Hon. James McCrae (Government House Leader): Madam Speaker, I see there are about 15 minutes on the clock before the Minister of Finance (Mr. Stefanson) is scheduled to make his budget presentation. I wonder if you would consider, if honourable members would consider, a recess until shortly before that time when Your Honour might cause the buzzer to be sounded just prior to the eleven o'clock time.

Madam Speaker: Is there leave for a 13- or 14-minute recess at which time a one-minute warning buzzer will sound to start the budget? [agreed]

The House recessed at 10:47 a.m.

The House resumed at 10:59 a.m.

Hon. Eric Stefanson (Minister of Finance): Madam Speaker, I move, seconded by the Minister of Industry, Trade and Tourism (Mr. Downey),

THAT this House approve in general the budgetary policy of the government.

Motion presented.

* (1100)

Manitobans are already seeing the benefits of our recharged economy through an abundance of new jobs and entrepreneurial opportunities, and through the securing of vital services to children and families. Madam Speaker, our stable and secure finances also open up new avenues for all Manitobans to take advantage of the opportunities presented to them.

This is a key budget, Madam Speaker, because it signals the beginning of an era of unprecedented opportunity and achievement for the economy and the people of Manitoba. It is key because it says to our children, the leaders of tomorrow, you have a future in Manitoba. A future which does not bring with it the spectre of debt, but a future filled with the promise of prosperity.

Madam Speaker, for the first time since my children were born, indeed for the first time in a generation, we have a budget which projects a surplus for the third consecutive year.

By continuing to put our fiscal house in order, we are guaranteeing a better tomorrow for all Manitobans.

* Madam Speaker, this budget is truly historic. This budget launches the first sustained attack on the province's debt since the 1950s.

* This budget continues our government's commitment to protecting and enhancing health care, education and support to children and families.

* This budget has no new taxes and no tax increases.

* This budget extends Manitoba's freeze of major tax rates to a full decade, 10 years.

* This budget provides strategic targeted tax reductions.

* This budget invests in Manitoba's hospitals, schools, and roads.

* And, Madam Speaker, this budget continues to spend taxpayers' money wisely.

In short, Madam Speaker, the 1997 Manitoba budget keeps us competitive, supports more job creation, enhances our standard of living and shows our young people they can look forward to a prosperous life with good opportunities for employment right here at home.

In many ways, Madam Speaker, this budget is the result of nine years of innovative and creative effort. It is the result of hard work by many people, not only within our government, but in factories, farms, offices, and construction sites right across our province.

This budget reflects the advice I received from hundreds of Manitobans from all walks of life during the prebudget consultations concluded last month. I am proud to dedicate this budget to all those who worked so hard to make it happen and to all Manitobans who share our vision of a dynamic and prosperous economy.

The 1997 budget, Madam Speaker, deals compassionately and effectively with the challenge presented by the severe cuts in federal contributions to health, education and services to children and families. Despite the added revenue generated by a rapidly growing economy, the federal cuts mean our total revenues actually declined in 1996-97 and will decline again in 1997-98.

The federal cuts made preparing this budget one of the most difficult exercises our government has undertaken so far. I want to thank all of my colleagues, and Premier Filmon in particular, for their support and help in bringing this process to a successful conclusion.

Madam Speaker, in August 1988, we set out our core objectives. Let me quote from our administration's first budget: "Our goal is a competitive and diversified economy which will provide increased investment and job opportunities for our citizens, and pay for quality health, education and social programs."

Madam Speaker, I say to you with pride today, our commitment to those objectives has not wavered. As a result, we have made enormous progress toward meeting the goal we set for ourselves and for the people of Manitoba in 1988.

Madam Speaker, our government understood that balanced budgets are essential to a thriving and dynamic economy. We introduced a focused and disciplined approach to bringing government spending into line with revenue. We placed the highest priority on delivering quality health and education services, on supporting children, and on helping families. We protected services for disabled and other vulnerable people in our society. We immediately began the process of making our tax system more competitive.

We reformed internal processes and dramatically improved the efficiency of government operations. We insisted that taxpayers receive better value for their dollars in every single department of government.

In short, Madam Speaker, we restored responsibility and accountability to provincial government operations. By balancing our budgets and passing the balanced budget legislation, we have restored confidence among the entrepreneurs whose expansion and location decisions create the jobs, income and wealth on which our future depends. Today, we can point with pride to our progress so far and to the unparalleled prospects for sustained growth and job creation in our province.

Madam Speaker, responsible stewardship of our finances is key to Manitoba's economic success. Two simple, common-sense, fiscal objectives remain at the centre of our economic strategy:

* first, to keep Manitoba's taxes competitive; and

* second, to balance our books and reduce the burden of debt.

We followed this course consistently. We froze major tax rates, and deliberately and persistently brought the tax burden down through targeted tax cuts and incentives to create jobs. Then, as we put government finances back on a sound footing, entrepreneurs and investors became more confident that government would not suddenly reverse course and tax away the rewards of their efforts. With renewed confidence, businesses are willing to take risks and make long-term investments that create jobs and prosperity throughout our entire province.

* (1110)

Today, Madam Speaker, all Manitobans can be very proud of the performance of Manitoba's economy which outpaced the national average in 1996.

* Private capital investment grew by more than double the national rate in 1996 and is expected to exceed the national rate again in 1997. Firms, such as Purolator Corporation, Global Fashions Corporation, and Tantalum Mining Corporation are helping to give Manitoba a record of rising private investment that is the envy of most other provinces. Indeed, Manitoba is the only province to record five consecutive years of rising private investment. The total increase over that time--33 percent--was almost four times greater than the national increase. Statistics Canada expects that record to be extended to six consecutive years in 1997.

Madam Speaker, to build on this momentum, I am pleased to announce that the exemption for small businesses under Manitoba's Corporation Capital Tax will be increased from $2 million to $3 million. This measure is expected to take about 700 firms off the capital tax rolls and encourage small firms to undertake new investments and to create more jobs.

* Manitoba consumers also showed growing confidence as retail sales grew by more than double the national rate for the second year in a row.

* Building permits in 1996 increased 12.7 percent, double the national average.

* The growth in housing starts has surpassed the national average in four of the past five years. In 1996, housing starts were up 18 percent, or 50 percent above the national increase.

Madam Speaker, our government has worked hard to create favourable conditions for new home construction and to make quality housing affordable for Manitoba families.

Accordingly, Madam Speaker, I am especially pleased to announce that the sales tax rebate for first-time buyers of a new home in Manitoba will be extended for another 12 months. Our government introduced this measure three years ago to help make new homes affordable to young families buying their very first home. To date, the program has delivered over $1.9 million to help almost 900 Manitoba families purchase their first home.

* Madam Speaker, I am proud to say that Manitoba's balance on interprovincial migration improved in each of the seven years since 1989, after deteriorating in each of the previous seven years. This is the longest sustained improvement in over three decades. In 1996, Manitoba had a net gain of population from six other provinces, including Ontario. Out-migration has declined rapidly because the job and investment opportunities in Manitoba are steadily improving in relation to other provinces. Young people are finding jobs and staying right here in Manitoba.

* Small- and medium-sized businesses are among the most important generators of jobs, especially for young people in Manitoba. Our government recognizes that reducing payroll taxes encourages job creation, particularly in the small business sector. Since taking office in 1988, our government raised the payroll tax exemption from $100,000 to $750,000. Today, more than 90 percent of employers no longer pay this tax.

Madam Speaker, to stimulate more job creation, I am pleased to announce that effective January 1, 1998, the payroll tax exemption will be increased by another $250,000 to cover all employers with payrolls up to $1 million. About 600 employers, or about one-quarter of those now paying the tax, will be fully exempted. Employers with payrolls of up to $2 million will also have reduced payroll tax costs.

* Madam Speaker, one of the most striking features in our economy is the high level of investment that has taken place in our manufacturing sector in recent years. While manufacturing investment in Canada increased 5 percent from 1991 to 1996, the increase in Manitoba was 94 percent.

Manufacturers are enjoying the Manitoba advantage everywhere in our province, Madam Speaker. Midwest Food Products, for example, completed a $20 million expansion in Carberry last year. Vansco Electronics is undertaking an $11 million expansion of its Winnipeg facility that is expected to create over 400 new manufacturing and engineering jobs.

During my consultations, I was frequently told that the Manitoba manufacturing investment tax credit first introduced in 1992 is a key factor in Manitoba's outstanding performance in this sector.

Therefore, Madam Speaker, I am pleased to announce that the credit will be extended for three years to June 30, 2000. Extending that credit for three years will give firms a more predictable environment as they plan expanding their production capacity and creating more jobs for Manitobans.

* Manufacturing shipments surpassed the national average for the second consecutive year in 1996. In fact, last year's increase was almost three times the national average. Manufacturing shipments have increased to over $9 billion, a 47 percent gain since 1991.

* 1996 was also an outstanding year for Manitoba farmers. Farm cash receipts in Manitoba grew over 13 percent, the largest increase in the country and the biggest increase in Manitoba since 1979. This was the fifth consecutive year in which farm cash receipts have achieved new record levels. Madam Speaker, our farmers have every reason to take pride in their achievements.

* In 1996, Manitoba's total foreign exports rose 10 percent, more than twice the national increase. From 1990 to 1996, Manitoba exports to the U.S. more than doubled, far above the Canadian increase. A large part of that increase is due to value-added products, such as tractors, buses, computer parts, furniture, aircraft components and food products. Clearly, Manitoba companies and producers are competing successfully in the world's most competitive marketplace.

* Madam Speaker, this widespread strength in our economy is generating many thousands of jobs. In the first two months of this year, there were 20,800 more jobs than there were a year ago. Most of those jobs are full time and all of them are in the private sector. Our province's 4 percent growth rate is five times greater than Canada's. Most gratifying of all, the unemployment rate fell to 6.7 percent in February, three percentage points below the national rate. Our youth unemployment rate is almost five percentage points below the national rate.

Madam Speaker, Manitoba is working.

Let me be clear that our government is not claiming credit for our impressive economic performance. Manitobans as a whole deserve the credit, because whether we are entrepreneurs, employees, managers, educators, caregivers or public servants, the performance of the economy represents the sum of all our efforts. As a government, our objective is to nourish a climate of confidence that encourages people to buy a new home, to hire more people, or to start a new business.

More evidence of the increasing confidence that Manitobans have in themselves, in their economy and in their future, comes from a national membership survey conducted last fall by the Canadian Federation of Independent Business. The survey showed that Manitoba led the nation in the proportion of business owners who expect the performance of their firm will be stronger in 1997.

By managing our public finances responsibly, our government is achieving two very important objectives:

* first, to provide quality health, education and services to families by placing these services on a financially sound and sustainable footing; and

* second, to enable our economy to achieve its full potential and create quality jobs for all Manitobans.

These objectives are mutually reinforcing. If the economy is growing at a strong and sustainable pace, a stable and competitive tax structure will provide the resources needed for high-quality services. If government provides high-quality health care, education and other vital services, the economy will benefit.

* (1120)

Madam Speaker, there is no service that Manitobans value more than health care. Manitobans have access to one of the finest health care systems anywhere. Along with other Canadians, we have one of the lowest infant mortality rates in the world and among the longest life expectancies at birth. The Estimates I am tabling today show our government is firmly committed to ensuring that Manitobans have access to high-quality health care now and in the future.

In my prebudget consultations, it was apparent that many Manitobans have considered the challenges facing our health care system. They know that changing demographics and many other factors place new demands on the system. They are aware that the federal government has withdrawn funding for health care and that provinces are ever more "on their own" in this area.

Madam Speaker, there is absolutely no doubt that we will sustain our high-quality health care system. For the past nine years, our government has worked hard and creatively to secure health care services, and we are succeeding.

Madam Speaker, we have a plan with a clear focus: quality health care for all Manitobans. We are committed to implementing this strategy so that the highest standards of health care are secured for the future.

* We are shifting many elements of care from a high-cost institutional setting to more appropriate home care services. This budget provides $103 million for the Home Care Program in 1997-98, about two and one-half times the resources provided for this program back in 1987-88. Madam Speaker, our unrivalled home care services allow Manitobans to receive appropriate care and stay in their homes.

* We are consolidating a number of laboratories in order to reduce duplication of tests and equipment, standardize training and procedures, and reinvest those savings to direct patient care.

* To co-ordinate decision making across Manitoba, we have established 10 regional health authorities and the Brandon Regional Health Authority. In Winnipeg, we are establishing the Winnipeg Hospital Authority, and the Winnipeg Community and Long-Term Care Authority.

* The process of shifting from high-cost to community-based services is well under way in Manitoba. Nurse-managed care at the Youville Clinic, the Wellness Institute at the Seven Oaks Hospital, and many progressive, community-based mental health services across Manitoba are just a few examples.

* To be certain that all our reforms are effective and will result in measurable improvements, we are using the Manitoba Centre for Health Policy and Evaluation to monitor the results of each component of the strategy as it is implemented.

Madam Speaker, I am particularly pleased that our government has committed $1.3 million over three years for the new Aboriginal Health and Wellness Centre to be opened later this year. Partnerships are being developed with the aboriginal community and the federal and city governments to ensure more effective use of available resources for aboriginal health issues.

Last month, Madam Speaker, we announced that we are using $150 million of the proceeds from the sale of the Manitoba Telephone System to reduce the debt owed by hospitals and personal care homes. This frees up funds that will be used to improve facilities and deliver better services to Manitobans.

Madam Speaker, the Regional Health Authorities and the Winnipeg Health Authorities will be asked to assess the needs in their communities for acute and long-term care facilities over the foreseeable future. Their recommendations will be prioritized and considered by our government. In the meantime, I am pleased to announce that Manitoba Health will be working with the proponents of the following projects:

* Health Sciences Centre redevelopment,

* Brandon Hospital redevelopment,

* Boundary Trails Regional Health Centre, and

* Personal care home replacement or expansions for Lions Manor, Betel Home and Sharon Home.

Madam Speaker, my colleague the Minister of Health (Mr. Praznik) will announce a consultation process for these and other projects, along with the details of a community contribution policy.

Madam Speaker, our government has consistently given health care our highest and most urgent priority. In total, the budget for Manitoba Health will be $1.826 billion for 1997-98. This is 37 percent or $500 million more than budgeted back in 1987-88.

Thirty-four cents of every dollar in this budget, a higher share than in any other province, is dedicated to meeting Manitobans' health care needs.

Madam Speaker, we will continue to innovate and find the very best ways of delivering health services. By balancing our budget and keeping our economy competitive, we will have the funds needed to secure Manitoba's health care system now and for the future.

Madam Speaker, our government is committed to a strong and modern education system to prepare the children of Manitoba for the challenges of a rapidly changing world. The knowledge our children and youth possess, and the creative ways in which they apply it, will determine whether Manitoba thrives or stagnates in the decades and century ahead. This is the reality that educators and educational institutions in our province must address.

Madam Speaker, Manitobans told us they wanted higher standards and testing; more parental involvement; greater community participation; increased emphasis on language arts, mathematics and science; better use of technology; and more accountability. In short, they want the system judged not by how much we spend, but by how much our children learn.

Our path to education renewal emphasizes reading, writing, computing, and high-level problem solving. This budget provides an additional $4.5 million, bringing the total to $22.3 million for education renewal initiatives in 1997-98.

Madam Speaker, we are setting world-class standards for what students should know and be able to do, and we are introducing province-wide testing. It is critical that students, teachers, parents, trustees, prospective employers and taxpayers all work together to ensure that schools are delivering value in education.

Madam Speaker, all Manitobans recognize how important computers, communication, and information processing are in today's job markets. One of our highest priorities is improving access to computers and advanced technology, and providing distance education where appropriate in classrooms across Manitoba.

Together with school divisions and the federal government, we have provided $10.7 million through the infrastructure program to assist with distance education from kindergarten through the post-secondary education levels. Increasingly, Madam Speaker, Manitoba students can stay in their communities and receive a quality education.

Madam Speaker, today I am pleased to announce that we will also provide $1 million for a new program, Technology Learning Resources for Schools, that will put more computers in classrooms right across Manitoba.

Earlier this month, our government announced $24 million for school construction. Three new schools will be built and dozens more will be upgraded or repaired, Madam Speaker. In addition to improving Manitoba's public school facilities, 400 jobs will be created as work on these projects proceeds.

In January, Madam Speaker, my colleague the Minister of Education and Training (Mrs. McIntosh) announced stable public school funding for 1997-98 and 1998-99. As federal transfers stabilize and as our economy continues to grow, we intend to make multiyear funding commitments for other organizations which request such arrangements.

Madam Speaker, this budget provides $57 million for community colleges in 1997-98 and support to universities will total $214.6 million. Between 1993-94 and 1997-98, total operating grants for our universities have increased 5 percent on a per student basis.

Madam Speaker, to help our universities and colleges co-ordinate programs, avoid duplication and plan for future challenges, we established a Council on Post-Secondary Education.

* (1130)

It has always been a priority of our government to make advanced education a more affordable option for Manitoba families. Madam Speaker, from 1997 on, Manitoba students or their families will pay less Manitoba personal income tax as a result of last month's federal changes to the income tax treatment of tuition fees and the education credit.

Furthermore, Madam Speaker, I am also pleased to announce that we will introduce legislation that ensures the Manitoba learning tax credit, first announced in our 1996 budget, reflects these changes.

For the 1997 tax year, the Manitoba learning tax credit will provide $17.3 million, or $5.3 million more than budgeted last year. This is the first and only refundable tax credit in Canada that provides direct support to students and to their families.

Madam Speaker, while tuition fees in Manitoba community colleges and universities are among the lowest in Canada, we are determined that successful students are able to pursue a post-secondary education in Manitoba.

Accordingly, Madam Speaker, the 1997 budget provides for a new $1 million initiative to encourage our universities and community colleges, along with their supporters in the community, to establish scholarships and bursaries for our accomplished students. Under this initiative, our government will add $1 to every $2 raised by universities and colleges.

Madam Speaker, our government recognizes that by 2005, it is estimated that 25 percent of new entrants into Manitoba's labour force will be aboriginal. Preparing all our young people for jobs is an urgent priority for our government.

Accordingly, Madam Speaker, I am pleased to report that our government is working with the Government of Canada to launch a new $1.4 million initiative, Partners For Careers. The program will help place aboriginal high school, college and university graduates into positions in the private and public sectors. These graduates will provide more role models and lead to sustained improvement in long-term employment opportunities for aboriginal youth.

Our total commitment to education in 1997-98 is $1.03 billion, almost $12 million more than allocated last year. I might note that this is $280 million or almost 38 percent more than the amount allocated in the 1987 budget.

Madam Speaker, the purpose of education is to prepare our children for the challenges and opportunities that emerge as we approach the next century. Together with our community partners, we will accomplish this goal.

Madam Speaker, our government believes that Manitobans want to be self-reliant, to earn an income and make a contribution to their community. I am very pleased that our government has again been able to increase funding to provide services and supports for adults with a mental disability and for families of children with a disability.

This budget provides for an increase of $4.4 million or 7 percent for Adult Services to help support more adults with a mental disability to live as independently as possible in community residences or apartment settings. The 1997 budget also increases the resources available to provide respite to families and other primary caregivers. Over the last 10 budgets, this government has injected almost $30 million more into the Adult Services system, which is an increase of more than 60 percent.

In 1996-97, we saw an increase in the need to provide support for families who have children with a disability and we met that need. I am pleased that for 1997-98, our government has increased funding for Children's Special Services by almost $2 million, or close to 30 percent.

Madam Speaker, we are continuing our work to remove barriers between welfare and employment. We would like to see all Manitobans have good jobs and earn good incomes. We have worked diligently to help more people achieve self-reliance through Making Welfare Work initiatives such as:

* the Community Services and Rural Jobs Projects;

* the Manitoba Conservation Corps;

* Opportunities for Employment;

* Youth NOW; and

* Taking Charge!

Madam Speaker, we are continuing our partnerships with community groups and industry to create opportunities and help social assistance recipients to move from social assistance into the workforce.

A good example of what can happen when training and placement programs are developed in partnership with industry, Madam Speaker, is the Transport Driver Training Program. Transportation, and trucking in particular, is one of Manitoba's most important and forward-looking sectors. Our trucking firms are growing and are encountering shortages of trained drivers.

Accordingly, our government will commit over $500,000 to the Transport Driver Training Program in 1997-98. We expect about 225 participants will be trained to step into the unfilled jobs in this industry. About one-half will be social assistance recipients, and the vast majority of trainees will secure jobs with Manitoba trucking firms.

Madam Speaker, we are encouraged by the success of these programs in helping hundreds of people find jobs. This budget allocates $8.9 million or $1.5 million more than budgeted in 1996-97 to Making Welfare Work.

Manitobans also want to ensure all children are given a chance to lead normal and productive lives. This budget supports that priority by committing $104.4 million to the agencies that are responsible for the care and maintenance of children at risk.

Our government wants all Manitoba children to have a healthy start in life. Manitoba social assistance benefit rates for households with children are among the highest in all of Canada. We have ensured that single parents retain the option of staying home to care for preschool age children.

We have been actively working with other government and private community representatives to enhance the nutrition of children. In 1997-98, we will be announcing initiatives totalling an estimated $300,000 in this area.

Madam Speaker, this budget continues our support for daycare in Manitoba at $40.5 million in 1997-98. Single parents who want to work to support their families need access to reliable, quality child care services. Together with child care organizations and providers, the Department of Family Services will develop recommendations for a more flexible and accessible child care system for Manitoba.

Madam Speaker, the best form of social security is a job. Our growing economy is generating sustained investment, and our businesses are creating the jobs people need in order to move into the workforce.

Madam Speaker, all Manitobans shared in the effort to put our financial house in order, and all Manitobans should take pride in our success. As we begin to realize the economic benefits of nine years of sound management of our province's finances, we want all of our citizens, and especially the children and youth of Manitoba, to share in the rewards as they are realized.

Madam Speaker, by beginning to repay the accumulated debt, we are giving the leaders of tomorrow the opportunity to shape the destiny of Manitoba in the way that they choose.

Madam Speaker, we have introduced measures, such as the Manitoba tax reduction, that provides significant benefits to lower-income Manitobans supporting children. This reduction, which provides up to $250 of tax relief per child, is one of the few tax benefits in all of Canada that is related to children. We are leaving more money with parents, who know their children's needs the best. The Manitoba tax reduction delivers about $30 million each year in the most immediate form available--on employees' pay cheques.

Madam Speaker, our government welcomes the National Child Benefit announced in last month's federal budget targeted for implementation next year. The National Child Benefit follows on the initiative of provincial Premiers to work toward a national approach to assistance for children in low-income families. Manitoba, along with other provinces, will redirect any savings in provincial social assistance toward services and benefits for children.

Our government will also consider other measures to ease the ability of parents to enter or re-enter the workforce. We will work with other provinces, territories and the federal government to finalize this initiative this summer. My colleague the Minister of Family Services (Mrs. Mitchelson) is leading Manitoba's contribution to this important initiative to improve the lives of children and their families everywhere in Canada.

Madam Speaker, the nutrition of students in Manitoba schools is one of the many factors being addressed in partnership with social services agencies and schools. Our government recognizes that proper nutrition is vital to learning. With our government's Students at Risk funding, some urban, rural and northern schools are currently providing nutrition programs.

Our government created the Children and Youth Secretariat to help co-ordinate provincial measures and initiatives for the benefit of children. Today, Madam Speaker, I am pleased to announce the creation of a new $500,000 fund--ChildrenFirst--which will be used to develop new approaches to improve the lives of children and their families within their communities.

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Madam Speaker, while youth unemployment remains a significant concern to our government, Manitoba's youth unemployment rate was second lowest in Canada in January and February, and almost five percentage points below the national average.

Madam Speaker, our economy is producing jobs at well above the national rate. There are growing shortages of skilled employees in many sectors of our economy. The challenge is to help our young people turn these opportunities into paying jobs.

The government will continue with its commitment to student and youth employment programs. In 1997-98, it is expected that close to 15,000 students and youth throughout the province will be assisted by our many successful programs. We are developing partnerships with federal departments and with the private sector to ensure that provincial dollars are used effectively to maximize the job opportunities for Manitoba youth.

Madam Speaker, I am pleased that Manitoba is recognized across Canada as a leader when it comes to improving our justice system and enforcing tougher penalties on criminals. Manitobans have told us that this is one of their high priorities. We want to feel safe on our streets, in our communities and in our homes.

In 1995, we announced that we would provide $2 million a year for seven years, for a total of $14 million, for community policing in Winnipeg. This is enough to pay for 40 officers a year to police the streets of Winnipeg. Madam Speaker, our government is encouraged by the public support expressed for this initiative. The 1997 budget funds the program's third year of operation.

Madam Speaker, I would also like to confirm that funding for two urban sports camps initiatives will be extended. The Central Park Youth Recreation Centre Project, and the Youth Drop In Centre and Athletic Club offer inner-city youth athletic, recreational and cultural activities as alternatives to gang-related activities. These worthwhile projects are funded by the Urban Safety Program under the Winnipeg Development Agreement.

That program, Madam Speaker, also helps fund two educational programs offered by the Winnipeg Police Service: the Alive program which will be delivered in Winnipeg schools to teach students about consequences of breaking the law, legal rights, and responsibilities; and the CounterAction program to help businesses determine ways of reducing the opportunity for crime.

Madam Speaker, this budget maintains funding for Victims Assistance. My colleague the Minister of Justice (Mr. Toews) will shortly provide details on other justice initiatives designed to prevent crime and improve the justice system in Manitoba. This budget provides $1.5 million for these measures.

Madam Speaker, in our ongoing efforts to prevent crime in rural areas, this budget commits resources for an improved telecommunications system for the RCMP. Last year, our Premier (Mr. Filmon) and the mayor of Brandon announced a partnership arrangement for the phase-in of the new 911 emergency response communications services to most communities south of the 53rd parallel. I am pleased to report that rural 911 is up and running.

Madam Speaker, I am pleased to announce that provincial support to our local municipal governments will increase in 1997-98. This is in marked contrast to the federal government, which has achieved virtually all of its program expenditure cuts over the past few years through reductions in transfer payments to the provinces. This budget provides $48.8 million for the Department of Rural Development, up 1.9 percent; and $72 million for the Department of Urban Affairs, up 1.8 percent.

Madam Speaker, another example of our strong provincial support for local governments was our recent announcement of payments under the Provincial-Municipal Tax-Sharing Act (PMTS).

Madam Speaker, I am also pleased to announce that our government is prepared to renew the Urban Capital Projects Allocation, a fund worth $96 million over the next six years. This fund will provide resources for priority capital projects, street renewal, transit and other project improvements to facilities and infrastructure in the city of Winnipeg. My colleague the Minister of Urban Affairs (Mr. Reimer) will provide further details of this program.

Madam Speaker, we are also working together with communities threatened with flooding this spring to develop an effective response plan. The budget doubles the amount allocated to deal with emergencies of this nature to $20 million from the $10 million allocated last year.

In the last session of this Assembly, Madam Speaker, we introduced a wide range of measures to improve the investment climate in our province to enhance job creation and to generate new income and wealth.

Madam Speaker, the Workers Compensation Board has been put on a sound footing. Since 1988, average Workers Compensation rates have already fallen by over 9 percent and will fall by a further 5 percent each year until 1999.

Madam Speaker, over the last nine years, our government has made reducing the burden of excessive red tape and regulations a major priority. Later this session, we will be introducing simplified tax filing and remittance options for small businesses.

Our fiscal and structural reforms encourage firms to expand and locate in our province. Madam Speaker, this budget also maintains funding available for economic development initiatives.

* The Manitoba Industrial Opportunities Program, MIOP, provides loans conditional on firms meeting their job creation commitments. This program has been instrumental in helping Manitoba-based firms expand in our province and in bringing others to Manitoba.

* Madam Speaker, the Pine Falls Paper Company provides an instructive example of how important such support can be. Pine Falls Paper embarked on an ambitious $65 million capital upgrade project. The province assisted this endeavour with a commitment to provide a repayable loan of up to $30 million. During the past year, the project was completed on budget and on time. The province was called on to advance only $5 million of the $30 million available. This year, Pine Falls Paper intends to fully repay the loan and will then commence its next round of significant capital expenditure.

* With the support of a repayable loan from MIOP, Isobord Enterprises is constructing a $142 million plant in Elie to produce environmentally friendly composite board from straw. The project is creating 300 jobs during the construction phase, 100 permanent jobs at the plant, and 100 contract jobs for the straw collection operation each fall. Madam Speaker, there can and will be more such successes. This budget allocates $11.9 million to MIOP initiatives in 1997-98.

* The Rural Economic Development Initiative funded infrastructure that helped McCain Foods to expand its potato processing plant in Portage la Prairie, Rea Gold to redevelop a gold mine near Bissett, and CanAgra to build a canola crushing plant near Ste. Agathe. These three projects alone will create some 400 jobs.

Madam Speaker, I am also pleased to announce that we are extending Business Start for another two years. This program has been especially successful in providing funds for women and rural entrepreneurs to start businesses.

When our government set out its Framework for Economic Growth in 1993, we identified capital market development as one of the key strategic areas. As pointed out in the Framework, "capital is the engine of business and employment growth." By developing ways for Manitoba businesses to tap local sources of capital, we can help those businesses reach their full job-creating potential.

One such initiative was launched in 1991, when our government established Manitoba's first Labour-Sponsored Venture Capital Corporation, the Crocus Investment Fund.

Today, Madam Speaker, I am pleased to announce that legislation will be introduced in this session allowing for the formation of other provincial labour-sponsored venture capital corporations.

Madam Speaker, we are also working closely with Manitoba's investment community to expand the role of the Winnipeg Stock Exchange enhancing the ability of local firms to raise equity capital.

Madam Speaker, our farmers have shown they are capable of meeting the challenges of global competition. However, like farmers everywhere, their success depends on the co-operation of nature. Assisting farmers to obtain adequate crop insurance protection has always been a priority of our government. Accordingly, we have introduced enhancements in the coverage provided by the Manitoba Crop Insurance Corporation.

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The farm community has told us that research is key to achieving and maintaining a competitive edge in farming. By diversifying and investing in new technologies, Manitoba farmers are laying the basis for new industries and revitalized communities in rural Manitoba.

Accordingly, Madam Speaker, I am pleased to announce that we are committing $3.4 million to support a new Agri-Food Research and Development Initiative.

Madam Speaker, mining is a billion-dollar industry in Manitoba. Directly and indirectly it provides thousands of jobs in communities from Virden in the southwest to Lynn Lake in the North and Bissett in the east. In just the past year and a half, four mines have come into production and others will open this summer. These mines have created well-paying jobs and assured the continued viability of several Manitoba communities.

Madam Speaker, to further enhance the competitive position of our mining industry, I am pleased to announce that diesel fuel consumed in off-highway transport of ore from mine sites to processing facilities will be exempt from the motive fuel tax starting October 1, 1997.

During the last election, Madam Speaker, we made a $1.5 billion commitment to capital spending over this term of our administration. Our basic infrastructure is critical to Manitoba's long-term prospects. Maintaining our highways, bridges and airports is a key element of our future as a major North American transportation hub.

Madam Speaker, our government has a strong commitment to Manitoba's highway construction program. This budget commits an additional $1.3 million of provincial funds to maintain and improve our roads, highways and bridges.

Beginning with the Premiers' Conference last August, Madam Speaker, Manitoba has pushed hard for a renewal of the Canada Infrastructure Works Program. Of the nearly 400 projects announced, close to 250 are now completed. Some 3,400 jobs were created and all areas of Manitoba are benefiting from better roads, better facilities and more opportunities for work and enjoyment. This program is an unqualified success.

The Infrastructure Program supported traditional infrastructure, such as the Sanford Water Treatment Plant, and such innovative projects as Foundations for Health Research Centre, the South Winnipeg Technical Centre and the Manitoba Museum expansions. The Infrastructure Program has helped improve both Manitoba's competitiveness and our long-term job creation prospects.

Madam Speaker, we have allocated $22 million for the Infrastructure Program for 1997-98. Together with our federal, municipal, and other partners, $66 million will be made available for projects across Manitoba.

Earlier this year, Madam Speaker, the Winnipeg International Airport was transferred from the federal government to the Winnipeg Airport Authority. Work is also proceeding on Winnport, a plan to make the Winnipeg International Airport the hub of a major international transportation network.

Our government is committed to the future of the Winnipeg International Airport. To assist the Airport Authority's efforts in attracting new passenger routes and creating new jobs, Madam Speaker, I am pleased to announce that the tax rate on aviation fuel will be reduced by 1 cent a litre, from 4.2 cents per litre to 3.2 cents per litre, effective October 1, 1997.

Madam Speaker, Manitobans can be proud of the way they support artistic and cultural endeavours in our province. According to Statistics Canada, support for Manitoba's performing arts companies was $22 per capita, much higher than the national average.

So, Madam Speaker, it is not surprising that one of the most remarkable success stories of the last several years has been the spectacular growth of Manitoba's film and video industries. If the projections for 1997 hold, this industry will have grown fiftyfold just in the last 10 years. Our government has supported the industry through establishing the Manitoba Film and Sound Development Corporation. Manitoba artists and production companies are making their presence felt across the continent and beyond, creating local opportunities for Manitoba's abundant home-grown talent.

Madam Speaker, I am pleased to announce that our government will introduce the Manitoba Film and Video Production Tax Credit. The credit will encourage more Manitoba-based productions and create opportunities and jobs for the abundant talent Manitoba has in this industry. The credit will be in place for three years and will be 35 percent of all eligible payroll costs.