Budget Address

HONOURABLE ANDREW THOMSON
MINISTER OF FINANCE
March 22, 2007

CHECK AGAINST DELIVERY

Mr. Speaker, it is a pleasure to rise in the Assembly today to present a fiscal plan that will make life better for Saskatchewan families.

In the past year, since I stood in this assembly to present the 2006-2007 budget, something significant has changed in our province. 

Today, in part because of the measures our NDP government has introduced in the past year, there is a growing sense of confidence and pride about our province.

Our economy is strong and in a period of sustained growth. 
Our families are enjoying the benefits of living in a have province that continues to provide the lowest cost-utilities in the nation through our Crown corporations. 

Our communities remain strong, and our infrastructure continues to support the growth of new industries and new jobs.  A record number of people have jobs and are working in Saskatchewan today.

And our province is increasingly recognized across this country as the best place in Canada to live, work, and raise a family. 

This is a great time to live in the great province of Saskatchewan.

The plan I present today is a plan that will make life better for Saskatchewan families.  It is built upon the confidence we are seeing in our communities today.  It is built upon the everyday values of Saskatchewan people and it will build on the strength of the growing economy.

Mr. Speaker, today, I am pleased to table today our 14th consecutive balanced budget.  

Today’s budget:
• Is our largest ever at $8.3 billion. It commits about $7.8  billion to programs for Saskatchewan people, a 1.4 per cent increase over last year’s forecast expenditures
• Includes a $75 million GRF surplus;
• Saves Saskatchewan people over half a billion in tax cuts through – the first full year of the PST reduction; the second year of business tax cuts; the indexation of personal income tax; and continued property tax relief.
• Funds our largest-ever capital program of nearly $535 million, a program that supports improvements to roads and highways, schools and other infrastructure.

This budget makes significant investments in new tax cuts for middle income families to protect their buying power. 

It will make significant new investments in our communities our shared infrastructure.

By making these investments we will help maintain the quality of life that Saskatchewan families value. 

It will make significant new investments in our Medicare programs to ensure that health care remains not only accessible but affordable.

It will make significant new investments in the young people of this country who seek a bright future, right here at home.

This budget will also do this in a way that is affordable and sustainable.

It is worth noting that, today, Saskatchewan has the second lowest debt to GDP ratio in the country at 16.1%.  This year we project that our debt to GDP ratio will drop again to 15.6%.  This is the lowest it has been in decades and is the result of making the right investments to stimulate growth, while at the same paying down the debt built up by previous administrations.

It is worth noting that in the past four (4) years we have paid off $820 million worth of debt.  We have seen our interest costs drop from 14 cents on the dollar to about 7 cents. 

We have seen our credit ratings increase and in the past year have added three additional upgrades, our 14th, 15th, and 16th consecutive upgrades under this NDP administration. 

As a result, today we have a credit rating equal to that of Ontario.

We have also worked to increase transparency to our finances through measures like the Fuel Tax Accountability Act, the creation of the Saskatchewan Infrastructure Fund and the cash funding of the Fiscal Stabilization Fund. 

As I indicated at the mid-year, we expect this year to draw down the Stabilization Fund, to protect social programs from the variation in tax revenue resulting from the unprecedented and sweeping tax cuts we made last year. 

Even so, this budget will maintain over $370 million in reserves to guard against revenue fluctuations that are dependant upon commodity prices.

The strength of Saskatchewan commodities are the secret to our continued wealth.   Saskatchewan, like the rest of Western Canada continues to experience strong economic growth as a result of increased demand for our non-renewable natural resources. 
Market analysts are continuing to expect positive trends for Saskatchewan's oil, gas, uranium, potash, precious metals, and agricultural sectors, both in terms of production and price. 

This provides a degree of confidence that our economic growth will continue.  In fact we are projecting that GDP will grow by 2.9% this year, this is half a point higher than the national average.

This growth and prosperity will mean that Saskatchewan will continue as a have province for years to come.

We welcome what that prosperity means for Saskatchewan people, although we remain disappointed that Ottawa will continue to claw back the resource wealth that belongs to the people of this province.

During the last election, Prime Minister Harper promised to allow Saskatchewan to retain the benefit of the non-renewable resource wealth to help encourage growth and diversification. 
On Monday, he broke that promise. 

As a result Saskatchewan will be denied the full benefit of its natural resource wealth.  However, we have been advised that we will receive a one-time payment of approximately $226 million through the equalization program in 2007-2008, if the federal budget passes.

Although Stephen Harper and the Conservative MPs broke their promise, we will keep ours and will commit 30% of the one-time equalization money to reducing property taxes.
This will allow us to extend the 8% property tax cut to cover the next two years. Furthermore, we will deepen the tax cut to 10% on the assumption that the federal budget will pass.

We have also decided that the remaining 70% of the money will go to debt reduction.
This will mean that since we were re-elected in 2003, we have paid down nearly $1 billion in debt on behalf of Saskatchewan people.

We believe that fiscal prudence is an important value of Saskatchewan people.
Although the broken promise by the Prime Minister will take away any additional ability to reduce taxes or increase services, we believe that the one-time money should be used to better Saskatchewan’s balance sheet.

Our balance sheet is strong, in part because of the growing economy our fiscal and economic policies have supported.

Since this Premier took office, we have undertaken a series of changes to strengthen our economy and encourage the creation of jobs and growth throughout our province.

We started with Personal Income Tax reform.

With the election of the new Premier in 2001 we undertook oil and gas royalty reforms to encourage production, we restructured potash royalties, we worked with the uranium companies to restructure their royalties, and we worked together to look for ways to increase jobs, investment and production in the key sectors.

These changes helped create the economy that is allowing us to be a have-province today.

Last year we build on these changes by making sweeping cuts to provincial business taxes to encourage investment, job creation, and economic growth.  

These changes included:
• eliminating the general corporate capital tax;
• reducing the general corporate income tax rate;
• reducing small business taxes; and
• improving the tax incentives for manufacturing and processing.

In October, we cut the Provincial Sales Tax from 7% to 5%, achieving the lowest sales tax rate in a generation. 

In the past year alone we have cut capital taxes, corporate taxes, small business taxes, property taxes, income taxes, and sales taxes. 

Since the current Premier took office, our NDP government cut over $650 million in taxes to help create jobs and opportunities for Saskatchewan people. 

Our tax cuts have been sustainable, affordable, and have helped make life better for Saskatchewan families. 

Today, taxes for an average family are $1200 a year lower than they were when this Premier took office.

In this budget we will protect those benefits to Saskatchewan families. 

Today, I am pleased to announce that we will legislate the indexation of income tax benefits to protect these benefits from being eroded by inflation.

I am also pleased to announce today that starting this tax year, we will permit income splitting for seniors. 

These two measures combined will provide nearly $40 million in annual tax cuts for Saskatchewan, in addition to the nearly $350 million we have undertaken since mid-year.

As promised, we continue to work toward reducing education property taxes for Saskatchewan residents through meaningful tax relief.    

This budget provides more than $107 million in education property tax relief through the continuation of the 8 per cent credit for residential and commercial property. This will be deepened to 10% this year on the assumption that the federal budget passes. It will also continue the approximately 38 per cent credit for agricultural land owners

Additionally, this budget provides over $100 million in support for Crop Insurance and an additional $118 million to fully fund CAIS. 

Mr. Speaker, this Budget recognizes the importance of the rural economy as an engine of growth for our province as a whole. 

We know that it is important to ensure a modern transportation network is available to move goods to market and allow people to access services in larger communities.  We know our highways and transportation system needs to be upgraded and improved. 

As such, this budget provides record support for highways and other infrastructure, because we recognize the need for a strong transportation network to support the continued economic growth of our province.

This past fall, I introduced the Fuel Tax Accountability Act to ensure that money raised from the gas tax was spent on transportation and highways infrastructure. 

That Act, the first of its kind in Saskatchewan ensures that over $300 million will be allocated to highways infrastructure this year. 

We believe this legislation will provide an important foundation for establishing a long-term plan for upgrading our highways and transportation networks. 

But, we also know that plans need money to become realities.  That is why we have committed to investing $5 billion over the next decade to support an innovative new highways and transportation strategy.

This year’s budget includes a record $438 million to help realign and rebuild Saskatchewan’s transportation network.  The funding will enable us to complete twinning of Highways Number 1 and Number 16 West and continue work on twinning Number 11. 

It will also support further work on the Northern Infrastructure Program, continued work on the First Nations Road Access Program, and the Prairie Grain Roads Program. 

As well we have committed an additional $10 million dollars this year to help RMs improve roads under their authority. 

This includes $5 million to help move forward SARM’s “Clearing the Path” initiative, and $5 million to help select RMs deal with heavy oil road maintenance and rebuilding.  This money will double to $20 million next year.

We recognize that our urban, rural and northern municipalities have an important role to play in fostering strong and safe communities that are welcoming to families and encouraging for business.

That is why I am pleased to announce today that we will provide a record $30 million increase in on-going, unconditional revenue sharing for municipalities, bringing the total to a record $127 million.

This is the largest, single year increase in the history of the revenue sharing program. It also exceeds our election commitment to provide $85 million in unconditional revenue sharing. 

I am also pleased to announce today that municipalities will receive $58 million for specific infrastructure support this year. 

In addition to the traditional support for municipal infrastructure, we understand that sports, culture and recreation play an important role in Saskatchewan when it comes to quality of life for Saskatchewan families. 

That is why we have established the Building Communities Fund to assist communities in undertaking new construction, and upgrading of facilities that provide benefits to the larger regions they serve and, indeed, the province as whole.

In the past year, we provided grants to the Swift Current Centennial Civic Centre, the Commonwealth Centre in Lloydminster, the Gallagher Centre in Yorkton and to communities in the North. 

This year, we are providing $40 million through Building Communities to support anticipated projects like the expansion of IPSCO Place in Regina that is home to the important provincial attractions and trade programs like the Royal Red, Western Canada Agribition, and the Farm Progress Show. 

We expect the communities of Moose Jaw, Saskatoon, and Prince Albert to provide additional submissions for projects in their regions in the coming year. 

Supporting communities in the province is an important part of our plan to make life better for Saskatchewan families.

Our communities thrive when not only facilities are in place, but programs that make life better for Saskatchewan families. 

We believe one of the best ways to ensure strong communities is to invest in young people. 

Accessible, affordable, good quality child care is a priority for our Government -- it helps families participate more fully in the labour force and plays a role in children’s early learning and development. 

I am pleased to announce that we will create 500 more licensed child care spaces this year, bringing the total to 9,300 spaces.

I am also pleased to announce that for the first time, we will also provide funding for ongoing capital construction costs for new spaces, and renovation costs for existing child care facilities.  

As children grow and gain new skills we have an important opportunity to invest in their futures and make sure they can get most out of the education our schools will provide.

Research shows that early intervention programs, such as pre-kindergarten and our innovative KidsFirst initiative, help children succeed in school and in life. 

That is why I am pleased to announce today that we will fund 15 new pre-kindergarten programs, targeted to community schools, bringing the total pre-k programs to 134. 

This increases the total number of pre-K spaces to over 2,000 in urban, rural and northern community schools. 

This Budget also deepens our commitment to build literacy skills so that all people can take full advantage of the opportunities a strong economy is providing. 

Today’s budget includes more than $3 million for adult and family literacy programs.  These funds will assist the newly established Saskatchewan Literacy Commission and a network of provincial training institutions and Community-Based Organizations to undertake literacy programs. 

Literacy, numeracy, and a strong sense of citizenship begin with ensuring young people have access to the highest quality education available. 

This Budget is making Saskatchewan an even better place for young people, starting with our provincial K-12 education system.

In 2007-08 we are providing over $600 million in operating and capital funding for our schools and pre-kindergarten system in 28 school divisions.

This funding provides a $646 increase to the basic per pupil rate, which represents an 11% increase over last year.

This significant investment funds education for over 163,000 students in more than 750 schools throughout the provincially funded school system. Provincial funding for education has increased by more than 50% in past decade.

Education is an important investment we make in ourselves and in the future of Saskatchewan.

We want to help young people to start their careers here in Saskatchewan, and to ensure we’re in a position to meet the need for skilled workers in the province. 

We are committed to making it easier for young people to remain in Saskatchewan to study for their careers. 

That is why this budget includes nearly $200 million for the training sector. 

This investment includes nearly $24 million to create over 2,100 new training opportunities, including opportunities in targeted fields such as healthcare and the skilled trades.

I am pleased to say this increase will bring us to a total of over 31,000 seats, which is a 24 per cent increase since the last election. 

Post-secondary education and training are vital parts of building a successful future.  We believe that education must not only be accessible, but affordable. 

That is why, in addition to providing more than $110 million in student support programs in the form of scholarships, bursaries, and loans for 14,000 students, it also includes close to $41 million in income support for about 9,800 students in basic skills training and employment programs.

This budget also provides $21.6 million to keep undergraduate university tuition rates frozen at 2004 levels, for the third year in a row.  This saves a student about $1500 this year in tuition costs. 
 
Since we implemented the fully-funded freeze, we have committed nearly $92 million to help keep education both accessible and affordable.

Mr. Speaker, education is an important part of building the skills it takes to participate fully in community life and to start a career. 

For young people, the opportunity of choosing a career is an exciting one.  For those of us who live in and love this province we know the benefits of building a future here at home.

We want to help make Saskatchewan an even more attractive place for young people to build their careers and start their families.

That is why I am pleased to announce that effective this year recent graduates will not pay provincial income tax on the first $20,000 of their income for five years following graduation. 

This will be accomplished by establishing a special $10,000 Graduate Tax Exemption and permitting any unused portion to be carried forward for up to five years, providing a 10-year window for graduates to apply the incentive.

This exemption applies to graduates of universities, technical schools, trade schools and other qualifying programs from across Canada

This exemption gives young people one more reason to build their future right here at home in Saskatchewan and gives businesses a valuable tool to help attract new employees from across Canada.

For those of us who grew up here and for those who have chosen to move here, we know Saskatchewan is the best place in Canada to live, work, and raise a family because we believe in working together, in sharing in the opportunities our province provides, and in making sure we put people first.

This has long been a value shared by Saskatchewan people.  It is in part why Saskatchewan was able to pioneer Medicare and why we made Medicare a priority long before there was federal support for the program.

This Budget provides a number of measures to increase access to healthcare for Saskatchewan families.

This year we will provide a record $3.45 billion to deliver health care services to Saskatchewan people.

This funding will provide comprehensive, universal, publicly accessible, publicly funded access for more than 5.6 million visits to doctors and specialists, nearly 73,000 surgeries, and almost 140,000 advanced diagnostic procedures.

Furthermore, it will allow us to employ the services of over 37,000 doctors, specialists, nurses, health care professionals and support workers.

Regional health authorities this year will receive $90 million more to enhance wages and benefits for unionized health care workers and over $22 million more for physicians and other health professionals.

This Budget provides $78.5 million for the Cancer Agency, and 17 per cent more for cancer drugs and medical supplies. 

This Budget is also doing more to improve children’s health.

We are providing a targeted dental sealant program for children in Grades 1 & 7 in our community schools. Dental sealant provides effective protection against tooth decay, encouraging better overall health. 

This program will help to ensure that children who might not typically have access to dental care benefit from this preventive measure.

This Budget also provides $2.25 million in new funding for improved access to children’s mental health services.

We are also implementing coverage for insulin pumps for children under age 18 who require this item to regulate insulin levels.

We are implementing respite benefits for parents of children with complex medical needs. 

We are providing $3M to develop an intensive autism treatment program for children moderately to severely affected by autism.

This funding will help to improve access to these services and significantly reduce waiting lists.

Access to quality health care often starts with a simple visit to the doctor’s office and sometimes progresses to the need for access to specialized diagnostic imaging to detect specific conditions. 

This year we expect to fund more than 117,000 CT scans and 24,000 MRI scans.  This Budget provides funding to extend shifts and the hours of operation to help reduce wait lists. 

Our $3.45 billion commitment to Medicare this year will also provide:
• An additional 3,117 MRIs, more than doubling the capacity since our election in 2003; and
• An additional 5,455 bone mineral density tests.

We will also provide $3 million to allow doctors in local communities greater access to the testing results of these scans by improving their access to electronic health records. 
This will help patients, particularly in rural Saskatchewan, get better quality and more convenient access to test results.

This healthcare budget also includes funding for:
• Access to up to 2000 more additional surgeries in 2007-08, helping to reduce wait lists;
• 160 more hip and knee surgeries for a total of 3,275 procedures;
• Increased renal capacity to accommodate 20 per cent more patients and we expect to establish our eighth satellite unit for renal dialysis in Estevan this year; 
• Supplementary eye and enhanced drug coverage for up to 30,000 low-income workers;
• A 12 per cent increase in the drug plan base budget; and
• Planning dollars for the maternal-child hospital in Saskatoon and

Health care is important to all of us, and often grows in importance as we grow older. 

Life expectancies are growing, and the health of our older citizens is improving, in part because of the role of pharmaceuticals and drug therapies in managing chronic conditions.

While these therapies can extend our life expectancy, they are also growing in cost and often put real pressures on Saskatchewan seniors.

That is why I am very pleased to announce today that we are introducing an enhanced Seniors’ Drug Plan. 

This plan will mean that no senior over 65 will pay more than $15 in prescription drug costs for all drugs under the formulary plan, effective this July.  That’s an average annual savings of $400 per senior.

This $36 million investment will benefit 115,000 seniors, and is the most significant expansion of health services for seniors in a generation.

In 2003 Saskatchewan people elected our NDP government to help ensure that Saskatchewan would remain the best place in Canada to live, work, and raise a family.

Today, Saskatchewan families are paying on average $1200 less in taxes than they were at the start of the decade. 

Today, there are a record number of people who have jobs as a result of the changes we have made to encourage a stronger economy.

Today, young people are saving $1500 a year on tuition as a result of the freeze we implemented. 

Today, businesses are able to grow and expand because of the tax reforms we have begun. 
 
Today, because of this budget, seniors will save on average $400 a year in prescription drug costs. 

Young people graduating from across Canada will be able to earn up to $20,000 tax free for each of five years after graduation just for starting their careers and families here in Saskatchewan. 

Families will get better access to health care because of the increases in support for surgeries, diagnostics, and drug therapies. 

Children will have increased access to quality childcare so their parents can participate in the growing economy, and parents throughout the province will be able to know the specialized health care services their children need can be provided for right here at home.

This budget continues to build a better future for young people, for seniors, and for families.  In so doing it makes life better for Saskatchewan families, and deserves the support of Saskatchewan people. 

As such, I am pleased to move, seconded by the member from Saskatoon Nutana, that the Assembly approves in general the budgetary policy of the Government.