Check Against
Delivery
Wednesday,
March 24th, 2004
Looking
back to Alberta’s beginning
Mr.
Speaker, in just over nine months, Alberta will begin to celebrate
its 100th birthday. And what a remarkable 100 years it has been.
Like most landmark birthdays, celebrating our province’s
centennial is an opportunity to look back at the amazing changes
that have taken place since the early settlers ventured out west
to break ground and build a new future. It’s also an opportunity
to look ahead and to envision Alberta’s next century.
As
Premier Klein said, “let’s make sure Albertans enter
the province’s second century with the same spirit of hope,
determination and confidence as Albertans had in 1905 when our
first century began”. Before I get into the details of this
year’s budget, I want to take us back to where this all
began – and that’s with Alberta’s very first
budget.
Picture
this. Edmonton, May 7th, 1906. Honourable A. C. Rutherford, then
called the “Prime Minister” of Alberta and also the
Provincial Treasurer, stood, not in this building but a few blocks
away at McKay Avenue School, and delivered Alberta’s first
budget. Looking at that budget today, two things are striking.
First, the simplicity and how small the numbers were. And secondly,
the parallels between then and now.
Fiscal
responsibility seems to have been bred in the bones of Albertans.
Alberta’s very first budget was balanced. In fact, they
projected a surplus of $283,373.32. And this year, I’m proud
to tell you that Alberta’s budget is balanced for the eleventh
straight year. Back in 1906, when Alberta was brand new, one of
the top priorities was infrastructure – building roads and
bridges, building schools, digging ditches and water wells, and
building the very first Normal School for training teachers.
Investing
in Alberta’s infrastructure was critical at the beginning
of Alberta’s first century, and it is just as critical as
we approach Alberta’s second century. Look through that
first budget and you’ll see a line item outlining an investment
of $140,000 for the construction of this beautiful building –
Alberta’s legislature building. Imagine what $140,000 would
build today and imagine the foresight they had in designing this
wonderful legacy.
Even
in 1906, Alberta’s leaders were looking at value-added agriculture
and how to build a strong agricultural economy. Back then, they
invested $250,000 in creameries to launch the province’s
dairy industry. Today, we’re struggling to deal with the
impact of BSE, to get the borders open, and rebuild confidence
in Alberta’s food industry. And Mr. Speaker, we will succeed.
Education
was another big priority in that very first budget, just as it
is today. But back then, they spent a whopping sum of $200,000
and had ambitious plans for 800 schools by the end of the year.
Today, $200,000 would pay for about two classrooms and we have
thousands of them across the province.
One striking difference is in health care. You’ll see today
that health care is taking up more and more of the provincial
budget and its costs are growing at a dramatic rate. Not so in
1906. The entire budget for what was then called Hospitals, Charities,
and Public Health was $33,500 and it warranted only one line in
the budget speech.
On
taxes, there was no such thing as personal income taxes. But Premier
Rutherford served notice that it would be right and proper to
tax lands outside of school districts for school purposes. And
because most of the provinces received revenue from corporations
like insurance companies, banks, loan companies and telephone
companies, he could see no reason why Alberta shouldn’t
as well. And so corporate taxes were launched.
Much
to my surprise, even then they were talking about Ottawa and guns.
But in this case, the budget set aside $1,200 for the Provincial
Rifle Association to go to competitions in Ottawa.
Mr.
Speaker, it’s fun to look back at the numbers and to see
how things have changed since our province’s early days.
But to me, the most important lesson in Alberta’s first
budget comes in this quote from Premier Rutherford. He said:
“We
have no pessimists in Alberta – a pessimist could not
succeed. We are optimistic, and always look on the brighter
side of affairs, and so long as we keep progressing in the future
as we have in the past, we will, without a doubt, become the
great premier Province in British North America.”
In
1906, there was no room for pessimists in Alberta. There is no
room for pessimists today.
Albertans
are mavericks – people who look challenges square in the
face and see hope – hope for better solutions, hope for
a better future for ourselves, our families and our province.
That was true in 1906. And it’s certainly true today. Mr.
Speaker, optimism and hope for the future are what this year’s
budget is all about.
This
is a budget for Albertans. It’s the budget Albertans have
asked for through countless meetings, letters, e-mails, phone
calls and consultations. Albertans want their children and young
people to have the best education we can provide. And they’ll
get that with this budget. They want their health system to be
there when they need it. And this budget will help make that possible.
They want strong and safe communities, a thriving economy with
jobs for themselves and a strong future for their children, right
here in Alberta. They want to make sure children get a safe and
healthy start in life, family violence becomes a thing of the
past, and seniors and people who need help get the support they
need.
All
of those expectations are addressed in Budget 2004. Frankly, Mr.
Speaker, this is a budget that would only be possible in a province
like Alberta. We have choices that simply are out of the question
in many other parts of the country. We are a prosperous province
– a province that’s blessed with an abundance of resources
and driven by the hard work of determined Albertans.
The obligation of a prosperous province is to invest wisely –
not to squander our resources – but also not to refuse to
spend money where there are pressing needs and the opportunity
to build a better future. That’s the goal of Budget 2004,
Mr. Speaker. To seize every opportunity and to put our province
on route and on course for unparalleled success in our second
century.
Budget
2004 Highlights
Let
me now turn to the big picture and the highlights of Budget 2004.
With this Budget, we will spend a total of $22.6 billion. That
includes an increase of 6.1% in operating spending for government
programs and services. We expect the province’s total revenues
to be just under $23 billion. That’s a 9% decrease from
the current year’s budget, primarily because, like most
private sector forecasters, we are assuming that the price of
oil and gas will return to more sustainable levels this year.
As announced, the amount of resource revenues we can spend each
year on programs will increase from $3.5 to $4 billion this year,
an amount we are confident can be sustained.
In
1906, Premier Rutherford served notice to corporations to get
ready to pay taxes to support essential government programs. Today,
I’m serving notice that, for the fourth straight year, taxes
for Alberta’s businesses will go down. The general corporate
tax rate will drop from 12.5% to 11.5%. That’s one step
closer to our target of 8%. The small business rate will drop
from 4% to 3%. Together, these reductions amount to savings of
$142 million this year for businesses that drive Alberta’s
economy and create lasting jobs for Albertans. We also will take
steps to enhance Alberta’s reputation as a business-friendly
jurisdiction. Legislation dealing with income trusts and unlimited
liability companies will be introduced this year.
Mr.
Speaker, businesses are not the only ones to benefit from tax
changes this year. Thanks to indexing of our 10% single-rate personal
tax, Albertans will save $150 million in personal income taxes
this year alone. School property tax rates are going down by 2.3%,
saving Albertans and Alberta businesses about $20 million dollars.
Since 1993, our government has dropped education property tax
rates by over 27%. Overall, Mr. Speaker, Albertans pay the lowest
personal and business taxes in the country, and there is still
no sales tax.
Our
record on debt repayment is unparalleled. In the early 1990s,
our province was burdened by a crippling debt of $23 billion dollars.
My fondest wish would be to stand here today and say, by the end
of this year, Alberta’s debt will be gone. But that would
be speculation, and budgets are not about speculation. By March
2005, our debt will have dropped to just under $3 billion, a drop
of nearly 90%. That puts us within striking distance of eliminating
the debt, a truly remarkable achievement.
And
I can tell you that if, and I say if, resource revenues are considerably
higher than our forecast my vote, and the Premier’s vote,
will be to seize the opportunity and hand Albertans the best gift
we could provide. The gift of a debt-free province.
Mr.
Speaker, I know that many people looking at today’s budget
will say the forecasts are too low. How could we expect oil and
gas prices and our resource revenues to drop when things are looking
so good? Most industry observers expect energy prices to go down.
The question is when and by how much. Because energy prices are
always an unknown factor, our forecasts may be too low. They may
be too high.
The
reality is that, with Alberta’s new fiscal framework, our
budgets are no longer tied to the ups and downs of oil and gas
prices. We don’t need to watch the daily news, wondering
what impact the latest shock will have on our budget. We have
protected Albertans against those shocks. Spending $4 billion
from resource revenues is the limit. That’s all we can or
will spend in the budget. The only difference the price of oil
or gas makes is at the end of the year, when we have some real
choices to make. If oil and gas revenues are higher than we expect,
and I truly hope they are, we have two choices and only two choices.
We can put more money down on the debt or we can invest more in
assets, including capital.
Mr.
Speaker, we can’t underestimate the strength of our new
fiscal framework. Not only does the Sustainability Fund protect
us from the ups and downs of resource revenue, but it also allows
us to respond to emergencies when they occur. This past year alone,
the Sustainability Fund was there to provide assistance to farmers
and ranchers, to cover the extraordinary costs of last year’s
forest fires, and to shelter Albertans from high natural gas prices.
This new fiscal plan works. It works for Albertans today. And
it will keep working for Albertans as we begin our next century.
Mr.
Speaker, another concern some may have about today’s budget
is the level of spending. It’s a lot of money. And for someone
like me who keeps a careful eye on the bottom line, I have to
admit it gives me some pause for thought. But I am convinced of
two things. First, we are investing wisely in things that matter
most and will help build a better future. And second, to quote
Premier Rutherford, there are no pessimists in Alberta.
We
are confident Alberta’s economy will continue to grow, creating
jobs and prosperity for Albertans and for our province. And with
continuing strong growth, we will be able to afford this level
of spending now and in the years to come. Furthermore, Mr. Speaker,
we’re not going to leave Alberta’s future prosperity
to chance. Last week, our government unveiled a comprehensive
20- year plan to build a strong future for our province. The plan
is built on four key pillars:
Budget
2004 is designed to address each of these pillars and to put Alberta
on course to a bright and prosperous future. Today, I want to
highlight four key areas that underpin our plans.
Learning
First
on learning. Our strategic plan commits us to be leaders in learning.
And action on that commitment begins today. With Budget 2004,
program spending on basic and post-secondary education will increase
by 5.7% to $5.3 billion. In basic education, an additional $216
million will be spent in 2004-05. The vast majority of that funding
will go directly to school boards to be spent in classrooms across
the province.
A
new funding framework will be implemented, giving school boards
the flexibility they need to meet local priorities and local needs.
Our approach is not to tell school boards how to spend the money.
But we are confident that, with the increases provided today,
they will take positive steps to address parents’ number
one concern and that’s class sizes. The first priority should
be making sure that children who are just starting school have
the opportunity to learn and succeed in classes where they are
not lost in the crowd.
Our
government has stated its commitment to implement other key recommendations
from the Learning Commission report. And further plans will unfold
in the weeks and months ahead. Mr. Speaker, the importance of
education doesn’t end when students graduate from high school.
In a highly competitive global marketplace, success depends on
a well-qualified, highly skilled and productive workforce, driven
not just by hard work, but by ideas, creativity and innovation.
With
Budget 2004, we will provide an additional $85 million in ongoing
funding to colleges, technical institutes, universities, and apprenticeship
programs across the province. On top of a base funding increase
of 4%, increased Access Funding will create up to 2,000 new spaces
over the next four years in high priority programs. Funding for
scholarships, bursaries and grants will increase by over 10% and
close to 28,000 students will benefit from scholarships in 2004-05
alone. We will also invest $39 million to reduce students’
debt load and reward them for successful completion of their programs.
Budget
2004 also begins our government’s new investment in the
future of Alberta’s children. Through the Alberta Centennial
Education Savings Plan, our government will join with families
across the province in investing in Registered Education Savings
Plans for each and every child born or adopted in Alberta, starting
in January 2005.
Health
Let
me turn from education to the second big area in this year’s
budget, and that’s health care. In Budget 2004, health will
continue to take up the largest share of total government spending.
This year alone, spending by Health and Wellness will increase
by 8.4% to a total of $8 billion. Mr. Speaker, increasing costs
in health care are causing alarm bells not only here in Alberta
but all across the country.
Our Premier has led the charge, warning Albertans that the future
sustainability of our health system is at risk if we continue
to pour more and more money into the status quo.
Premiers across the country unanimously have said that unless
there are major changes, Canada’s health care system as
we know it will not survive the decade. The health care spending
path we are on today is simply not sustainable.
In
the last nine years, spending on health has more than doubled.
More than fifty cents out of every additional operating dollar
in this year’s budget goes to health care. That can’t
continue. In the past three years, our government has taken some
good steps to renew and sustain our health system. But our message
to Albertans, to the federal government, and to all Canadians
is something has to give.
We are spending more and more money on health care. And I have
no doubt you will hear in the weeks and months ahead that it isn’t
enough. If an increase of 8.4% is not enough in a province like
Alberta, how can other provinces expect to sustain their health
systems? Mr. Speaker, this is a national issue that will be played
out in every province across the land. Yesterday's federal budget
provided some welcome cash, but no long-term commitment to sustainable
funding. Canadians deserve better.
We're
not waiting for the federal government. Once again, Alberta will
take a strong leadership role, trying new ideas, and implementing
new solutions to keep our health system on a sustainable track.
As Premier Klein has said, we should put up signs on highways
coming into Alberta saying, “Welcome to Alberta. Be prepared
to think differently.” Albertans can expect to hear more
this year about new ways to renew and sustain the health care
system. I encourage them to consider each of the ideas with an
open mind and a fresh willingness to embrace change, because that’s
the only way we will preserve and protect Alberta’s public
health care system.
Capital
Plan
The
third area I want to highlight is our capital plan. All forecasts
point to continued strong growth in Alberta’s economy. In
fact, we expect Alberta’s economy to grow by 3.6% in 2004.
That translates into close to 43,000 new jobs this year and the
lowest unemployment rate in the country. It also means more people
are choosing Alberta as the place to invest and build their futures.
All of that is good news to an already prosperous province. But
it also means increasing strain on Alberta’s infrastructure.
For
that reason, our new Capital Plan will increase our investment
in essential capital projects to $6.5 billion over the next three
years, an increase of $900 million.
Mr. Speaker, that level of capital investment is unmatched anywhere
in Canada. With that investment, we can assure Albertans that:
-
New
schools will be built and others will get the renovations
they need
-
New
space will be added to universities, colleges and technical
institutes
-
Leading-edge
health facilities, long-term care centres, and new health
equipment will help give Albertans access to quality health
services
-
Alberta’s
network of roads and highways will be expanded and improved
-
And
money will be invested in important capital projects including
parks, housing, water & wastewater treatment, centennial
projects, and community facilities.
Communities
Mr.
Speaker, the final area I want to highlight today is communities.
I’ve heard it said that everything that’s important
happens close to home, in communities where people live, work
and raise their families. A key part of Alberta’s new strategic
plan is to make Alberta the best place to live, work and visit.
That starts with safe, secure and vibrant communities.
In
recent months, we’ve heard about the fiscal challenges faced
by Alberta’s municipalities. And today we are introducing
a package of initiatives to address those concerns. The first
is policing. Provincial support for policing programs will increase
by 50% this year to a total of $174 million. As a result of that
increase, municipalities with populations under 5,000 will no
longer pay for policing costs. That’s a direct benefit to
an additional 20 small communities across the province. $37 million
will be spent on a new per capita policing grant for larger municipalities.
And additional funds will be available to address other critical
policing issues.
Important
changes will also be made this year to ambulance services. Our
government has received several reports indicating that ambulance
services are health services and should be integrated with the
health system. Starting this year, we will begin the transition.
We will consult with municipalities and health regions, and develop
plans for shifting responsibility for ground ambulance services.
By 2005-06, funding to health regions for ambulance services will
increase by $55 million. And the good news for municipalities
is that this will free up money they can spend to meet other pressing
needs.
Work
is also underway on a new rural development strategy. While our
government works hard to reopen the borders and restore confidence
in Alberta’s food industry, the impact on many rural communities
has been devastating. This year, our government will build on
the work done by two MLA’s: The Honourable Member for Wainwright;
and The Honourable Member for Innisfail-Sylvan Lake – to
develop a comprehensive Alberta Strategy for Rural Development.
On
top of those initiatives, Mr. Speaker, municipalities will also
receive:
-
$934 million over the next three years for transportation
projects supported through the municipal share of gas taxes
and other provincial grant programs
-
Increased
funding for Alberta’s centennial celebrations to support
community, cultural and historic facilities
-
Additional
capital funding for projects such as water and wastewater
treatment projects and
-
Interest-free
loans to improve energy efficiency.
Mr.
Speaker, that package of initiatives may not solve all the challenges
faced by municipalities, but it will go a long way to free up
essential funds and relieve the burden on local taxpayers.
As
usual, Mr. Speaker, there is never enough time to highlight all
of the many initiatives in our government’s annual budget.
I can tell you that additional funds are also included for expanding
programs for children, implementing a comprehensive approach to
preventing family violence, improving maintenance enforcement,
supporting people with disabilities, and providing much needed
assistance to seniors and to people who need our support.
I
encourage all Albertans to review the budget and find out more
about these important developments.
Conclusion
Mr.
Speaker, let me close today by summarizing the highlights of Budget
2004. It’s a budget for Albertans. A budget that reflects
our hopes, our dreams and our optimism for the future. It’s
a budget that will provide our children with the best education
and the best opportunity to learn, succeed and build their futures.
It’s a budget that invests heavily in our health care system,
but also positions us to explore innovative approaches and seize
the opportunity to secure a sustainable future for health care.
It’s
a budget that will see new schools, new buildings on post-secondary
campuses, new health facilities, new roads and highways. It’s
a budget that keeps Alberta’s taxes the lowest in Canada.
And it’s a budget that puts us firmly on route to a prosperous
and successful second century.
It
is a deep honour and a privilege to serve Albertans and to present
the province’s 99th budget. Like Finance Ministers before
me, I stand here today filled with hope about the future of our
province and confident that our budget plans will help secure
the kind of future we all want for ourselves, our families and
our province.
As
Premier Klein has often said, “given a choice between the
past and the future, Albertans will choose the future every time”.
Albertans began our first century with their eyes on a better
future. They were filled with hope, ready to take on tough challenges,
and confident they would succeed. That same confidence, that same
spirit of optimism and determination, remains a hallmark of Alberta
today.
Premier
Rutherford was right. There are no pessimists in Alberta. Not
then. Not now. We have become the great province Premier Rutherford
envisioned back in 1906. Now we are on route to Alberta’s
next century.
And
I have no doubt it will be even better than the first. Thank you
Mr. Speaker. And thank you Albertans.
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