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The 2000 Provincial Budget Address
Presented March 17, 2000
See also restated May 23 address
A Balanced Agenda
MR. SPEAKER, Members of the Legislative Assembly.
This is the fourth budget that I have had the privilege of presenting to this
Assembly and to the people of Prince Edward Island. I am pleased to report
that over that time the Province has witnessed an unprecedented improvement in
its economic and financial performance.
This Budget takes on special significance because it is the first of the new
Millennium. It is also positive proof that our policies in the last years of
the 20th century have placed the Island in a strong position as we begin the
21st century.
We are all aware that budgets are important indicators of the financial and
economic health of the Province. As I stated a year ago, a budget is more than
numbers, it is about building a secure future for individual Islanders. It is
about providing a better standard of living; it is about optimism and
opportunity; it is about fair rates of taxation and the effective delivery of
public services. This Budget will further build on the successes of past
budgets. We can look forward to the coming century on the basis of a strong
and solid foundation and I am extremely proud of our accomplishments in this
regard.
Public Input
An integral part of our Budget making process is to assess the needs of all
Islanders. Helping us in this regard have been the many groups and individuals
who have taken the opportunity to provide their advice and opinions. In this
context I am encouraged by the new found sense of self reliance that was
evident in these discussions. Islanders are talking about growth, investment
and the future. I have witnessed a profound interest in the development of our
Island economy. I am taking this opportunity to personally thank the many
people who have participated in developing this Budget, both internal to
Government and those from the community at large who took the time to discuss
their ideas and plans with me. As a result of these discussions, our
Government sets forward a budget with a balanced approach to addressing the
issues affecting Islanders.
Fiscal Performance
Mr. Speaker, I feel we have a great deal to be proud of.
Our fiscal and economic performance has been very sound. All Islanders should
take credit for their part in this achievement. We in Government are only one
part of the picture. It is Islanders, working and investing, upgrading their
education and skills, and managing their businesses, farms and enterprises that
make all this happen. Islanders also form the backbone of our important public
service sectors, such as public servants, teachers and health care workers, and
all contribute to the economy. Government can facilitate and encourage
economic growth, but it cannot create it.
The Prince Edward Island economy performed well in 1999, exceeding our
expectations in most areas. The latest information points to an expansion in
our economy of at least 3 per cent. Inflation remained low in 1999 at 1.2 per
cent, though rising energy costs in recent months have placed upward pressure
on prices.
The growth in the economy was reflected in numerous economic indicators and I
will not attempt to detail them all, but in many areas the results have been
outstanding. For example, the value of international exports from Prince
Edward Island in 1999 was up from 1998 by 21.1 per cent. The value of exports
of processed fish products climbed by 54.9 per cent. Residential housing
starts were up by 17.6 per cent. Retail sales increased by 10.1 per cent.
Mr. Speaker, the increase in retailing on Prince Edward Island was the largest
increase of any province in Canada. Our analysis of the data reinforces our
belief that well placed tax reductions are a positive stimulus to the economy.
The strong economic picture was reflected in significant employment gains. The
latest Statistics Canada figures show employment reaching 64,800. Mr Speaker,
this is by far the highest level of employment in the Island's history. The
February 2000 unemployment rate was down to 11.5 per cent. This is the lowest
since December 1988.
Mr Speaker, the economic evidence shows that the engine that drives Prince
Edward Island's economy is running smoothly.
The manufacturing sector is also doing very well. The value of manufacturing
shipments from our shores reached close to $1 billion, expanded by 11.6 per
cent over 1998.
Tourism performed well, maintaining the expansion in numbers that occurred in
1997 and 1998. Expenditures by tourists valued some $303 million last year, an
increase of close to 5 per cent from 1998. Since 1996, tourism expenditures in
this Province have grown by 77 per cent.
The fishing sector had another good year with the value of lobster landings
growing to $88.8 million.
Our farming sector struggled because of the early dry weather and low commodity
prices. Although some world prices improved from previous years, they remained
low, resulting in tight margins. Overall, farm cash receipts expanded by some
10.5 per cent in 1999 over 1998.
There should be no doubt that the economic environment is critical to the
Government's fiscal success. In turn, there can be no doubt that the
management of the Government and its fiscal actions are working to foster the
economic environment. I believe that the Government has set the appropriate
direction to serve this end. That is not to say that our job is done.
Overspending, heavy borrowing and over-regulation are not paths to economic
success. Continuing prosperity hinges on Governments finding an appropriate
balance between public services and taxation that fosters investment and
employment. The nature of the new economic world in which we live in 2000 means
that this balancing act is becoming increasingly complex.
Global Impacts
Mr Speaker, the direction the global economy is taking is obviously critical to
our own economic forecasts. The global picture is dominated by the sustained
expansion of the U.S. economy. The U.S. is experiencing one of the longest
periods of economic expansion in its history, increasing by 3.5 per cent per
year since 1992. Similarly, the Canadian GDP increased by 4.2 per cent in
1999.
We might pause at this time to reflect on these numbers because hindsight is
20/20. Toward the end of 1998 there were grave doubts about the prospect of
further economic expansion in 1999 in view of the sudden collapse of the East
Asian economies, together with financial problems in Russia and South America.
The Japanese economy also looked very weak. The Canadian Federal Budget for
1999 was predicated on national economic growth of only 2.0 per cent. It is
now evident that these doubts concerning the strength of the North American
economies in 1999 were incorrect.
The U.S. Federal Reserve has raised interest rates three times in 1999 and
again in February 2000, in order to cool down the economy. In the meantime,
the US and Canadian stock markets reached record levels, which is indicative of
the levels of optimism in the North American economies. The Canadian dollar
had been somewhat stronger in 1999 than in 1998.
Growth Will Continue
It is likely that the current expansion will continue but at a somewhat more
reduced pace than was experienced in 1999. Inflation has been affected by oil
prices, but with the consumer price index increasing at an underlying rate of
1.4 per cent it is still well within the target range set by the Bank of
Canada. Interest rates are still very low by historical standards. We believe
the present economic environment will continue to stimulate economic growth in
Prince Edward Island in 2000.
A full account of the Island economy can be found in
Budget Paper A included in
this document.
Island Revenues Improve
Mr. Speaker, strong economic growth translates into strong revenue performance,
and in particular the Provinces's own source revenues have done well in 1999.
The two major tax revenues are the Provincial Sales Tax and Personal Income
Tax, together contributing to about 34 per cent of all provincial revenues. In
both cases tax revenues in 1999/2000 are up from Budget. Overall, Provincial
source revenues in 1999/2000 are above Budget by $45.5 million.
The strong economic performance nationally has also assisted in the growth of
Equalization. The latest Equalization estimate is anticipated to be $244.4
million in the current fiscal year. I might note that the 1998/99
Equalization payments were $268.5 million, of which $46.9 million was the
result of major prior year adjustments which cannot be anticipated in the
future.
Multi-Year Surpluses
For fiscal year 1999/ 2000 revenues totalled $893 million, while expenditures
were $889 million. Therefore, I am very pleased to announce that the forecast
for the 1999/2000 year will be a surplus of $4 million. This is the first time
in 25 years that the Government of Prince Edward Island has achieved actual
back-to-back surpluses. And, Mr. Speaker, today I am tabling another surplus
Budget for 2000-2001.
What do surpluses mean? Basically, they are an indication of the ability of the
Government to live within its means. They also mean that the Provincial Debt is
being reduced. This means that future Governments have increased flexibility
to reduce taxes or respond to expenditure needs. The achievement of surpluses
also sends a signal to the financial community that Prince Edward Island is a
good place to invest, and more particularly it should over time raise our
credit rating.
Cooperation
Mr. Speaker, the need for the Province to be more self reliant is growing.
Canada is changing rapidly, and it is evident that Canadian attitudes towards
the smaller, less well off provinces are changing. We cannot take for granted
that all Canadians will necessarily sympathize with the plight of the Atlantic
Provinces in times of economic difficulty.
In order for Prince Edward Island to have a substantial voice on national
issues we must forge new alliances with other provinces. It is therefore only
natural for us to join with our neighbours in the Atlantic Provinces on issues
in which we share a common interest. But, Mr Speaker, Finance Ministers of the
Atlantic Provinces have rarely worked together in the past. Fortunately that
is now changing and I was most pleased to host a meeting of the Atlantic
Provinces' Finance Ministers in January here in Charlottetown that set out a
process for us to work more closely together in the future.
Mr. Speaker, it is evident that all Provinces are troubled by the Federal
Government's lack of commitment to adequately provide for its share of the
funding necessary for health, social services and post-secondary education.
The Province has therefore joined with other provinces in calling for full
restoration of the federal reductions to the Canada Health and Social Transfer
(CHST).
The Federal Government must provide adequate and sustained financial support to
provinces to deal with the growing demands for health services.
The federal response to our calls to improve CHST and Equalization is of grave
concern to myself and my colleagues in other provinces. The Federal Government
has shown a consistent disregard for the concerns of Provinces in their
struggle to provide health care to Canadians and a particular disinterest in
the concerns of smaller Provinces in their struggle to provide provincial
public services at reasonable tax rates. I will continue to forcefully bring
our concerns to the Federal Government and to our fellow Canadians.
Details on the CHST and Equalization transfers can be found in
Budget Paper B.
The Year Ahead
Mr. Speaker, I would like to turn to the expenditure side of the Budget.
In 1996, this Government set clear priorities, and in making spending
allocations since that time, we have been guided by those priorities. We have
been able to enhance many existing services, provide new ones, and address
important needs. This Budget builds on those successes.
We believe Government should be prepared to work with all Islanders in building
a better future for our citizens and ensuring a solid financial future for our
province.
Health Care
Mr. Speaker, today we spend approximately $857,000 a day in the provision of
health and social services to Islanders. Over the last three and one-half
years, our support for health care has increased 11.6 per cent. As a
Government, we have worked hard to maintain the principles of Medicare and to
enhance the level of services provided to Islanders.
We have implemented important new support programs for those with Multiple
Sclerosis. We constructed the Island's first Cancer Treatment Centre, and we
will soon break ground for a major new hospital in Prince County.
We built a new provincial Addictions Centre, and invested $3.6 million in
enhanced regional addiction services, offering new programs for youth, women
and those addicted to gambling.
We maintained existing hospitals, increased support for nursing and community
care facilities, and increased staff.
Last year we established the Health Care Stabilization Fund. That fund
supported the creation of 85 new full and part-time nursing positions. Because
of that fund, 81 casual nurses now have permanent employment and are retained
in the Province. This year further funding of $3.3 million will support that
initiative.
In February the Government announced a $4.2 million Enhanced Physician
Recruitment Strategy, to recruit new doctors, support existing physicians and
strengthen Prince Edward Island's position in the recruitment market place. In
the same month, the Government announced the creation of four new physician
positions at a cost of $800,000 annually. From 1997, this Government has added
12 new positions in the physician complement. During that same time, seven
physicians have been successfully replaced, plus four long- term vacancies have
been successfully filled.
The Health Research Fund, established in last year's budget, has resulted in
partnerships with the Medical Research Council, University of Prince Edward
Island, Canadian Health Research Fund, Canadian Cancer Society, Heart and
Stroke Fund, the Lung Association and the Canadian Diabetes Association. Our
support for these partnership initiatives is in excess of $300,000 and will
leverage other dollars necessary for the completion of very valuable research
which will benefit the health of Islanders.
Mr. Speaker, many health care services are provided in partnership with others.
I am pleased to announce that the Provincial Government subsidy rate for
nursing homes will be increased by $445,000 this year, and a further $445,000
next year.
Nursing Home Residents Comfort Allowance will also be increased by $100,000 -
the first increase since 1992.
Community Care facilities will see program funding increased by $465,000 to
support higher per diem rates. This provides for a 29 per cent increase in
the per diem rate.
Mr. Speaker, the Bud
get includes $250,000 to provide increased support to a
number of community based, volunteer organizations that are partnering with
Government in the provision of health services and education.
Funding of $250,000 has been allocated to support a new Provincial Children's
Mental Health Team to address the increasing demands for mental health
services.
There will also be more funding this year in support of services for speech
therapy and autism.
As I stated, Government has an obligation to assist those in need. In
December, we announced a doubling of the school allowance and a 10 per cent
increase in the food allowance for those on social assistance. We also
indicated at that time a review of other supports was ongoing.
Today, I am announcing a further $1 million in funding to support social
assistance clients.
New technology is enhancing our ability to provide quality health care services
and I am pleased to announce this budget funds three specific, multi-million
dollar equipment initiatives that will further improve health care services.
Our Government will purchase an MRI. This means that the 500-600 Islanders who
are now referred off-Island each year for an MRI will be able to get it here.
More importantly, it will assist in the detection and treatment of a variety of
health problems.
The new Cancer Treatment Centre, built by this Government, is providing quality
care to hundreds of Islanders. To further enhance the ability of the Centre to
respond to treatment needs, a Linear Accelerator will be purchased. This means
that 300 more Islanders will receive treatment here at home.
As I indicated, the new East Prince Health Facility will proceed and the
community foundation will undertake a major equipment fundraising drive for the
new facility. To assist in that effort, our Government will commit $2.5
million to the equipment fund.
Education
Mr. Speaker, as an educator, a parent, and an elected representative, I know
the importance of a good education as the basis for development of our
children.
Today, I am pleased to announce several new initiatives aimed at supporting
education services in our Province.
Today I am announcing another historic first. Our Government believes that
education should begin with the very young. Therefore, a province-wide,
publicly-funded kindergarten program will be implemented this year. This
program will be community based, and will work in partnership with those now
providing kindergarten services. Our objective is to provide our youngest
students with a positive head start, and ensure a standard level of program,
while at the same time supporting those who have been providing such services.
Funding of $1.5 million has been allocated in this Budget, with an objective of
having the program operational by the Fall of 2000.
Mr. Speaker, we must also continue to upgrade those services we now provide.
The new Athena School is fully operational and the new West Royalty School will
open soon. The Capital Construction Program has so far supported the upgrading
of 48 schools. Construction will begin on the new Fort Augustus School in the
near future. Over the past three years, $25.8 million has been invested to
improve our schools.
Education is about more than buildings. That is why today I am announcing that
funding for elementary and secondary education will be increased by over $3
million. We have met with the School Boards and the Teachers' Federation and
are taking the first steps to address many of their suggestions.
This funding will be invested in 11 priority areas, including administrative
grants, teacher assistants and support workers, Internet technology, the Senior
High Transitions Program, and in-service training for teachers. These funds
will also support special-needs students, introduce a new math curriculum,
French Language Schooling, and funds to keep our schools safe.
Mr. Speaker, our Government supports the vital post-secondary education
facilities at Holland College and the University of Prince Edward Island. When
we were elected we promised a three year funding commitment to the post-
secondary institutions to assist them in planning for the future.
UPEI will receive an additional $1.2 million in operating funds. Holland
College will receive $1.4 million to cover its operating deficit and a $1
million increase in its operating fund. These additional investments, along
with our commitments to funding increases in the next two years to education
and training, will benefit students by controlling the increasing costs of
tuition.
In addition, the Minister of Education has already announced a new award
program of $600 per student for those entering the third and fourth years at
UPEI and second year of a two-year program at Holland College.
The Student Debt Reduction Program has also been enhanced to one of the very
best in the country. We have provided $1.3 million to assist students through
the Student Debt Reduction Program.
Communities
Mr. Speaker, I am conscious of the continuing need for improved physical
infrastructure to support economic development throughout the Province. In
support of needed infrastructure, this Budget allocates $2.5 million for a new
infrastructure program in partnership with the federal and municipal
governments.
A solid infrastructure is vital for the delivery of goods and services. That is
why last year, the Government took steps to improve our infrastructure by
investing in many large capital projects, including $1.2 million for the
construction of the Vernon River Bridge and completion of the last stretch of
the $5 million Charlottetown Perimeter Highway.
Roads and road safety are priorities for this Government. In 1999, the
Government completed numerous highway capital projects. Over 135 kilometres of
roads were re-constructed and many improvements to roads and bridges were made.
These highway initiatives were complemented by environmental management
projects that added to our sustainable environment. Numerous rehabilitations
were completed, including MacInnis Pond, the Ross Dam and Mill River Estuary.
Supporting all of these activities was the development of an Environmental
Protection Plan that defines protection measures for roadway and bridge
construction and maintenance.
We all cherish our Island way of life and the safety and security of our
communities. In response to community needs and new demands for services from
increased tourism, we will invest $350,000 to enhance policing and security.
Three years of careful planning will culminate this May in the official launch
of the province-wide 911 system which will provide Islanders and visitors
access to emergency services through the internationally recognized 911 system.
Mr. Speaker, our volunteer firefighters are a tremendous community resource.
They are individuals who spend many hours training and stand ready to respond
to emergency situations. Not only are they volunteers, they often travel to
emergencies in their own vehicles.
Our Government appreciates that effort, and I am pleased to announce that
effective immediately the Province's 1,200 volunteer firefighters will receive
motor vehicle registration for their primary vehicle free of charge.
Monsieur le Président, notre gouvernement reconnaît la contribution importante
des communautés acadienne et francophone à la société de l'Île-du-Prince-
Édouard. Par conséquent, nous sommes heureux d'établir un programme global
visant à améliorer les services en français offerts par notre gouvernement.
In 2000/2001 the Government will begin implementing the French Language
Services Act, a process that was proclaimed earlier this month and will
continue during the next five years. When fully proclaimed, the Acadian and
Francophone community as well as visitors to the Island will be the
beneficiaries of increased services in French. Proclamation will occur
gradually over the next number of years respecting the capacity of Government
as well as the desire of Acadian and Francophone community. Existing bilingual
services will be maximized and increased bilingual resources will allow the
Province to take full advantage of economic development opportunities.
Good employment prospects strengthen communities and over the past year the
Community Development Bureau and the employment of Community Development
Officers have actively fostered new opportunities across the Province.
Agriculture
Mr. Speaker, the Food Strategy is the cornerstone of our Government's
development efforts in the primary industries.
Prince Edward Island is a major food producer, and we have the opportunity to
introduce more products to the world marketplace. The Food Technology Centre
will invest $2.7 million in 20 projects in support of economic growth and jobs
in agriculture, seafood and food-related businesses.
In agriculture we will establish a new Sustainable Agriculture Industry
Development Program that will encourage organic and low-input production and
will see the implementation of a Pesticide Reduction Strategy.
This Budget includes provision for a new $1 million Seed Potato Crop Insurance
Program to help seed growers reduce the financial risk of growing high quality
seed under current conditions and increase the availability of high quality
seed for future years.
The Department of Agriculture and Forestry is working closely with all sectors
of the potato industry, including processors, and with the Federal Government
through the Industry Seed Strategy Committee to address the current issues
concerning the seed potato sector. Prince Edward Island is the only province
in Canada to introduce a mandatory Post-Harvest Virus Test Program, and the
only province with a cap on virus levels for seed.
The continued growth and development of Prince Edward Island's livestock
industry is a priority for this Government. Along with other Maritime
provincial governments, packers, the beef industry and Co-op Atlantic, the
Department of Agriculture and Forestry has provided support for the
introduction of a new Maritime Beef Brand to increase market access and returns
to producers. Although the hog industry has gone through a difficult period of
low prices, there is a great deal of confidence in its future.
Funding of $1 million has been budgeted for continuation of the Agricultural
and Environmental Resources Conservation Program which provides technical and
financial assistance for on-farm projects which include soil conservation,
manure management, hedgerow establishment and structures to store fuel and
pesticides.
Continuing with our commitment to sustainable forestry practices, I am pleased
to announce that seedling production at the J. Frank Gaudet Tree Nursery will
increase to three million seedlings this year.
Fisheries
Mr. Speaker, the lobster industry is by far the most important component of the
Prince Edward Island fishery, and is a significant contributor to the
provincial economy, especially in coastal and rural areas.
To support this vital sector, the Government will introduce a Lobster Strategy
in year 2000 to focus upon maintaining and developing the lobster industry as a
key element of our rural economy. The strategy will build upon the lobster
research initiatives undertaken by the Department, with emphasis on building
partnerships with the fishing industry, the Federal Government and research
institutions. The lobster strategy will also focus on quality programs,
product development and marketing.
The Department of Fisheries and Tourism has worked with representatives of the
Prince Edward Island Shellfish Industry and the Federal Government to
revitalize the Aquaculture Leasing Program. To strengthen the aquaculture
industry, Government will work with representatives of the Prince Edward Island
Shellfish Industry and the Federal Government to improve funding for the
Aquaculture Leasing Program. The new program will seek out industry input and
guidance and will address the backlog in leasing applications.
Job Creation and Development
The global market offers new opportunities to Island community-based
businesses.
Small business continues to be the engine of our economy and therefore, a
primary focus of Prince Edward Island business development. The Province will
continue to work with small businesses to help them in reaching their customers
by using technology; to enter into new export markets; and to expand their
business with appropriate infrastructure.
Job creation remains one of the key objectives of all business development
initiatives undertaken. Recently, the Province assisted call centres to expand
on Prince Edward Island which will create close to 350 new jobs for Islanders
in this industry alone.
Aerospace is growing significantly, based on expanding international markets.
Information technology has seen growth across the Province, taking advantage of
the Province's broadband network and advanced technological infrastructure.
Diversified manufacturing and life sciences are two sectors that continue to
expand on Prince Edward Island and are recognized as areas of potential growth
for our Province.
Mr. Speaker, acceptance and use of the Internet has been rapid and E-Commerce
is taking off at an explosive pace. Prince Edward Island has been very
successful in putting infrastructure in place to support efforts in the
knowledge based economy. During the past year, the Province entered into a
partnership arrangement with a consortium which included two Island companies
and GE Capital, which is an internationally respected company, to foster an
economic development initiative for the management of information technology
networks. This initiative is expected to produce 73 jobs and provide more than
$5 million in industrial benefits.
To strengthen Island communities, the Government will invest $140,000 to
establish Community Access Program training facilities in communities across
Prince Edward Island. Through the federally funded Electronic Post Office -
Canada Post Project, our Government will work in partnership with the Federal
Government to establish Canada Post's new electronic post office boxes across
the Island, for Prince Edward Island residents.
2000/2001 marks the second year of the Business Web Presence Program which
assists Island companies to initially develop a web site using Island-based
expertise. The Province and Industry Canada will invest $100,000 in 2000/2001
under this Program on a cost-shared basis. Through an investment of $120,000
in year two of the E-Commerce for Export Program, the Province and Industry
Canada will cost share supports for Island businesses to develop their
electronic commerce capabilities, thereby stimulating new export opportunities.
The Government will support partners in their use of video conferencing to
enhance teaching and learning. To assist educators of special needs students,
we will offer support for the Western School Board's application to the Office
of Learning Technologies to create Prince Edward Island's first ever on-line
course for special education teachers. And to further help students, we will
invest $95,000 to support the offering of a co-op initiative in the Bachelor
of Computer Science degree program. This co-op initiative will provide
students with "hands-on" experiences with the local businesses.
Cultivating our growing environmental industry sector is a priority for this
Government. Through the Environmental Industries Initiative, $200,000 will be
invested to create new support services to provide technical evaluation and
assessment services to participants in environmental-related industries. To
better protect the environment, the Fish and Wildlife Division will be
strengthened by an investment of $125,000 to add additional Wildlife Technician
positions on a permanent, full-time basis.
The Province continues to support the Island's primary industries and small
businesses by providing lending services through the Prince Edward Island
Lending Agency. In 1999-2000, there was in excess of 150 new loans provided to
the primary and small business industries. In addition, loan assistance to
major developments in Slemon Park, Souris, and West Royalty have provided
tremendous employment opportunities for Islanders in the aerospace and
manufacturing sectors.
In the present economic climate, we believe there will be more opportunities in
which the Lending Agency can and will play a key role toward the support of
economic growth on Prince Edward Island.
The Province assisted more than 80 small businesses, totalling more than $1.5
million, by way of the Entrepreneurial Loan Program and has assisted with
various major developments in Souris, Brudenell, West Royalty and Slemon Park.
Tourism
Following the successful Skins Game in 1998, the Province is proud to play host
in August 2000 to Canada's first ever women's skins game, The Lori Kane Island
Challenge. Attracting world class competitors and media coverage, this
prestigious sporting event will provide opportunities for the people of Prince
Edward Island to showcase our world class golf product and hospitality.
Mr. Speaker, golfing products and services on the Island will continue to
diversify and prosper. Crowbush Cove Development Inc. will conduct a $14.5
million development project consisting of a four-star resort in 2001,
featuring 118 rooms and the most modern accommodation facilities, adjoining the
Crowbush golf course.
Plans are in place to complete the Confederation Trail, from tip to tip, by
August of this year. Prince Edward Island will hold the distinction of being
the first province in Canada to have a fully completed, multi-use recreational
trail which will benefit rural tourism and serve as a magnet to attract the
growing outdoor, soft-adventure tourism market.
Under the Island Welcome Centre Program, private and community operated Visitor
Information Centres will increase their levels of service to the travelling
public. In cooperation with the Tourism Industry Association of PEI and
Tourism PEI, the centres will be identified by a common visitor information
symbol, will adhere to new quality service standards and will distribute
quality information to visitors to Prince Edward Island.
Developing our tourism services includes upgrading our tourism facilities. Due
to its age and location, the Visitor Information Centre at Portage in West
Prince is in need of vital repairs. To support our tourism industry in this
region, and to create a welcoming environment, the Visitor Information Centre
at Portage will be rebuilt to better serve the public.
Tax Relief and Tax Fairness
Mr. Speaker, I now turn to tax initiatives. In 1999, I was pleased to put
into effect the Province's first ever reduction to our Personal Income Tax
rate. Today I am taking tax reduction even further. I am pleased to announce
a significant program of income tax measures for 2000 and beyond that will
deliver broad-based reductions for all taxpayers and targeted reductions for
thousands of low income Island families. As I said at the beginning of this
address, the financial success of the Province is the result of the economic
progress that Islanders have achieved through their own efforts. It is only
right that Islanders share in this success.
I am pleased to announce three income tax measures. First, the Provincial
Personal Income Tax rate will be reduced again, to 57.5 per cent. Second, the
Government will pass through in full the additional provincial tax savings to
Prince Edward Islanders that stem from federal income tax reductions in their
2000 Budget. And third, a Low Income Tax Reduction Program will be introduced
that will significantly reduce tax paid by low income families and individuals.
The one percentage point drop in the Provincial Personal Income Tax rate, from
58.5 per cent to 57.5 per cent will be fully effective from January 1, 2000.
Each of Prince Edward Island's 66,300 tax payers will benefit from this
measure. This measure is worth some $2.2 million annually.
The reductions in the provincial personal income tax that are the result of the
latest federal Budget measures will flow through in full to all Island tax
payers both in 2000 and 2001. The reduction in Personal Income Tax from this
commitment is $5 million in 2000 and $7 million annually thereafter.
The Prince Edward Island Low Income Tax Reduction Program will also go into
effect January 1, 2000. It will provide tax savings for low income families in
a way that recognizes the extra costs faced by families with children. As a
result of this program, approximately 17,200 tax filers will see their taxes
reduced. The program will eliminate provincial income tax entirely for some
4,860 Islanders, who represent 7 per cent of all Island tax payers. The
annual reduction in personal tax revenue from this measure is estimated to be
$3 million.
The Low Income Tax Reduction Program will be administered through our tax
agreements with the Federal Government as a non-refundable credit against tax
payable. It will provide a $250 credit for the tax filer, $250 for the spouse
or equivalent-to-spouse and $200 per child. The credit will be available in
full to all Island families with taxable income up to $15,000, reducing by 5
per cent on income over that amount. Examples of these reductions are shown in
the
Budget Paper C.
It is particularly satisfying for me to be able to introduce this important
equity measure in light of my joint responsibilities as Provincial Treasurer
and Minister Responsible for the Status of Women. The social well-being of low
income families is closely tied to their economic well-being and this program
recognizes the need for income tax relief for working families with limited
income, many of whom are headed by women. The Low Income Tax Reduction will
provide relief to 42.7 per cent of all single parent families, totally
eliminating tax payable for 11.2 per cent of such families.
This program is additional to measures previously announced to raise Social
Assistance allowances to families.
Details on the Personal Income Tax measures can be found in
Budget Paper C.
I am also announcing the Government's intention to join with other provinces in
moving to the Tax on Income system in the calendar year 2001. Under this system
the Federal Government will continue to administer the provincial income tax,
allowing provinces to set their own tax rates and income schedules. It will
allow our Province the flexibility of continuing with a tax policy that raises
the standards of living for Islanders while at the same time addressing our
social needs.
In its move to a Tax on Income system, Prince Edward Island will adopt the
federal income thresholds and rates that will be effective on January 1, 2001
and so ensure that the tax reductions for 2001 described in the Federal Budget
are passed on in full to Island tax payers.
Islanders have accomplished broad-based economic successes in diverse areas
including exports, construction, investment, retailing, tourism as well as our
primary industries. This hard work of individuals has improved the revenue
position of Government and I am pleased to be able to participate in further
successes by putting money back in the hands of Islanders by way of significant
tax cuts. The combined effect of the federal and provincial income tax cuts
over the past two years adds up to a very sizeable annual saving of $41 million
to Island taxpayers.
To provide tax relief to owners of farm land that is leased to bonafide
farmers, or part-time farmers, our Government will introduce tax legislation to
create a reduced, fixed tax for that farmland. The measure addresses current
disparities in existing legislation that requires the full assessment be
applied to non-farmers who rent out their lands for farming purposes.
The issues surrounding our tax burdens are significant. We must continue to
create a favourable taxation environment and remain competitive. A strong,
healthy competitive economy is essential to our future health and standard of
living. These tax measures, in time, will boost overall economic activity
thereby resulting in other enhanced tax revenues.
Conclusion
I believe that this, the first Budget of the new Millennium, responds to the
economic and social needs of the Province. It is based on the firm belief that
fiscal responsibility is paramount to the future of the Province. It
recognizes the need to deliver tax relief to Islanders, both from a sense of
social responsibility as well as economic well being. The Budget continues to
provide for the expansion of vital social services, particularly in the area of
Health and Education. The Budget encourages future economic development by
supporting high tech industries, primary producers and tourism, by fostering a
competitive environment, and by ensuring that the infrastructure is adequate to
serve Island industry.
Last year we stated that we would help to create the best Province in Canada in
which to live. Mr Speaker, I am sure you would agree that at the start of the
new Millennium, we in Prince Edward Island can be proud to claim that we not
only live in the best country in the world, Canada, but also in the best
Province in that country.
In closing, Mr Speaker, I want to thank my colleagues for their assistance and
support in producing this Budget. I also want to thank the dedicated
Government workers in the Provincial Government for their commitment to our
goals. Finally, I would like to extend my sincere gratitude to all Islanders
who have contributed to the revitalization of this great Province.