again: It is important for a government to retain some ability to do countercyclical budgeting to prevent a recession from ballooning into a depression.

Madam Speaker, we on this side of the House agree completely with Standard and Poor's assessment of the problems inherent in this piece of legislation. We think that it is essential that governments maintain as much flexibility and as much control as they can in these very, very difficult times when the statistics and the indicators are up and down. They cover the map. You do not know whether we are in a minimal recovery or we are starting into another recession. We do not know what is going to happen in the housing market. We do not know what is going to happen in the manufacturing sector. We never know what is going to happen in the resource-based parts of our economy, which are a major part of our economy. Sometimes they are good; sometimes they are bad. Sometimes we have a good crop year; sometimes we have a less good crop year.

It is important for the government to be able to have the flexibility in their planning process to react to these situations that are completely out of our control, and Bill 2 does not allow for that. Bill 2 puts a straitjacket, a fiscal straitjacket, on the government. I think, Madam Speaker, that no responsible government should want to have that kind of straitjacket placed on their ability to do good budgeting. Budgets, as we know, are really no more than a plan. There is very little good planning that can be undertaken under the strictures in place in Bill 2.

What have other governments in the country done about the whole issue of balanced budgets? Well, some provinces have brought in balanced budget legislation, although, Madam Speaker, I must say that the Province of Newfoundland, which has the best record of all Canadian provinces in fiscal management, has no balanced budget law at all. You do not necessarily have to have a piece of legislation to ensure a balanced budget, but provinces across this country, as well as states in the United States, are looking at and, in some cases, implementing balanced budget legislation.

The Province of Alberta and the Province of Saskatchewan both have balanced budget legislation. Madam Speaker, you cannot find two more diametrically opposed political philosophies in this country than the governments of Alberta and Saskatchewan. One, the Alberta government, is a very right-wing, fiscally conservative government. The other, the government of Saskatchewan, is much more to the left of centre and thinks in terms of the social implications of the budgeting process. They both have balanced budget legislation, but in neither one of those situations do they include all of the elements that are included in Bill 2, which make, when you take it as a whole, Bill 2 such a devastating financial and fiscal instrument.

Bill 2 has all of the elements that, as I said, together cause major problems for us because Bill 2 does not reflect the fact that economies go in cycles, as they have, certainly in the industrial and postindustrial economies, on an average of from four to seven years between a "boom and a bust." Bill 2 does not allow for that. Bill 2 presupposes or will impose a flat line on the economy and the budget of Manitoba. I would suggest, Madam Speaker, that the end result of this flatlining may very well be to bring the body politic and the body economic into a flat-line situation where there is no more beating heart of the economy, where the hand of Bill 2 is so heavy on the government of Manitoba and then, through the process, on the people and the economy of Manitoba that it will not have the desired impact. It will not mean that the province will be more economically viable. It will have a deadening impact.

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So Bill 2 does not allow, as I have said, for the flexibility needed to recognize the boom and bust, the cyclical nature of our economies. All economies go through cycles, but, particularly, in a province like Manitoba, which has such a major reliance on the resource and agricultural sectors, as I stated earlier, you really must have flexibility built in because you do not know what is going to happen. You cannot control that.

We less and less can control any element of our economy, but, most certainly, the resource sector and the agricultural sector are major components that need to have a degree of flexibility in their budgeting and planning process.

Another element of Bill 2, in conjunction with the lack of recognition of the cyclical element of the economy, is that the budget will take into account, will be balanced, on both the operating and the capital side. Now this, to me, is absolutely unheard of, that you can make the assumption that you will pay for all of your capital expenditures as well as your operating expenditures in a balanced manner each and every year. When you put those two elements together, you are just guaranteeing disaster.

What this will mean is that we will not be able to build hospitals. We will not be able to build personal care homes. We will not be able to build schools. We will not be able to build roads. People in northern Manitoba already know that because there has been virtually no road activity in northern Manitoba since this government came to power.

The highway budget, being largely capital, is going to have to go into that year's balanced budget process. I do not understand how the government can think that it can balance both the operating and the capital side together. It makes no sense. It makes no economic sense, it makes no long-term political sense, as I think the government will find out, to its dismay, as the implications of Bill 2 filter through the society. It most certainly does not make any quality-of-life sense.

The capital projects that this province undertakes and has undertaken throughout its history are the kinds of projects that enhance the quality of life for all Manitoba or should enhance the quality of life.

We do not build highways just to give the Highways department something to do. We build highways because it is an effective, efficient means of transporting people and goods from place to place. It connects us, one with the other, one community with another community. It helps to narrow and lessen the isolation that people feel in a province that is as geographically dispersed as this one is.

We do not build schools just so that the construction trades can have a job for a while, although that is a wonderful spin-off. We build schools because that is the place where our children are taught. That is the place where our children do much of their socialization. That is the place where much of what makes us a community takes place. The bricks and mortar are an essential component of that.

The same thing can be said of hospitals, of personal care homes, of electrification, of gasification, of all of the things that we as a province have undertaken, in a capital regard, over the decades to ensure that Manitobans have a high quality of life and that Manitoba is a good place for business to come and operate.

Now, I would like to ask the government how they think that they are going to attract business to this community, to this province if the cannot put in place the capital infrastructure that is needed, and they will not be able to put those things in place because they have to pay for them the day, the year that the shovel goes in the ground. No other government has this kind of capital requirement in its balanced budget legislation.

What have governments--[interjection] A question has been asked by one of my colleagues. I think it is a very good question, and I would like to put it on the record. I am not sure but it seems to me that a major piece of legislation such as Bill 2 should have some government members speaking to it as well, putting on the record their views, putting on the record why this is such a wonderful piece of legislation, and I do not believe anyone has. I would be very interested to know why the people of Arthur-Virden or the people of Rossmere or Riel or St. Vital do not know what their members are thinking about the value in Bill 2. Just an aside, Madam Speaker, and I would like now to get back to my original comments.

I have spoken about what other provinces in the country have done in regard to balanced budget legislation and how none of the other provinces have put in place anything that is nearly as Draconian as this piece of legislation, and very legitimately so they have not done it.

I would like to put a few words on the record as to comparing the kinds of governments, the ideological differences and the financial differences between Conservative governments and NDP governments both in the Province of Saskatchewan and the Province of Manitoba.

The Province of Saskatchewan has a 50-year history--well, with one unfortunate 10-year hiatus--of good solid financial management by the government of Saskatchewan, and the government of Saskatchewan that first began in 1944 and is currently in place, as well, is the New Democrat government. I think that arguably, and I am not sure of my statistics here, but I would imagine that the government of Saskatchewan throughout the NDP years, throughout the '40s, the '50s, the '60s, the '70s and the '90s, has had a better record of balancing their budget than any other government in the history of Canada. I take away the decade of the '80s because between 1982 and 1991 the Province of Saskatchewan was governed by a Conservative government. The Province of Saskatchewan, with a slightly smaller economy than the Province of Manitoba, although very similar in its composition, had a surplus when the Devine government came in. When the Devine government went out nine years later, the Roy Romanow NDP government came into power with a $1-billion deficit--

An Honourable Member: Madam Speaker, is this relevant to the bill we have before us?

Ms. Barrett: Madam Speaker, the member for Arthur-Virden (Mr. Downey), who is not prepared to put his words on the record of the reasons for his support for Bill 2, asks for relevancy. I am suggesting that it is incredibly relevant because the Province of Saskatchewan now has balanced budget legislation which does not require a balancing of the budget every year, which does not require capital and operating to be in the same process.

In the four years since the NDP government was re-elected in the Province of Saskatchewan, they have a taken a $1-billion deficit rung up by those fiscally prudent managers, the Tories, a $1-billion deficit over those nine years, and they have turned it into a surplus in four budgets.

Madam Speaker, I would suggest to you that this is an indication, as was stated by Standard and Poor's, that you do not necessarily need balanced budget legislation to balance your budgets, and you certainly do not need the kind of draconian legislation that is before us today to do that.

Madam Speaker, I think that we needed--and I would like to talk as well about the elements of balancing budgets and budgeting as undertaken in businesses and families. The government has talked often about how businesses could not operate like NDP governments do. They have talked about the need to be more businesslike in their approach to budgeting and finances, and they have also spoken about how families do not budget inappropriately and do not budget for debt and this kind of thing. I would like to suggest that the government is completely wrong in its analysis of both the business budgeting and household budgeting. They are completely wrong when they are trying to put business budgeting and family budgeting in the context of Bill 2. Historically and currently that is shown to be the case.

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Madam Speaker, families, yes, every family wants to be able to budget for no deficit, for no debt. We all agree with that. Most families try and do that, but I would suggest to you, and here we get into the difference between capital and operating, that there is virtually no family in the province of Manitoba that at one point or another was not forced to take out a loan, was not forced to go into debt.

Madam Speaker, these are families who are not irresponsible budgeters, who are not irresponsible in their looking at the needs of their family both short term and long term. Where would our provincial economy be today if we could not, on a personal level, on a family level, go into debt to buy a house? If there were no such thing as mortgages, what would happen to our already moribund housing market? People would never be able to buy houses.

I would like to ask--it is a rhetorical question--the members opposite, how many of them were able to buy a home without a mortgage, their first home without a mortgage? Very few. [interjection] Very frugal, yes, but every single one of you with the one exception so far did take out a loan, a mortgage to buy their home. This is a legitimate expense.

I would like to ask a question, how many members opposite, or how many people in the province, are able to buy a car without a loan, certainly the first car without a loan? Some people can buy a car without a loan. Most people cannot buy a car without a loan, especially if you are going to buy a new car. They pay it back.

Do you know what, Madam Speaker? We are, as a province, paying back our long-term debt. We also have, because we have allowed ourselves to take out loans to implement capital projects, we have things like hospitals, personal care homes, highways. We would not have those things if we were not allowed to--if we had to respond to Bill 2. Bill 2 will not allow the government to make any capital decisions that will impact positively on the people of Manitoba. I do not understand how they can say that it is going to be a help. I am sorry, but we have to assume that they do not know because they are not choosing to speak on this piece of legislation.

Madam Speaker, in the whole issue of small business too, which is the cornerstone and the backbone of the province's nonfarm economy and becoming more and more the backbone of the farm economy or a necessary adjunct to the farm economy because the small family farmers are going under as the agribusiness takes over and the multinational corporations come into the province of Manitoba, there are very few family farmers who can afford to be farmers completely. They have to have a second income of sorts. [interjection] Farmers. Now, I will ask--

Point of Order

Hon. James Downey (Minister of Industry, Trade and Tourism): Madam Speaker, I wonder if the member really knows what she is saying. She should really check as to what she said about the small family farms in this province going under and not being important to the Province of Manitoba. I wonder if she would withdraw her comments.

Ms. Rosann Wowchuk (Swan River): Yes, I would ask that the Minister of Industry, Trade and Tourism listen a little closer. My colleague indicated that many family farmers were in trouble and going under. She did not say that they were not important to the economy of this province. Many--

Madam Speaker: Order, please. On the point of order, there is no point of order. It is clearly a dispute over the facts.

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Ms. Barrett: Madam Speaker, I would like to make it crystal clear to the member for Arthur-Virden (Mr. Downey), in case it was not crystal clear before, that I started my remarks about the family farm by saying that the agricultural sector was an enormously important part of the economy of the province of Manitoba. The backbone of the province of Manitoba's economy, both urban, rural and farm, is the small-business person, whether that is a business person in an auto parts business or a small retailer or a small family farmer. They are all vital to the backbone of this economy.

I am suggesting that the Bill 2 that is being brought forward by the Minister of Industry, Trade and Tourism (Mr. Downey) is not going to help any one of those major segments of the economy of the province of Manitoba. If the minister has some concerns about my position and the position of my colleagues, perhaps he would like to put his notes on the record.

Madam Speaker, the government of Manitoba instituted a task force on capital markets which said, and I quote: the majority of small businesses usually require some debt financing. The report goes on to note that small business uses debt financing to purchase capital assets such as buildings and equipment and for current assets and ongoing operating costs. Financing of operating costs is usually by way of loans, mortgages or leases backed by the required level of collateral security.

The government says that Bill 2 will not devastate the small-business community, will not devastate the retail sector, will not devastate the farming community.

I am closing my remarks by saying that this government has put forward Bill 2; it has chosen not to speak one word on the record about this bill. I would suggest to you that when we get to public hearings that the people of Manitoba will speak loud and clear about the devastating impacts of this ill-thought-out and ill-conceived piece of legislation, and I would urge the government to take Bill 2 back and come back with a logical, legitimate form of balanced budget legislation. Thank you, Madam Speaker.

Mr. George Hickes (Point Douglas): I am pleased to rise to put a few comments on record on Bill 2, which is the balanced budget legislation, but before I do, I would just like to quote a saying that a very well-respected ex-Premier of Manitoba stated. He said, who can say what the monetary costs are of not building a road, a school, or a hospital? I think that explains the whole effect of Bill 2. That Premier was no other than the well-respected Duff Roblin.

If you look at his comments and if you look at the implications of Bill 2, I do not think Mr. Roblin would have had the opportunity to build the now famous Duff's Ditch. We all know that the floodway has saved many, many residents and homeowners from getting flooded year in and year out. So how can you say on one hand that balanced budget legislation is so great and, yet, on the other hand--one of the most respected Premiers of Manitoba from the Conservatives--it just contradicts exactly what that Premier was able to accomplish.

I am not surprised that we are not seeing too many of the members standing up and speaking on this balanced budget legislation, because they would have to speak out against and contradict Premier Roblin, who was very wise in building that floodway. If you look at the impacts that it would have had had that floodway not been built, the same families, year in and year out, would have been getting flooded, would have had enormous costs because of the flooding. If they kept taking out insurance policies to reclaim the losses that they would generate from the floods, they either would have been cut off from insurance by now or their insurance premiums would be so high that they would not be able to afford them. I think everyone in this House recognizes the tremendous impact that floodway has on residents who would have been affected by that flood.

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If you just go on to see what Premier Roblin was saying, you know, about building roads and schools and hospitals, when I was sitting in this House the other day when my Leader was speaking, he said the former Finance minister and he were in a conversation and the former Finance minister had stated, well, what about our debt?

My Leader reacted at that time, no one really likes debt; but he said, I am so proud when my children are born in their hospital. He said, when my daughter goes to school, she is going to school in her own school. When she goes out to play in the playground that is owned by the people of Manitoba, he said, that is a tremendous amount of pride.

For a while I did a lot of thinking about that, and he is absolutely right. We have a lot to be thankful for, and we have a lot to be thankful for the visions of past leaders and past premiers. I only have to look at the constituency of Point Douglas, and I am reminded of the vision of Ed Schreyer when I visit the seniors homes in Point Douglas.

When I go door to door, a lot of seniors say to me, yes, we remember Ed Schreyer. He built my home where I am living today. There is no way that our hospitals, our roads, our seniors homes would have been able to be built under this Bill 2. There is no way because you would have to save up the money first and then build it.

So, if you look at some of the ways governments have spent money--[interjection] The member for Arthur-Virden (Mr. Downey) just stated, well, what about Saudi Arabia? That is true. It was money well not spent. But I just have to remind him that just in the last year I do not know how many millions of dollars we are going to be spending on the Jets who are not even going to be here. Who is spending those dollars? It is not the NDP. It is not the Liberal Party. We are not in government. It is the taxpayers of Manitoba who are going to be having to pay those high costs of financing a personal business person that had a hockey team.

But, if you look at the irony of it all, this government, sure they say that it is great to build an arena. A lot of people will use it. I would like to recommend to the government that, if they are really looking at building an arena, in Point Douglas there is a community in there called Lord Roberts tenants association that is living in a Lord Roberts housing development there.

They have a community hall and a beautiful recreation building called Turtle Island. Right in behind there is a massive amount of land. Could you imagine if the government in their wisdom and their efforts to wanting to build a beautiful indoor arena built it there? That would benefit the whole community. You would see crime go down, and you would see kids happily going to physical activities.

If you people want to build an arena, I would recommend they look at that site because that would benefit children.

So, when you look at this legislation, we only have to look no further than comparing it to our own family finances. When I say that, I do not know too many people, those I know anyway who are my friends and associates, that could lay down $50,000, $60,000, $70,000 cash to buy a house. There are not too many families I know that could lay down $10,000, $15,000, $20,000 for a car. So if the government ran the government and looked at their own finances, I do not know how people would ever, ever have homes. I do not know how many people in this Chamber--I saw one hand go up when my colleague from Wellington (Ms. Barrett) asked how many people were able to purchase their home without a mortgage. I saw one hand go up.

Some people are fortunate enough through wise investments, or a lot of people, if you look at how they got their start was through inheritances from their families. Some of them were fortunate enough to get the capital that they were able to invest from families, but there are a lot of people in Manitoba that do not have the opportunity to inherit a huge inheritance.

Some people say, well, it is their responsibility. I think a person that is working a steady job year in year out, that is looking at assets for their family, that looks at their budget and takes out a mortgage to buy their home to make sure their family has a decent affordable shelter, I do not see anything wrong with it. When your kids start getting a little older and you have to start driving your children to hockey games or baseball games or Boy Scouts or Girl Guides, you need the means of transportation. I do not see anything wrong with taking out a loan to purchase a car, but you have to balance it in your overall budget.

Under this legislation, if you compared it to family financing, then what would happen is when you have an income and all of a sudden something happens that you have to spend extra dollars that you really did not budget for, something unforeseen, and then all of a sudden you are faced with an Autopac bill, under this legislation you could not even go and borrow the funds to pay your Autopac. What you would have to do is you would have to immediately cut back on family income. When you are a family where you have your fixed costs, mortgage, loans and your heat, lights, well, you know, we know how much they cost every month, if you do not have that flexibility, if you are faced with a loss that you had not really budgeted for, and you need to expend, there is only one way to cut back and that is in food.

So under this legislation, then, what this government is saying is no matter what, take food away from your children in order to come in with a balanced budget. [interjection] Well, that is exactly what is going to happen. Well, we are paying--when we bring money in, we should be paying back.

This government says we have such a huge debt to pay back. I think our ratio on our debt is somewhere from 10 cents to 12 cents on a dollar. I wish I could get that kind of a rate at my bank for my car or loan or whatever. [interjection] Well, that is 10 cents on the dollar.

An Honourable Member: No, that is the amount of our debt, it is not a rate.

Mr. Hickes: Well, if you compare it to our debt ratio, percentage of dollars that goes to pay down our debt is $10 on $1. If you looked at comparing deficits--now how come all of a sudden the government in their wisdom came out with Bill 2 and says it is such a great idea to come in with balanced budget legislation? Well, my colleague said earlier that Newfoundland has the best finances in Canada. They do not have this legislation.

An Honourable Member: Newfoundland?

Mr. Hickes: Newfoundland. It states right here: Newfoundland has the best record of all Canadian provinces in fiscal management and has no law at all.

An Honourable Member: Who said that?

Mr. Hickes: Well, it is right in the editorial of the Free Press.

So, if you looked at that, if you compared it to this government's newfound vision or wisdom, I just wonder what happened in the last seven years. If the government was serious and intent on balancing the budget, there was no reason, there was nothing in the way of stopping you from coming in with a balanced budget legislation. I would just like to ask, when you talk about figures, what happened in 1989-90? Was the budget balanced? This is the responsible fiscal managers of Manitoba. When they were elected, was the budget balanced? No, it was not. How about in 1990-91, was the budget balanced? No, it was not. In 1991-92 was the budget balanced? No, it was not balanced. How about in 1992-93, was the budget balanced? No, it was not. How about in 1993-94, was the budget balanced, Madam Speaker? No, it was not. How about in 1994-95, was the budget balanced? No, it was not. How about in 1995-96? Do you think it will be balanced? Well, that is to be seen.

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Well, what happened in 1988-89? Was the budget balanced? There was a surplus of $55 million in 1988-89. Who was the government at that time? So, when you look at tax and spend, who has been taxing and spending since 1989 to now? Is it the NDP? I do not think the NDP has been power since 1988-89 when we had a surplus budget of $55 million--$55 million surplus.

An Honourable Member: It is a figment of your imagination.

Mr. Hickes: Well, the Minister for Highways (Mr. Findlay) says, it is my imagination. Well, I would just like to ask and read something that has been--this is from the Provincial Auditor. I wish the Minister of Highways would write a letter to the Provincial Auditor and state what he is stating in this House that what she has stated is not true, because it says right here: responding to questions from NDP industry critic, Tim Sale, Ms. Bellringer said the '92-93 deficit was not $330.5 million, nor was it $566 million. It was $819 million, and it states right in here that it was the highest, highest deficit that was ever recorded in the history of Manitoba, the highest, and this is from the fiscal managers that we have today.

They are talking about tax and spend, so just go back and just check from 1989 to now, who the government has been that has been practising the tax and spend. It is nice when you can be part of a party that in 1988 had a surplus, a surplus budget that was even confirmed by the Provincial Auditor. So I could not see how anyone in this House could stand up and argue with the Provincial Auditor and say the Provincial Auditor is wrong.

It says right here, it says--this is taken from CBC 24 Hours, a transcript from CBC 24 Hours News, and it says Diana Swain, this is what she is saying. She is asking a question: How do you budget your cheque book? Well, the Provincial Auditor does not like the way the provincial government keeps its books. She says in 1992-93 the province reported a deficit of $470 million, but Carol Bellringer says properly accounted for the number was over $800 million. Even one of their own colleagues, the former member for Rossmere, stated right in this House that the deficit was much, much higher than what the government was stating, even made it in one of his speeches. And it goes on to say, the highest deficit ever rung up by a Manitoba government, the highest deficit ever.

So that is very, very scary stuff, as some member just mentioned, because if that continues on, what are we going to leave to our children? And this government keeps saying we have been responsible and we have not raised taxes, but you know, Madam Speaker, a couple of years ago my son, who was 13 at that time, was told by this province to pay taxes. Thirteen years old. Six-year-old children, some five-year-old children, even some babies were now forced to pay taxes which they had never paid before. That is true, because when my son and his friends and the children used to go to McDonald's and buy their hamburger, they never used to have to pay tax on that, but now, when they walk in those doors, buy a hamburger, every child in Manitoba has been taxed by this government. Because meals under $6 were not taxed, but now every one of those burgers are taxed. Well, taking from the mouths of children, it is okay to take money from the mouths of children.

Yet we look at big corporations that are--oh, it is fine, they do not need to pay taxes. Also when you look at taxes, like under the new tax system, I think it was the first time baby bottles and baby supplies were ever taxed. Newborn babies, diapers, their bottles, taxed, and this government says they do not tax, but they go through another way. So when you look at other avenues that people are scared of, I will read a little bit from this article. It says: Manitoba has already had one experience with how the Tories finesse around the eight-year tax freeze.

It occurred in the 1993-94 budget which slashes the property tax credit from $350 to $250, and extends the sales tax to cover newspapers, snacks, meals under $6, personal hygiene products, school supplies. Well, who uses school supplies? It is children. You are taxing children and baby expenses, that is newborn babies. Now, to generate revenues to balance the budget, I am sure that we will hear from this government. This government will say, hey, look, we do not want to really tax babies, we do not want to tax children, but darn it, this balanced budget legislation forces us into doing that. We do not want to do it, because we are nice people, but we are forced into it by Bill 2.

Madam Speaker, that is what we will hear next year, the year after, when a government is trying balance the budget, or what you will see if the economy does not pick up or if we have no further revenues coming into the province, that could be because of transfer payments by the federal government. There is no way that you will not be able to balance that budget without cutting services to people. You will see the impact that seniors will feel, our children will feel and citizens of Manitoba, when you start cutting our health care programs, our education opportunities for children and when you start cutting further our social programs that are there for an emergency whenever people need them.

I know a lot of people that are on social assistance, and it is not their will to be on there and to stay on there. They would like an opportunity to get into training programs and get into meaningful careers. But if you look at, a lot of the single parents that I have spoken to, and they say, if I go into education opportunity, I will need money for babysitters and daycare, because there are not enough public daycare spaces available. Also what happens is I need transportation costs. That goes up.

We have to make sure that all those barriers that are placed for individuals that wish and want to and hope, I know, dearly some day to get off social assistance, that we have the means in place. If you look at what Premier Roblin was stating in his comments, when he made his statement, that I am sure that has had a lot of impact on Manitobans throughout the years if you really, really think about it. When he stated, like who could say what the monetary costs are of not building a road, a school or a hospital. All we have to do is just--let us just go through a little exercise, where I know the government would be so happy. I am sure the government would be so happy if there was a new mine found in any community in Manitoba, any community, a new mine.

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Say they discovered a gold mine, it does not matter where, like wherever it is, and it created enormous opportunities for people. You had a population explosion where thousands and thousands of people moved in. They had jobs, they had the opportunity, and now you have thousands of people in a community without a hospital, without adequate roads, without schools. What would the government do? Would they ignore those?

If you know anything about the mining industry, it is one of the most hazardous occupations that is out there. There are many opportunities for accidents to occur in the mining area. So what you would need immediately, you would need a hospital. How would you build a hospital in that community now that you have thousands of people and children there? How could you build the roads? How could you build the hospitals? How could you build the schools under this legislation? You could not. How could you? How could you without breaking--

An Honourable Member: Yes, you can. We will.

Mr. Hickes: The Deputy Premier (Mr. Downey) says yes, we will, we will build them. That is why you have to be very, very careful when you bring in legislation that handcuffs you so tightly that you do not leave room for expansions of communities if you do have the good fortune to get a major industry going in some small community where you will need--that is exactly what Duff Roblin was talking about. To me, that is exactly what he was saying. He was saying that. Do not sacrifice roads. Do not sacrifice schools. In other words, do not sacrifice the care of people that you have been elected to be responsible for.

Madam Speaker, when you look at those kinds of observations that I have seen, and if you look at what this government is doing, then--so what happens? Since 1989 to now we have not had a balanced budget. Now for the government to balance this budget under this legislation they are free to sell Crown corporations to balance their budget. We all know those Crown corporations are in place to keep the rates low for all citizens of Manitoba. If you privatize them I would say there is a 99.99 percent chance that the rates will go up because--[interjection] Well, the member says the Public Utilities Board will take care of that.

If they are private, who is to say that they will be kept reasonable? No one can guarantee that. So if you look at our Manitoba Hydro, we have one of the best rates in all of Canada, if not the best. So we have to make sure we protect the citizens of Manitoba from high costs. MTS--look at what is happening to MTS--slowly being chipped away, chipped away. What is going to happen under this--[interjection] It is also you need services for the people. [interjection] That is incredible. So, from what I am hearing, Madam Speaker--

Madam Speaker: Order.

Mr. Hickes: --from that side is what I was afraid of. In order to balance the budget under this legislation, probably one of the first public utilities to go would be Manitoba Telephone System. That is what I was afraid of, and I think it was made pretty clear to me, because when I hear people talking about selling off corporations to balance the budget--but, you know Madam Speaker, it is like people that need money tomorrow or need money next month. Where do you go? You go to wherever you can get the most dollars in the shortest period of time.

So you will see the selling off of Crown corporations for half their value, probably a quarter of their value. So just to come in with the so-called balanced budget which I feel was an election gimmick. It worked, it worked. It was an election gimmick. It was a gimmick because it is not going to work unless you are willing to hurt the citizens of Manitoba, and you will be forced to cut more and more and more. Well, a lot of people do not understand this balanced budget legislation. I have spoken to many people, and I have explained what can happen under this legislation. They said, well, I did not know that. I did not realize that.

I said, to balance a budget, you have to sell Crown corporations or you have to cut services, and the services that governments look at and which I am afraid of--which terrifies me because it has done this in the past and without much caring. I hope that the member or the Minister for Northern and Native Affairs (Mr. Praznik) will speak after I do to make some comments on what I am going to say because I am terribly afraid that the hardest hit, the hardest hit individuals in the province of Manitoba, in order to balance the budget, are going to be the aboriginal community. When I say that, Madam Speaker, I just have to look at the past experience that the aboriginal community has experienced under this government. You look at 100 percent funding cut of the friendship centres, l00 percent. So, to balance the budget, do you think aboriginal people will not be hit? I am afraid they will be hit the hardest.

If you look at the friendship centres--I asked a question in the House. My colleagues asked other questions in the House. I heard the Premier (Mr. Filmon) of Manitoba stand up and say, well, they are only an advocacy group. I heard the Premier say that with my own ears.

Madam Speaker, if you look at the kinds of services that friendship centres offer to the aboriginal community across Manitoba, you only have to look at assistance to the elderly, assistance to the homeless, youth programming, socially disadvantaged, families in crisis, education, recreation and cultural programming, housing relocation, fine options, counselling, court assistance, Cree languages, day activities, wilderness camps for the aboriginal children, a children's Christmas party, training workshops, education workshops, an elders' supper. Is that so terrible? Is that so bad? Elders' supper, elders' afternoon program, they have had to cut back a lot of these programs, a tremendous amount of these, elders' other contacts, fine options, gym nights for the children, hospital visits to our elders, interpreters and escorts for individuals who do not speak English, interpretation. Who do you think requires an interpreter the most? It is our respected elders in our northern communities.

To give a little exposure to the aboriginal culture, they hold jigging, square-dancing, and also they provided a lot of literacy programs, native awareness to the schools, so the other students who are not aboriginal could get a better understanding about the aboriginal people and the aboriginal community so people have an understanding why it is different when you are an aboriginal versus a nonaboriginal. That I am sure has eliminated a lot of stereotype mentality that people had in their heads, native awareness through powwows and various different activities. The friendship centre participated in Nickel Days activities in Thompson, so the community could have a better understanding of what the friendship centre had to offer: programs, event inquiries, a resource library pertaining to the history of the aboriginal people and assistance to social agency administration, youth group activities and even the registration and intake of the hostel centre in Thompson and various other communities.

(Mr. David Newman, Acting Speaker, in the Chair)

There is no one in this Chamber that could convince me and I am sure convince my colleagues that the friendship centres were not delivering excellent programs that benefited the aboriginal community, but because some people thought they were an advocacy group they lost 100 percent of their funding.

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The Assembly of Manitoba Chiefs, who provide a tremendous amount of advice and leadership to the First Nations community, was cut 100 percent. Cultural operation grants to Native Communications, now what is so wrong with providing communications in peoples' own languages, because in most of those communities the language, whether Ojibway or Cree or Saulteaux, that is the first language of the people, so what is wrong with providing communications in those languages? That was cut. First Nations Confederacy, MKO, who provides a tremendous amount of service in the North, very, very well respected, all these organizations, but, no, they were cut.

We hear day in and day out about crime and, I guess, children, you know, like being mischievious, you know, breaking windows or being a little destructive. If you look in those northern communities, a lot of it is because the youth in those communities do not have an opportunity to get involved and wear off their energies through adequate recreation programs and activities.

One of the most successful programs was the Northern Fly-In Sports Camps, which was started in 1986. It used to go right into the communities, offer recreation programs, hire local people to assist them, and children learned swimming and a bunch of different activies, a very successful program. The funding was cut to a certain extent in 1994, and on and on and on.

That is what I am afraid of under this balanced budget legislation. The first people that will be hit will be the aboriginal community. It will be hit the hardest because of the examples that I have given you. I have to continue on, because we have to reflect on the past experience of this government when it pertains to aboriginal--and I would like to state again that I hope the Minister of Northern Affairs (Mr. Praznik) will speak after me, because I would like to listen to see what he has to say about these cutbacks and if he will guarantee the aboriginal communities and aborginal people that under this new balanced budget legislation that there will be no further cuts to aboriginal communities and aboriginal people, if he can stand up and guarantee that.

Also cut was the northern freight fish subsidy program. That was a program that benefited northern fishing, and most of the northern people who were fishing that had the negative impact were the aboriginal people. That was cut, the northern freight fish subsidy. You try to analyze it and you try to understand it in your mind, and it is so hard because, you know, if you take the people who are fishing in Gimli or Riverton or one of the other communities, when they take their fish and bring it to market, they can just throw it in boxes, throw it onto a truck and they drive it in. But these communities, their cost for freighting their goods out is so much, much higher. So what do you do with five or six times more? Does that make any sense? It does not make any sense at all.

(Madam Speaker in the Chair)

The Northern Economic Development Agreement between the federal and the province expired in 1989. Where is it? Has it been renewed? I do not know why not. You know, that used to benefit so many people in the North. Look at our Access program. Our Access program has been cut. One year it was 11 percent. Another year it was cut $2 million, 20 percent, and the enrollment for Access in the past went down from 928 to 714.

The Access program--I would like to tell you a little story about the Access program, because the Access program has benefited and educated so many aboriginal people in northern Manitoba. We always talk about role models for communities. I have talked to a lot of people who said, you know, what we need to do is we need to get more role models into the communities so that the children in the communities can see hope and say, well, if so-and-so did this, so-and-so did that, then the opportunity for me is to work hard at my education and get my education and go through the Access program, get a degree and serve.

I was in Shamattawa and, you know, everybody knows the horror stories that come out of Shamattawa; it is no secret. There are horror stories that come out of there, but we have to be willing to work with the people to overcome and to correct some of those behaviours there. I was in there to visit some friends, and I was just waiting for a plane to come out, and this guy steps off the plane and I had not seen him in I bet you 15, 20 years. George, he said, how are you doing? I said good. He said, what are you doing here? Oh, I said, I just came to visit George Redhead, I said, my friend and his family. I said, we are just spending the weekend and, you know, having a little bit of fun visiting old friends. I said, what are you doing here? I said, you were living in Winnipeg last time I saw you. That was 15, 20 years ago. No, he said, I have come, I am going to do some work for my people. I said, what are you doing? He said, I am a dentist. It is Dr. Henry Redhead, trained through the Access program, from Shamattawa, going back into Shamattawa. He was employed by Northern Medical Services going into all the communities to do their dentistry work.

It is an excellent story, and it is an example of why Access is so important. It is an example. So that is why when you look at cutting, do not cut programs that are so essential to helping communities and people like the Access program. There are so many success stories to the Access program. I do not understand why you would cut a program that provides so much--[interjection] Well, yes, but they have to see some kind of fairness somewhere. Like my colleagues keep saying, standing up in the House saying there has to be fairness in the North. Well, what happened to the Northern Affairs budget? Twenty percent. What is spent in northern Manitoba? Under 6 percent of the budget is spent in northern Manitoba? Under 6 percent?

An Honourable Member: It is more than that.

Mr. Hickes: Well, ask the Minister. The Minister is next to you. Ask the Minister if that is correct or not because that is what my colleagues keep saying. Highways budget, I mentioned.

(Mr. Marcel Laurendeau, Deputy Speaker, in the Chair)

An Honourable Member: Oh, Highways.

Mr. Hickes: I mentioned the Highways budget. Under 6 percent of the total budget is spent in northern Manitoba. Have you ever--

Mr. Deputy Speaker: Order, please. The honourable member's time has expired.

Mr. Hickes: Maybe they will give me leave to finish my comments on northern roads.

Ms. Wowchuk: I move, seconded by the member for the Interlake (Mr. Clif Evans), that debate be adjourned.

Motion agreed to.

Bill 4--The Real Property Amendment Act

Mr. Deputy Speaker: On the proposed motion of the honourable Minister of Consumer and Corporate Affairs (Mr. Ernst), Bill 4, The Real Property Amendment Act; Loi modifiant la Loi sur les biens réels), standing in the name of the honourable member for Transcona (Mr. Reid). Is there leave that this matter remain standing? [agreed]

Ms. Marianne Cerilli (Radisson): Mr. Deputy Speaker, I am pleased to be able to debate Bill 4, The Real Property Amendment Act. This is a bill that I have given quite a bit of attention over the last couple of years. We are pleased to see that the bill has again come before the House and I want to indicate right off the hop that we support the legislation. Indeed, we have been after this government to bring in a bill such as this for a couple of years now, and that is one of the concerns that I have is that the government has taken quite some time to bring in this bill, and in the meantime there could have been many more people who are going to fall prey to the loophole that exists in real property law because of inadequacies of current legislation in dealing with the realities facing lending institutions and homeowners dealing with assumed mortgages.

This bill does deal with assumed mortgages and it tries to deal with the problem that there have been cases where a homeowner who sells their home under an assumed mortgage is given a big surprise down the road when the bank comes calling for payment because the purchaser of the home has defaulted. This occurred in 1993 with a resident in Radisson being pursued by Royal Trust for over $23,000 in mortgage arrears when the owners of the home that bought their home defaulted on their mortgage. So this bill is intending to deal with that. It is intending to deal with the fact that a mortgage has two parts, and that even though the land transfer and the home transfers to a different owner, the bank still had the legal option because of the personal covenant section of the mortgage to pursue or go after or call claim for payment on the mortgage from the original owner.

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I think any one of us can imagine that this will cause a lot of problems for individual homeowners as it has for a few residents in the province and individuals who have come to my attention. So I want to say too that it is quite satisfying that this government has come forward, they have taken seriously the call for attention to this case. It is satisfying to know that we can affect some change in legislation even from the opposition side, that we can raise issues based on constituency work, based on inequities that are occurring in our province or problems with laws that come to our attention and that in fact if we persevere we can see some legal changes and some more justice in the laws that are there for the province of Manitoba.

But as I said earlier, there are some concerns with the delays that this government has taken. They have had a number of opportunities to deal with this situation. It first came to the attention of the House--and maybe this is not the case, maybe even this government knew about this problem prior to that, but it was in early 1993. Initially, we began writing letters to the government and it has taken a couple of years. It has taken over two years for them to come forward with this legislation.

It is interesting when we look at the way that it has been covered in the paper. Reading some of the headlines, it tells the story of the situation, given the problems with The Real Property Act, headlines such as, house returns to haunt seller, from January '93. Assume the worst in mortgage switch, was another one from January '93. Then we had an opportunity for the government to give it serious attention when the NDP proposed a private member's bill, and the headline was, NDP bill would protect after mortgage transfer.

The government though has chosen to look at more details, and I would give the government the consideration that this bill they are introducing is more detailed and specific than the one that was put forward from this side of the House. This is a very technical matter, and the bill that the government has brought forward deals with more of the technicalities than the private member's bill that I had introduced.

But further to that, some of the other headlines that speak to this issue where the minister--one of the headlines says, the minister to review mortgage liability. That was then in May 1993 so some time is passing.

Then we had another headline that was also in May, Ernst to take a hard look at perils of assumed mortgages. This is after they had the private member's bill introduced.

Then we had a court case where, the judge upholds the mortgage injustice. So there is an acknowledgement that this is an injustice but that there is legal protection and then, I think, the headline that probably bothered the Tories the most, Tories dither on mortgage injustice.

So we have I think a good record of the process and the many attempts that have gone forward to get this government to move on this issue. There was even an instance where one of the Premier's own constituents had a similar problem where they were being called on by the bank for claims to pay the mortgage on a home that they had sold and no longer lived in. The minister and Premier had promised action at that time, but there was none. They then referred the matter to the Securities Commission and received a report on September 1, 1994, outlining how this issue has been dealt with in other parts of the country, and it has taken them a full year to come forward with legislation. It is interesting that the government tried to deal with this before the election, and they brought forward a Bill 2, but when I was looking at Bill 2 as compared to the current Bill 4, there are some changes. So we can see that the government had to go back to the drawing board once again and they have made changes which I will get into in more detail later on.

I asked questions in the House on June 30 with regard to how this government is going to deal with the issue and now here we are October 1995 and we are debating the legislation. I do not know how many other people have had to deal with lending institutions in the meantime around assumed mortgages, but I know from dealing with the people who I have talked to that even though some people may say this is not a problem that affects a lot of Manitobans, it is not a big problem, I would say that even if there is one person who is unjustly affected by poor laws in this province that we have a responsibility to deal with those problems and ensure that legislation is going to be fair and balanced.

So even though there are some banks that have had their own policy not to make claims on an assumed mortgage after it is one year, that there are some banks that have not operated by this type of policy, that they have used the letter of the law to their advantage and to the financial ruin or to just add great stress and problems for individuals in the province. So it may not be a big issue in the broad scheme of things in terms of the very large number of houses that are bought and sold in the province but, for those individuals who are affected, I can assure you, it is a big issue. I am pleased to see that the loopholes and problems with the law are going to be addressed.

Further to that, I think the big question is the issue of balance. The Minister of Consumer and Corporate Affairs (Mr. Ernst), when dealing with this issue, has often talked about the need that we have to have a balanced approach, that we have to take into consideration the interests of the banks, of the lending institutions, as well as the interests of homeowners. This only applies to residential mortgages.

I ask the government to consider how you balance the interest and the ability, for example, of individuals to hire lawyers as opposed to the ability of a bank to hire lawyers and go to court and deal with these matters. I want to impress upon the government that their attempts to achieve balance may not actually take into consideration that the banks have a tremendous amount more power and influence and ability to deal with these matters than individual citizens and homeowners.

So I think that although we support the bill, I think that there is still some room to make it more balanced and will look at that in more detail.

You can just look at one of the options in the legislation: to allow the banks now to charge fees when they are trying to deal with approving an assumed mortgage. Because the bill is allowing for banks to charge fees, I guess that has been one of the ways they have attempted to balance the interest of the banks, but we can all, I think, agree that banks are doing pretty good in this day and age, that the banks are making hundreds of millions of dollars of profit. I think that any provision that allow banks to charge additional fees--

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Mr. Deputy Speaker: Order, please. The hour being 4 p.m., as previously agreed, it is time for private members' hour. When this matter is again before the House, the honourable member will have 28 minutes remaining. As previously agreed, this matter will remain standing in the name of the honourable member for Transcona (Mr. Reid).